Please view the main text area of the page by skipping the main menu.

Tokyo stocks up in morning as PM Kishida delays capital gains tax hike

People pass by an electronic stock board of a securities firm in Tokyo on Oct. 11, 2021. (AP Photo/Koji Sasahara)

TOKYO (Kyodo) -- Tokyo stocks rose Monday morning as market sentiment improved after Prime Minister Fumio Kishida said on the weekend he will not immediately increase the capital gains tax rate.

    The 225-issue Nikkei Stock Average climbed 440.01 points, or 1.57 percent, from Friday to 28,488.95. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 27.66 points, or 1.41 percent, at 1,989.51.

    Gainers were led by air transportation, mining and transportation equipment issues.

    The U.S. dollar climbed to the mid-112 yen level, its highest level since December 2018, extending gains from late last week on a rise in U.S. Treasury yields which fueled expectations of a wider interest rate gap between the United States and Japan, dealers said.

    At noon, the dollar fetched 112.54-55 yen compared with 112.17-27 yen in New York and 111.95-96 yen in Tokyo at 5 p.m. Friday.

    The euro was quoted at $1.1571-1571 and 130.21-25 yen against $1.1570-1580 and 129.85-95 yen in New York and $1.1547-1548 and 129.27-31 yen in Tokyo late Friday afternoon.

    Shares were mixed in early trading, weighed down by declines on Wall Street late last week, but extended gains toward the end of the morning on Kishida's remark Sunday on a TV program that he will not change the capital gains tax rate for the time being.

    Kishida's plan to raise the tax on capital gains and dividends from the current flat 20 percent to implement his wealth redistribution policy was one of the market concerns that had triggered the Nikkei's recent consecutive drops, brokers said.

    "Mr. Kishida's comment partly helped the market as his capital gains tax plan was said to be a selling factor," said Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co.

    "Japanese shares were supported by a firm start on the Chinese market as well as on optimism that the power shortage in China will be resolved after media reports that the country may increase coal imports," he added.

    Local media said the Chinese government has also ordered miners to boost coal output in Inner Mongolia, a major production site, to tackle the electricity shortage that could deal a heavy blow to its economic recovery.

    At the Tokyo Commodity Exchange, Middle East crude oil futures briefly eclipsed 54,500 yen per liter, hitting the highest level since October 2018, following advances in the benchmark West Texas Intermediate crude futures. The energy price has been climbing recently on expectations of a global supply crunch.

    On the First Section, advancing issues outnumbered decliners 1,670 to 420, while 87 ended the morning unchanged.

    Major automakers were among exporters aided by the U.S. dollar's strength against the yen.

    Toyota Motor gained 50.00 yen, or 2.6 percent, to 1,973.00 yen, Mitsubishi Motors jumped 15 yen, or 4.9 percent, to 319 yen and Honda Motor added 78 yen, or 2.3 percent, to 3,448 yen.

    Sony Group climbed 465 yen, or 3.9 percent, to 12,325 yen.

    The Japanese electronics conglomerate was reported late last week to be a potential partner for Taiwan Semiconductor Manufacturing Co. to build a chip-making factory in Japan, a project for which the Japanese government is considering providing financial support.

    Also in The Mainichi

    The Mainichi on social media