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Tokyo's Nikkei index flat by break

TOKYO: Tokyo’s Nikkei 225 stock index was flat Wednesday morning, as investors await the outcome of a Bank of Japan meeting and comments from its chief on the government’s decision to delay a sales tax rise.

The benchmark Nikkei inched up 0.02 percent, or 3.70 points, to 17,347.76 by the break, while the Topix index of all first-section shares rose 0.22 percent, or 3.12 points, to 1,398.00 yen.

The Japanese market ticked up at the start as the yen weakened further against the dollar — a plus for exporters — but the Nikkei’s rise was short lived.

In late morning forex trade, the dollar fetched 117.11 yen against 116.83 yen in New York.

On Tuesday, Japanese Prime Minister Shinzo Abe called for early elections to seek a mandate for delaying next year’s sales tax increase and to support his economic policies, after a levy rise in April helped push the world’s number three economy into recession.

“Abe’s actions were in line with market expectations, which had been building for several days,” said Eiji Kinouchi, chief technical strategist at Daiwa Securities.

“Historically, the market tends to rise between the time elections are declared and when the vote actually occurs, and foreign investors, importantly, appear to be embracing the decision.”

Many analysts expect the election to take place around December 14.

In share trading, Takata dropped 5.05 percent to 1,127.0 yen as US safety regulators pushing for a nationwide recall of cars with defective airbags made by the embattled auto parts firm.

An earlier recall limited to several mostly southern US states needed to be expanded to the full country, said David Friedman, deputy administrator of the National Highway Traffic Safety Administration.

Mitsubishi UFJ slipped 0.08 percent to 669.3 yen after Japan’s biggest bank was fined $315 million by a US banking regulator Tuesday for pressuring a consultant to water down a report on transactions with Iran, Sudan and other sanctioned countries.

On Wall Street on Tuesday, the Dow Jones Industrial Average climbed 0.23 percent and the S&P 500 rose 0.51 percent to close at fresh records following solid economic data from Germany and the United States.-AFP

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