TOKYO: Tokyo stocks rose 0.43 percent on Wednesday as a weak yen and another record close on Wall Street helped pushed the Japanese market to a fresh seven-year high.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange closed up 72.94 points at 17,197.05, while the Topix index of all first-section shares edged 0.13 percent, or 1.84 points, higher to 1,377.05.
The yen, which has plunged since the Bank of Japan expanded its monetary easing programme last month, slipped further Tuesday on speculation Prime Minister Shinzo Abe may put off next year's planned sales tax increase.
In Tokyo, the dollar on Wednesday bought 115.23 yen, after soaring past 116 in New York for the first time since October 2007.
The tax rumours come as the government tries to deal with the fall-out of an April levy hike that threw a tentative recovery into reverse and threatens to plunge the world's number three economy into recession.
"Speculation about the sales tax deferment is going to cause the currency markets to be volatile for a while, and that could result in more stock market volatility as well," said Masayuki Doshida, senior market analyst at Rakuten Securities.
Abe needs to decide whether to go ahead with plans to raise the nation's sales tax to 10 percent in October 2015 after the rise to 8.0 percent from 5.0 percent in April.
Tax hikes are designed to help curb Japan's massive public debts, but consumer spending remains lacklustre following this year's increase.
However, a delay could hit Japan's fiscal reform and weaken the yen further.
A cheaper yen helps Japanese exporters by making them more competitive abroad and boosting the yen value of their repatriated profits.
Eyes are now on Japan's July-September gross domestic product data due Monday.
Major newspapers also reported Wednesday that Abe may call a snap election next month if he decides to put off the next tax hike.
His ruling coalition would be likely to win the election, which would be greeted positively by the stock market and trigger fresh yen-selling, analysts said.
In Tokyo, Fujifilm jumped 4.44 percent to 4,007.5 yen after the firm said it expects its anti-influenza drug to be formally approved by early next year as a treatment for people infected with the Ebola virus.
Auto parts maker Takata gained 4.28 percent to 1,192.0 yen on bargain-hunting, after it faced massive selling pressure over an air bag defect that has been linked to at least four deaths in the US.
Toyota rose 0.38 percent to 6,839.0 yen, while Sony shares were up 0.48 percent at 2,365.5 yen. (AFP)
