TOKYO -- Tokyo stocks skidded Tuesday following the dip on Wall Street, but losses were narrowed by the Japanese central bank's announcement that it would consider new steps to stabilize the financial sector. The dollar weakened against the yen. The benchmark 225-issue Nikkei Stock Average was down 71.88 points, or 0.75 percent, at 9,472.06 points at the close of Wednesday trading. The Nikkei gained 302.01 points, or 3.27 percent, to close at 9,543.94 Tuesday.
The dollar was trading at 122.20 yen on the Tokyo foreign exchange market at 3 p.m. (2 a.m. EDT) Wednesday, down 0.71 yen from late Tuesday, and below its New York trading level late Tuesday of 122.36 yen. Traders said that stock selling in New York overnight led to profit-taking in Tokyo that sent the Nikkei down nearly 250 points, or 2.6 percent. But Bank of Japan Governor Masaru Hayami's announcement that he was considering steps to shore up the banking sector and help lenders get rid of bad loans sparked a late afternoon rebound that narrowed losses, traders said.
High tech blue chips Toshiba, Sony, and Sharp were among the decliners. Hayami said Japan's central bank is considering directly buying excess stocks held by shaky commercial banks. Japan's banks have been selling off their shareholdings to raise funds needed to write off massive non performing loans, which have constricted growth and weighed on stocks.
In New York, a drop in industrial production and a profit warning from McDonald's Tuesday took a jab at investors' already shaky confidence in the U.S. economy, prompting them to again sell off stocks. The Dow Jones industrial average closed down 172.63, or 2.1 percent, at 8,207.55. The broader Nasdaq composite index declined 15.94, or 1.3 percent, to 1,259.94.
The broader Tokyo Stock Price Index closed trading down by 4.63 points, or 0.50 percent, at 9927.29 Wednesday. The TOPIX was up 24.01 points, or 2.64 percent, at 932.42 Tuesday. The euro traded at 118.92 Wednesday mid-afternoon, up from 118.76 yen late Tuesday, in Tokyo. Against the dollar, the euro was quoted at 97.10 cents, up from 96.41. The yield on the benchmark 10-year government bond rose to 1.2550 percent Wednesday, from 1.0550 percent Tuesday. Its price fell 1.82 to 100.39. //www.nj.com