Tokyo stocks rise on hopes Tokyo will delay sales tax hike

Tokyo's benchmark index rose Tuesday, notching up its longest winning streak this year, as investors cheered at the growing likelihood Japan will delay a sales tax hike, while the yen's decline lifted exporters.

Tokyo published lacklustre data earlier Tuesday that reinforced expectations the government would push back the levy hike to avoid damaging a fragile economy.

That view won further support as Finance Minister Taro Aso said weak spending was a sign raising the cost of consumer goods would be a mistake.

"Investors are reacting positively to the prospect of a sales tax delay and an additional fiscal package," Masayuki Otani, chief market strategist at Securities Japan, told Bloomberg News.

"The fact that Aso has individually commented on this has a large impact."

Tokyo was scheduled to raise the sales tax from eight percent to 10 percent next year to help pay down Japan's massive national debt, but weekend comments by Abe suggested he would push back the increase to 2019.

At the close, the Nikkei 225 at the Tokyo Stock Exchange advanced 0.98 percent, or 166.96 points, to 17,234.98, its fifth positive session in a row and the longest run since the start of 2016.

The broader Topix index of all first-section shares was up 1.01 percent, or 13.79 points, to finish at 1,379.80.

Shortly before markets opened, official data showed Japan's industrial production edged up in April, despite factory shutdowns sparked by a pair of deadly earthquakes that rocked southern Kyushu last month.

But the relatively modest rise -- 0.3 percent -- and a separate decline in household spending, did little to bolster hopes for Tokyo's faltering economic growth plan, after another round of disappointing inflation data last week.

On currency markets, the yen eased against the dollar as traders weighed the impact of a likely US interest rate hike, with the greenback changing hands at 111.15 yen against 111.13 yen on Monday.

Exporters rallied including Toyota which gained 1.79 percent to 5,783 yen as its smaller rival Mazda jumped 2.71 percent to 1,911 yen.

Panasonic surged 3.63 percent to 1,031.5 yen after a report said it will stop producing liquid crystal panel displays for televisions. The company struggled to make money in the business as it faced off against lower-cost rivals overseas.

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