Tokyo stocks up at break as hopes for tax-hike delay lift mood

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TOKYO: Tokyo stocks rose on Monday morning, extending three straight sessions of gains as a weaker yen and hopes the government would delay a consumption tax hike lifted sentiment.

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Japanese media said Prime Minister Shinzo Abe would delay a planned sales tax hike over concerns it could damage the already fragile economy.

Tokyo was scheduled to raise the sales tax from eight percent to 10 percent in April 2017.

But Abe on Saturday told his close aides, including Finance Minister Taro Aso, that he intends to push back the planned increase to October 2019, according to local press reports.

Abe is expected to announce the decision later this week, the reports said.

At the break, the Nikkei 225 index at the Tokyo Stock Exchange rose 0.89 percent, or 150.36 points, to 16,985.20, while the Topix index of all first-section shares gained 0.74 percent, or 9.98 points, to 1,359.91.

US equity markets ended higher on Friday following Federal Reserve boss Janet Yellen’s much-anticipated remarks at Harvard University.

At the event, Yellen implied that US interest rates could be lifted soon, saying that a rate hike “probably” would be justified “in the coming months” if economic data continued to strengthen.

“The stock market’s reaction is changing and coming around to the idea that the US economy is strong enough to withstand higher rates,” Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News.

“The expectations for an increase are leading to a stronger dollar and firmer stocks globally, and that’s a stabilizing factor for Japanese shares.”

On currency markets, the dollar rose to 110.98 yen from 110.37 yen Friday in New York.

The weaker yen boosted some exporter shares with Toyota rising 1.25 percent to 5,659 yen and Nissan jumping 3.33 percent 1,100 yen.

Banking giant Mitsubishi UFJ tacked on 0.37 percent to end the morning at 544.7 yen. AFP

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