Tokyo stocks climb by break on inflation data

May 27 : (AFP) – Tokyo stocks rose on Friday morning after Japanese inflation data showing monthly prices falling and media reports about a consumption tax hike delay bolstered hopes of extra Bank of Japan stimulus measures.

Core consumer prices, which exclude volatile fresh food prices, dropped 0.3 percent in April on the heels of a similar drop in March, official figures showed shortly before markets opened.

The negative reading dealt a blow to Tokyo’s faltering war on deflation, raising pressure on the BoJ to expand its vast monetary easing programme, analysts said.Sentiment was also boosted by Japanese press reports saying that Prime Minister Shinzo Abe was inclined to delay a planned sales tax hike over concerns it could damage the already fragile economy.

“Given the series of reports we’ve had, the sales tax hike is almost certainly going to be pushed back,” Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center, told Bloomberg News.”Foreign investors who’d felt some uncertainty over policy could see this favourably.”

By the break, Tokyo’s benchmark Nikkei 225 index climbed 0.44 percent, or 73.86 points, to 16,846.32, while the broader Topix index of all first-section shares gained 0.52 percent, or 6.95 points, to 1,349.82.
Tokyo is scheduled to raise the sales tax to 10 percent from eight percent in April 2017.

As the outlook for Japanese inflation remains weak, the BoJ could possibly increase its massive 80 trillion yen ($730 billion) annual asset-buying plan as early as after its next policy meeting in June.

“If you look at economic and price fundamentals, the BoJ has to ease further soon,” said Credit Suisse economist Takashi Shiono.In currency markets, the dollar rose to 109.93 yen from 109.76 yen Thursday in New York.

In share trading, energy explorer Inpex surged 3.27 percent to 880.7 yen and refiner JX Holdings gained 0.44 percent to 431.9 yen.Mitsubishi UFJ Financial Group rose 0.69 percent to 538.8 yen, while mobile giant SoftBank advanced 1.69 percent to 6,076 yen.

Among the losers, Toyota slipped 0.19 percent to 5,585 yen and Sony was also 0.19 percent lower at 3,066 yen. RSS