Friday 3 June 2016

Japanese stocks plunge as sales tax delayed

Japanese stocks plunged on Thursday but stocks elsewhere were mostly higher.

The Nikkei 225 tumbled 2.3 percent after the government moved to delay a sales-tax hike for more than two years.

In a note on Thursday, DBS said that this is the second time the consumption tax hike has been pushed back. "The second delay this time may have increased investors' concerns about economic uncertainties and skepticism about Abenomics," DBS said. "The postponement of the tax hike raises doubts over the sustainability of Japan's public debt".

Elsewhere in Asia though, the Shanghai Composite Index rose 0.4 percent and the Hang Seng Index rose 0.2 percent.

The S&P 500 rose 0.3 percent while the STOXX Europe 600 rose less than 0.1 percent after European Central Bank President Mario Draghi said at a news conference that he expected interest rates to stay at current or lower levels for an extended period.

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