Nikkei drops on fears government will proceed with sales tax hike
By Joshua Hunt
TOKYO May 23 (Reuters) - Japanese stocks fell on Monday on fears that the government will proceed with its plan to raise the sales tax next April, risking a further blow to the sluggish economy.
The Nikkei share average slipped 0.5 percent to end at 16,654.60 points, after dropping more than 1 percent at one point.
Japanese Finance Minister Taro Aso said he told U.S. Treasury Secretary Jack Lew that Japan will proceed with an April sales tax hike that market participants have long expected would be delayed.
The reports added to concerns over Japan's weak consumer sentiment, while the profit outlook for exporters' shares also suffered as the yen strengthened against the dollar due in part to Japan's much larger-than-expected trade surplus in April.
Home appliances and electronics exporter Panasonic Corp edged down 0.3 percent while auto exporter Toyota Motor Corp ended the day 1 percent lower.
The broader Topix fell 0.4 percent to end at 1,338.68 with all but 10 of its 33 subindexes in negative territory.
The JPX-Nikkei Index 400 declined 0.4 percent to 12,090.65. (Reporting by Joshua Hunt. Editing by Kim Coghill)
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