Japanese shares boosted by hopes of tax hike delay
30 May 2016
- From the section Business
Japanese shares have kicked off the week on a positive note on hopes that the government might delay a rise in sales tax due next year.
At the close, the benchmark Nikkei 225 rose 1.39% to 17,068.02.
Prime Minister Shinzo Abe wants to delay the nation’s tax hike to 2019, according to media reports, including Japan’s Nikkei newspaper.
The next tax hike was supposed to take place in April next year, with an increase to 10% from the current 8%.
The planned increase was initially designed to help balance the national budget. But there has been increasing pressure on Mr Abe to postpone the tax hike, to help Japan avoid slipping into deflation.
One report suggested an official announcement could take place on Wednesday, at the end of Japan’s current session on parliament.
At the end of Monday’s trading session, 195 stocks had closed higher, while 23 stocks finished lower.
Technology stocks, including Panasonic, Sony and Sharp, were all in positive territory, as well as banking stocks.
As for consumer-related shares, Fast Retailing, owner of clothing retailer Uniqlo saw its shares jump by 1.31% at the close, after a 0.4% gain at the start of Monday’s session.
Fresh data from Japan on Monday showed retail sales fell 0.8% in April, compared to the previous year, not as bad as the 1.2% drop expected by analysts.
Shorter trading week
In Australia, the ASX/200 has remained flat throughout the Monday session, and closed at 5,408 points. Similar trading day in South Korea, where the benchmark Kospi barely moved and then closed 0.1% lower at 1,697.13.
Over in Hong Kong the benchmark Hang Seng index kicked off Monday’s session higher by 0.72% at 20,725.58.
China’s Shanghai Composite has started the trading week at 2,825.92, nudging up 0.18%.
It is a shorter trading week elsewhere, which somewhat explains the lack of direction for many Asian bourses.
Markets in the UK are shut on Monday for Spring bank holiday.
In the US, Wall Street is also shut due for Memorial Day. Trading in those two markets will resume on Tuesday.