Nikkei posts biggest one-day rise since 2008

The Japanese share market ended sharply higher, as risk sentiments propelled by tracking strong rallies in the Wall Street overnight, reiterated pledge from Prime Minister Shinzo Abe to lower the corporate tax rate, and yen depreciation against the major currency baskets. All of the Topix's 33 industry groups rose, with Pharmaceutical, Insurance, Financial Business, Securities & Commodities Futures, Rubber Products, and Nonferrous Metals leading the advance. The Nikkei Stock Average spurted 1343.43 points, or 7.71%, to end at 18770.51 points, its biggest gain since October 2008. The broader Topix index surged 6.4%, or 90.66 points, to 1507.37 at the close in Tokyo.

Mr Abe, who just won a mandate to lead the ruling Liberal Democratic Party for another three years on Tuesday, told a meeting of investors that he would seek to lower corporate tax and sounded optimistic on reaching a trans-Pacific trade deal. Abe said that the effective corporate tax rate, currently at around 35%, would be lowered at least by 3.3% next year. He also pledged to "go beyond that if possible". Abe said that the government will "push forward in reducing the rate down into the twenties over several years, bringing it to a level that compares favorably in the international context." And he said that will change Japan into a country for sustainable growth. Market participant were expecting easing of the corporate tax burden is a step toward giving companies more profits to put into employees' pockets.

 

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