Nikkei Rises with Election and Tax Delay News

Japan’s Nikkei bounded on Tuesday as investors anticipated the announcement of a snap election and a delay to the planned sales tax rise.

The Nikkei 225 closed up 2.2% at 17,344.06, after having suffered its biggest one-day drop since August on Monday.

After the markets closed, Japan’s Prime Minister Shinzo Abe called an early election, two years ahead of schedule.

At a news briefing, he said he would dissolve parliament later this week.

He also said he was delaying a planned but unpopular increase in the country’s sales tax.

In April this year, the sales tax was increased for the first time in 17 years, from 5% to 8%, but the move has dented consumer confidence and has had a negative impact on the economy.

Private consumption accounts for some 60% of Japan’s economy.

The yen traded at 116.51 yen to the dollar after hitting a seven-year low of 117.06 on Monday.

Elsewhere in Asia, shares in Hong Kong’s Hang Seng index closed down 1.1% at 23,529.17 points after data showed that average new home prices in China’s 70 major cities fell 2.6% in October from a year earlier.

On the mainland, the Shanghai Composite was closed down 0.71% at 2,456.37 points.

via BBC

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