Business

Japanese shares helped by tax delay hopes

Tokyo skyline Image copyright AFP

Japanese shares traded slightly higher on hopes that the government might delay a rise in sales tax.

The benchmark Nikkei 225 closed 0.4% higher at 16,834.84 points.

At the G7 summit, under way in Japan, Prime Minister Shinzo Abe warned the global economy may be on the verge of a financial crisis similar to that seen in 2008.

Japanese media say the comments may indicate the government intends to delay the sales tax increase.

The planned increase was designed to help balance the budget.

Yet with Japan skirting recession, there has been increasing pressure on Mr Abe to postpone this, so the country can avoid slipping into deflation.

Deflation pressure

Fresh data on Friday showed that consumer prices fell for a second month in April to 0.3%, adding more pressure on the central bank to make additional stimulus efforts to achieve the 2% inflation target.

Investors across the Asia Pacific region were also looking ahead to a speech by the chair of the US Federal Reserve, Janet Yellen on Friday, for signs of whether the Fed will raise interest rates in June.

China's Shanghai Composite traded 0.3% higher at 2,830.42 while Hong Kong's Hang Seng was 0.8% up at 20,564.40.

In Australia, the ASX/200 wrapped the day higher by 0.3% at 5,405.90.

South Korea's Kospi index closed the day 0.6% up at 1,969.17.

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