FURTHER WEAKNESS SEEN IN TOKYO STOCKS IN NEAR TERM
Tokyo share prices are expected to weaken
further for about a week, following a sharp drop which at one
time today saw the Nikkei Dow index down 571.01 points in
mid-afternoon trading, brokers said.
    They said uncertainty caused by disputes between Japan and
its main trading partners will continue to deter investors from
equities.
    The market index, which closed the day 297.05 points down
at 22,919.54, will probably end the present downturn at around
22,300 points, brokers predicted.
    "This is just a short-term correction and the market will
probably end up at about 22,300 in about a week's time," said a
broker at Nomura Securities Co.
    He said that today's late recovery from afternoon lows
showed that investors were still hunting bargains in
anticipation of an upturn.
    Brokers reiterated expectations of an imminent cut in
Japan's 2.5 pct discount rate, a factor seen to be diverting
money from bank accounts into stocks and boosting the market.
    Securities company, bank and insurance issues, likely to
benefit from a rate cut, were bought in late trading.
    The Nomura broker said he expects the rate cut in May or
June, after Prime Minister Yasuhiro Nakasone's scheduled visit
to Washington on April 29. Nakasone is expected to seek an end
to Japanese-U.S. Trade disputes which are hurting investor
confidence.
    "Until we see some concerted effort by the Japanese to halt
the yen's rise against the dollar and settle trade disputes,
the market will stay low," said head of equities at Jardine
Fleming Securities Co, Mario Malt.
    Malt said current talks between the countries were
inflammatory and damaged stockmarket optimism.
    Brokers also said that Japan's ruling Liberal Democratic
Party has to show it still rules, after Sunday's nationwide
local elections showed dwindling support.
    "It raises doubts on whether the LDP can push through the
reforms it planned for this year," said one broker.
    Top policy priorities this year are deregulation of
financial activities, stimulation of domestic demand to boost
imports and removal of agricultural subsidies.
    If these policies are abandoned or scaled down, stockmarket
investors will have few reasons to buy stocks, brokers said.
 REUTER
