Tokyo stocks close up 1.22pc
September 26, 2013 - 9:27:24 am
TOKYO: Tokyo stocks closed 1.22 percent higher Thursday, reversing early losses as the dollar strengthened against the yen following a report that Japan may cut corporate taxes.
The benchmark Nikkei 225 index added 178.59 points to 14,799.12, snapping a three-day losing streak, while the Topix index of all first-section shares was up 0.77 percent, or 9.34 points, to 1,220.49.
"The government's announcements about a sales tax hike and economic stimulus are highly anticipated any related news will be seen as a trading cue," said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.
Kyodo news agency said Tokyo was mulling a cut in the tax rate on companies to allay fears that a planned rise in the nation's sales levy -- to 8.0 percent from 5.0 percent -- would hurt Japan's recent economic revival.
A dealer at a major Japanese bank in Tokyo told AFP that, while speculation about the tax cut is not new, investors were hoping the government will confirm it is eyeing such a move.
The possible rate reduction is expected to come in a wider economic package that Prime Minister Shinzo Abe is set to unveil next week.
In share trading, Japanese housing equipment maker Lixil Group rose 3.91 percent to 2,099 yen. After the Tokyo market closed, German bathroom and kitchen fittings maker Grohe AG confirmed that it was being bought by the Japanese firm in a deal worth about $4.0 billion.
Fast Retailing was up 3.43 percent at 37,600 yen following a report that said sales at its Uniqlo casual clothing chain topped 1.0 trillion yen ($10.43 billion) in the fiscal year ended August.
Mobile carrier SoftBank rose 3.66 percent to 6,780 yen on news Chinese e-commerce giant Alibaba plans to hold an initial public offering in New York that could raise as much as $70 billion.
SoftBank is the Chinese firm's biggest shareholder and its stake could be worth about $25 billion, according to Dow Jones Newswires.
On currency markets, news of the possible tax cuts boosted confidence among traders who sold the safe-haven yen.
The dollar bought 98.92 yen in afternoon trade, well up 98.46 yen in New York late Wednesday. (AFP)