Tokyo stocks jump by break after sales tax delay report

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TOKYO: Tokyo stocks rallied Monday morning, rebounding from last week’s sell-off following a report the government is considering postponing a planned sales tax rise.

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Prime Minister Shinzo Abe wants to delay the consumption tax hike for a second time, judging that increasing the tariff could hurt the already fragile economy, the Nikkei business daily reported at the weekend.

“It’s possible this news of a tax hike delay could entice foreigners to close their short positions,” Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News. “Company forecasts for this fiscal year are indicating we’re almost certain to see profit growth.”

The benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 1.04 percent, or 170.83 points, to 16,583.04 by the break, rebounding from a steep 1.4-percent loss in the previous session.

The broader Topix index of all first-section shares climbed 0.70 percent, or 9.18 points, to 1,329.37.

Investors are also awaiting the release of first-quarter economic growth data Wednesday.

A decline could push the world’s third-largest economy into technical recession following a contraction in the final quarter of last year.

The Nikkei newspaper said Saturday that Abe has already informed senior government officials he plans to delay the sales tax rise from eight percent to 10 percent, which is scheduled for April.

The last such rise, from five percent in April last year — the first increase in 17 years — was blamed for pushing Japan into recession.

In share trading cosmetics maker Shiseido surged 7.34 percent to 2,630.5 yen after raising its full-year profit forecast on Friday.

Toyota was 0.01 percent lower at 5,453 yen but rival Nissan edged up 0.24 percent to 1,031 yen.

Mobile giant SoftBank added 0.61 percent to 5,874 yen, while Uniqlo operator Fast Retailing, a market heavyweight, advanced 0.87 percent to 28,750 yen.

On currency markets, the dollar gained to 108.92 yen from 108.63 yen on Friday in New York. AFP

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