Japanese stocks jump on expectations of fresh economic stimulus.
Japan’s Prime Minister, Shinzo Abe, is looking to extend economic stimulus and delay an increase in consumptive tax from 8% to 10% as Japan braces for a snap election possibly as early as December. The most recent increase in consumptive tax took place in April, which led to a reduction in Japan’s output and speculation on the country going into deflation. This has led to the yen reaching close to its lowest in seven years down by 0.3 per cent today. This has giving exports, especially in the car industry, an advantage that was reflected in increases on the Nikkei225.
USDJPY chart from MT4 traded just below the seven-year high of 116.11 hit on Tuesday.
The initial idea concerning tax increases was to halve the government debt, now at double the size of the economy and rising. Though manufacturing is benefitting at present, the delays could impede the elimination of the primary deficit, originally set for 2020 under the two-tax increase plan.
S&P 500 in New York is projected to add 7 points to 2,045, a record day’s conclusion due to a raise in interest rates in the US being put on hold.
FTSE300 recovered 0.6% after being down 1.1% in the previous session when fines on UK banks amounting to billions were announced.
France's CAC40 and Germany's DAX up 0.4 percent from previous close.
Nikkei225 chart from MT4
Trade CFDs for Stocks and Indices on STOCK.com with full training given to clients.