Tokyo stocks soar as hopes for tax-hike delay lift mood

Tokyo's benchmark index surged Monday, ending above 17,000 points for the first time in a month as a weaker yen and hopes the government would delay a consumption tax hike powered shares higher.

Japanese media said Prime Minister Shinzo Abe would delay a planned sales tax hike over concerns it could damage the already fragile economy, after an earlier rise pushed the country into a brief recession.

Tokyo was scheduled to raise the sales tax from eight percent to 10 percent in April 2017, to help pay down Japan's massive national debt.

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 local press reports.

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

At the close, Tokyo's Nikkei 225 was 1.39 percent, or 233.18 points, higher at 17,068.02, while the broader Topix index of all first-section shares added 1.19 percent, or 16.08 points, to 1,366.01.

US equity markets ended higher on Friday following Federal Reserve boss Janet Yellen's much-anticipated remarks at Harvard University.

She implied US interest rates could be lifted soon, saying that a rate hike would "probably" 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 currency markets, the dollar rose to 110.95 yen from 110.37 yen Friday in New York.

The weaker yen boosted some exporter shares, with Toyota rising 1.65 percent to 5,681 yen and Nissan jumping 3.80 percent 1,105 yen.

Banking giant Mitsubishi UFJ tacked on 0.60 percent to close at 546.0 yen.