The strong advance in equity and bond prices seen in the first quarter of 1991 petered out in the second. Prices in several markets ended the quarter slightly lower than at end-March as concern over the underlying strength of economies re-emerged. Share prices in the United Kingdom and the United States temporarily reached record levels, encouraged partly by optimism over interest rates and the prospects for economic recovery, but in real terms they remained below pre-1987 crash peaks. The German equity market rose more quickly than in the relatively subdued first quarter, but the Japanese market was depressed by poor results from the financial and corporate sectors, and latterly by revelations about the trading practices of Japanese securities companies. Overall, there was little movement in short-term interest rates over the quarter, with continued easing in a number of economies (notably Japan and the United Kingdom) while the downward trend flattened out in the United States. Yields on government bonds rose modestly in most countries, reflecting revised expectations about future interest rates, and yield curves either steepened or became less inverted. In the foreign exchange markets, the dollar strengthened further after its strong appreciation in the first quarter, and was accompanied by a stronger yen.