The dollar bought at 108.86 yen on the Tokyo foreign exchange market at 3 p.m. (1 a.m. EST) Monday, up 0.38 yen from last Tuesday and also above its New York level of 108.34 yen on Friday.

Financial markets in Tokyo were closed last Wednesday through Friday for national holidays.

The benchmark 225-issue Nikkei Stock Average fell 239.40 points, or 1.3 percent, to 18,199.96. On Tuesday, the average closed up 36.28 points, or 0.19 percent.

In currency dealings, the dollar strengthened against the yen amid signs U.S. interest rates are heading up, making the world's largest economy more attractive to investors overseas.

The U.S. Labor Department said Friday that the nation's jobless rate fell to a 30-year low of 3.9 percent in April.

That fanned speculation that the Federal Reserve will raise rates by as much as one-half percentage point on May 16 to contain a resurgence of inflationary pressure.

In other currencies, the euro was quoted at 98.36 yen, down from 98.82 yen late Tuesday in Tokyo.

On the stock market, technology companies led the retreat as the prospect of U.S. growth being reigned in made some investors nervous about valuations of shares in Japan's ``new economy.''

``Investors are focusing on profit-taking,'' said Hiroichi Nishi deputy general manager at Nikko Securities Co. ``A technical downswing was to be expected today after the Nikkei gained 500 points in the two trading days last week.''

The broader Tokyo Stock Price Index of all issues listed on the first section fell 6.06 points, or 0.35 percent, to 1,696.52. The TOPIX closed up 7.35 points, or 0.43 percent, on Tuesday.

Still, rising stocks outnumbered decliners by 760 to 501 issues, and 135 issued finished from last Tuesday's close.