TOKYO – Tokyo shares fell in early trade Thursday,after the yen spiked on a decision to delay a sale tax hike that had threatened to undermine economic recovery, AFP reports.
The currency held sharp gains against the dollar, weighing on exporters, after Prime Minister Shinzo Abe said Wednesday he would postpone raising the levy.
The decision fuelled speculation that Japan’s central bank will hold off adding stimulus measures to boost sagging growth in the world’s number-three economy.
“There’s now less chance of more Japanese monetary policy, particularly when Abe said he’s thinking about doing more fiscal initiatives,” Tony Farnham,Sydney-based analyst at Patersons Securities, told Bloomberg News.
“That should have the US dollar on the back foot for a period of time.” In early trading on Thursday, the greenback slipped to 109.31 yen from 109.53 yen Wednesday in New York.
Tokyo’s benchmark Nikkei 225 stock index lost 1.32 percent, or 223.50 points,to 16,732.23 in early deals, following a sharp drop the previous day. The broader Topix index of all first-section shares slipped 1.11 percent, or 15.17 points, to 1,346.90.
Tokyo’s negative start followed a lacklustre lead from Wall Street, where the mood was coloured by the lack of significant improvement in purchasing manager index reports for manufacturing activity in China, the eurozone and the United States.
In each case the PMIs showed little growth in the sector, a sign that efforts to boost the global economy have yet to gain traction. The Dow ended practically flat on Wednesday and the S&P 500 and tech-rich Nasdaq both gained just 0.1 percent.
In share trading, Toyota lost 0.93 percent to 5,701 yen and Nissan dropped 0.85 percent to 1,100 yen. Energy explorer Inpex slumped 2.10 percent to 879.5 yen and refiner JX Holdings was 0.72 percent off at 424.4 yen.