Tokyo stocks open higher on tax hike delay hope

Tokyo stocks opened higher Monday, extending three straight sessions of gains as hopes the government would delay a consumption tax hike lifted sentiment.

In opening deals, the benchmark Nikkei 225 index at the Tokyo Stock Exchange added 0.82 percent, or 138.88 points, to 16,973.72, while the broader Topix index of all first-section shares gained 0.71 percent, or 9.55 points, to 1,359.48.

Sentiment was boosted by Japanese press reports saying that Prime Minister Shinzo Abe had decided to delay a planned sales tax hike over concerns it could damage the already fragile economy.

Tokyo was scheduled to raise the sales tax from eight percent to 10 percent in April 2017.

But Abe on Saturday told his close aides, including Finance Minister Taro Aso, that he intends to push back the planned increase to October 2019, according to Japanese media.

Abe is expected to announce the decision later this week, the reports said.

The increases also follow a positive lead from US equity markets at the end of last week, with the three main indexes on Wall Street rising following Federal Reserve boss Janet Yellen's much-anticipated remarks Friday at Harvard University.

At the event, Yellen implied that US interest rates could be lifted soon, saying that a rate hike "probably" would be justified "in the coming months" if economic data continued to strengthen.

"The stock market's reaction is changing and coming around to the idea that the US economy is strong enough to withstand higher rates," Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News.

"The expectations for an increase are leading to a stronger dollar and firmer stocks globally, and that's a stabilising factor for Japanese shares."

On Wall Street, the Dow closed 0.3 percent higher, the S&P 500 was up 0.4 percent and the tech-rich Nasdaq advanced 0.7 percent.

On currency markets, the dollar rose to 110.78 yen from 110.37 yen Friday in New York.