Tokyo stocks close down 0.24pc

April 01, 2014 - 9:36:26 am

TOKYO: Tokyo stocks fell 0.24 percent on profit-taking Tuesday, despite a pick-up in Japanese business confidence and as the country ushered in its first sales tax hike in years.

The benchmark Nikkei-225 index lost 35.84 points to finish at 14,791.99, but the Topix index of all first-section shares edged up 0.11 percent, or 1.36 points, to 1,204.25.

The Nikkei's decline ended a four-day rally which saw the headline index gain more than 3.0 percent over last week.

Tokyo investors appeared largely unmoved by the Bank of Japan's quarterly Tankan survey which showed confidence among major firms surged to its highest level since December 2007.

A reading for large manufacturers rose to plus 17 for the March quarter from plus 16 in its December survey -- marking the difference between firms that are upbeat from those that see conditions as unfavourable.

Small and medium-sized firms, as well as companies in the non-manufacturing sector, were also more positive on conditions for their businesses and the wider economy.

However, the closely watched survey of more than 10,000 companies pointed to tepid corporate investment and slumping sentiment for the April-June quarter, possibly due to the sales tax rise, which came into effect on Tuesday.

Tokyo approved the hike to 8.0 percent from 5.0 percent to tame a huge public debt, but the last time Japan brought in a higher sales levy, in 1997, it was followed by years of deflation and tepid economic growth.

That has aggravated worries that consumer spending will dive and derail an economic recovery.

But some analysts believe the economy is more resilient.

"I believe in three months' time we will be saying the impact on the economy from the tax increase wasn't that bad," Hamagin Research Institute economist Yuki Endo told Dow Jones Newswires.

"The economy will overcome the tax hike," he said.

In share trading, Toyota slipped 0.22 percent to 5,813 yen, while rival automaker Nissan gained 0.10 percent to 921 yen.

Sony rose 1.97 percent to 2,011 yen and Sharp was unchanged at 314 yen.

In forex trading, the dollar crept up to 103.29 yen from 103.22 yen in New York on Monday.

On Wall Street, the Dow Jones Industrial Average rose 0.82 percent Monday. The broad-based S&P 500 also added 0.79 percent and the Nasdaq Composite jumped 1.04 percent. (AFP)





 





 

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