Nikkei rises on tax relief, hopes for economic rebound
* 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)
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