Nikkei rises on tax relief, hopes for economic rebound

martes 18 de noviembre de 2014 22:10 GYT
 

* Japanese stocks gain on sales tax delay, snap election
confirmation
    * Topix hits eight year high
    * Exporter shares up on weak yen

    By Thomas Wilson
    TOKYO, Nov 19(Reuters) - Japanese stocks edged higher on
Wednesday as investors breathed a sigh of relief at Prime
Minister Shinzo Abe's decision to delay a planned sales tax
rise, and held out hopes for a rebound in the economy after it
unexpectedly slipped into recession. 
    The Japanese premier confirmed late on Tuesday a
widely-expected postponement to April 2017 of the planned tax
hike, and said that he would dissolve the lower house on Friday.
 The vote is expected on Dec. 14. [ID: nL3N0T84L7]
    The Nikkei benchmark tacked on 0.3 percent to
17,390.24 by 0129 GMT. The broader Topix added 0.4
percent, reaching an eight-year peak of 1,406.15.  
    Analysts said the tax decision and an expected victory for
Abe's Liberal Democratic Party and its smaller coalition ally
would likely provide a fresh catalyst for Japanese shares, which
have surged since Oct. 31 when the Bank of Japan stunned markets
with more stimulus steps.   
    "We've seen a double bazooka so far, and now the sales tax
postponement will have a huge impact on stocks," said Hiroyuki
Nakai, chief strategist at Tokai Tokyo Research Centre in Tokyo,
referring to expanded easing by the BOJ and a reallocation of
funds to domestic stocks by the public pension fund.
    Investors are hopeful that an election victory would free
Abe's hand to push through unpopular policies seen as crucial
for growth, like structural reforms, after the economy slipped
into recession in the third quarter. [ID: nL3N0T509I]
    "After the election, Prime Minister Abe will likely put
aggressive reformers in key posts," said Robert Feldman of
Morgan Stanley MUFG Research Japan in a note.
    Market participants view corporate tax and labour market
reforms as crucial for Japan's economy, and say Abe should
implement the regulatory changes in a timely manner.
    With the yen plumbing seven-year lows against the dollar at
117.18, Japanese exporter shares received a boost.
    Toyota Motor Corp and Panasonic 
outperformed the market, adding 0.7 percent and 1.1 percent
respectively.   
    Also in focus was the Bank of Japan's policy decision later
in the day, especially comments by governor Haruhiko Kuroda on
the country's slide into recession and Abe's decision to delay
the sales tax hike. [ID: nL3N0T73CQ]
    The JPX-Nikkei Index 400 added 0.3 percent to
12,760.46.

 (Reporting by Thomas Wilson; Editing by Shri Navaratnam)