2014.11.1821:54:27UTC+00Japanese stocks climb on tax-hike delay, call for election by Abe

Japanese stocks rallied following Prime Minister Shinzo Abe’s announcement to delay the tax hike, call for a snap election, and prepare for a stimulus package.

The Topix Index added 0.7% to 1,404.68, 9:46 am, Tokyo time with brokerages leading the advance in the gauge’s 33 industry groups. In the previous trading day, the index climbed by 2.1%. The Nikkei 225 Stock Average jumped by 0.5% to 17,418.91 as the nation’s currency weakened by 0.2% to match the dollar at 117.08 yen per dollar. The yen has recently dipped to its lowest since October 2007.

In the press conference by Prime Minister Shinzo Abe yesterday, he announced that the tax hike will be delayed by 18 months. He also called for a snap election that will most probably be held on December 14 according to people that have an idea of the strategy of the ruling party. parliament will be dissolved by November 21.

Equities manager at SMBC Nikko Securities Inc., Hiroichi Nishi, commented to Bloomberg that the effects of the Abenomics for the past two year can be seen in the numbers, specifically, the stock prices. Nishi adds that the market mostly believe that the ruling party can win majority once more so there are expectations of a post-election growth strategies and decisions concerning deregulation, lowered corporate tax rate, and increased wages.