Nikkei soars to 7-year highs on reports tax hike will be delayed

martes 11 de noviembre de 2014 22:02 GYT
 

* Sales tax rise to be delayed by 18 months - newspaper
    * Investors relieved at reduced risk to growth
    * Fujifilm jumps on Ebola drug approval expectations

    By Thomas Wilson
    TOKYO, Nov 12(Reuters) - Japanese stocks jumped on Wednesday
as investors cheered reports that Prime Minister Shinzo Abe will
delay a planned sales tax rise to rejuvenate Japan's fragile
economic recovery, and call a snap election to secure his
political position.
    Abe will postpone a planned second sales tax hike by
eighteen months and call a general election on the issue next
month, the Sankei newspaper reported. [ID: nL3N0T175G]
    The Nikkei benchmark gained 1.4 percent to 17,356.75
by 0157 GMT, hitting fresh seven-year highs.
    "That the market would fall on a sales tax rise was a big
fear. This is hugely positive," said Mitsushige Akino, chief
fund manager at Ichiyoshi Asset Management.  
    Given a fragmented opposition, a snap election could cement
Abe's grip on power, despite declining approval ratings. 
    With third quarter GDP figures due on Monday expected to
show the economy still struggling to shake off the pain of the
April sales tax rise, a delay in the second-stage tax hike was
seen as positive for Japan's stuttering recovery.  
     Economists have warned that given the parlous state of
Japan's public finances, fiscal consolidation through tax
increases is essential if the country is to maintain its
credibility in international debt markets. 
    For now, however, market players were focused on policy
steps to recharge Japan's economy.  
    "Markets are here and now. They're watching liquidity and
reform," said Gavin Parry, managing director of Parry
International Trading, referring to the Bank of Japan's radical
easing steps and Abe's planned structural reform policies.
    Japanese stocks were also encouraged by a solid Wall Street
performance, and the dollar's rise to a seven-year high of
116.11 yen overnight. [ID: nL2N0T11KS]
    The dollar was last at 115.84 at 0056 GMT
    The weak yen helped Japanese exporter shares, such as Toyota
Motor Corp, which jumped 1.6 percent and Panasonic, up
1.0 percent.
    Fujifilm Holdings shone, its shares jumping 4.7
percent after it said its Avigan anti-influenza drug will likely
be approved for treating Ebola patients early next year.
    The broader Topix gained 1.0 percent to 1,388.23,
while the JPX-Nikkei Index 400 added 1.0 percent to
12,680.66.

 (Reporting by Thomas Wilson; Editing by Shri Navaratnam)