Tokyo stocks fall, dollar slips against yen

TOKYO (AP) -- The dollar slipped against the yen in Tokyo trading today amid uncertainty about prospects for Japan's economic recovery. Tokyo stocks fell slightly.

The dollar bought 106.87 yen in late trading on the Tokyo foreign exchange market, down 0.11 yen from Monday, when U.S. markets were closed for the Memorial Day holiday.

The benchmark 225-issue Nikkei Stock Average fell 16.54 points, or 0.10 percent, to close at 16,228.90 on the Tokyo Stock Exchange. On Monday, the average rose 237.30 points, or by 1.46 percent.

In currency dealings, traders said the market reacted little to the release of better-than-expected Japanese spending and unemployment data because more evidence is needed to confirm that consumer confidence is recovering.

The government said Tuesday that spending by Japanese wage earners in April jumped 3.6 percent in inflation-adjusted terms from a year earlier, far outstripping the consensus forecast for a 1.1 percent decline.

Also, Japan's unemployment rate for April fell to 4.8 percent from the record 4.9 percent in February and March. Experts predicted the rate would rise to 5.0 percent.

Still, dealers said that investors will wait for Japanese Gross Domestic Product data for the January to March quarter, due around June 12, for more hints about the direction of the economy. GDP is the sum of all goods and services produced in the nation.

Traders will also be watching for May U.S. unemployment data, due out on Friday, for an indication of the Federal Reserve Board's stance on interest rates. The central bank recently raised U.S. interest rates for a sixth time in less than a year in an attempt to cool down the booming economy and prevent inflation.

Higher interest rates generally boost the dollar by making returns on U.S. bonds and other assets more attractive.

The dollar stayed in a narrow range in Tokyo -- trading between 106.78 yen and 107.04 yen during the day -- as many investors were holding back after U.S. and London markets were closed Monday for national holidays.

In other currencies, the euro was traded at 100.26 yen, up from 99.24 yen late Monday in Tokyo.

On the stock market, traders began selling shares after the market rose to an intraday high of 16,485.54. The index's stall before the 16,500 level triggered a sell-off by jittery investors, who did not have New York markets to guide them on Monday.

Volume on the first section of the Tokyo Stock Exchange was estimated at 489.2 million shares, up from 413.1 million shares Monday.

In all, 833 issues fell, with 422 issues higher and 132 closing unchanged from Monday.