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Tokyo stocks slip as growth data fails to excite

Tokyo stocks slip as growth data fails to excite

TOKYO: Tokyo stocks slipped Wednesday morning, with investors worried that data showing Japan’s economy grew slightly more than first thought in January-March could dent new expected stimulus and spending measures.

The world’s third-largest economy expanded 0.5 percent in the first quarter, the government said shortly before markets opened, marginally up from a preliminary 0.4 percent reading.

The figures come a week after Prime Minister Shinzo Abe said he would delay a sales tax hike that threatened to derail the country’s fragile recovery.

The Japanese leader is expected to announce a spending package within several months that could reach 10 trillion yen ($93 billion), according to earlier news reports.

But analysts said the revision could shrink the size of Tokyo’s spending programme, and “somewhat” lower the chances of fresh stimulus from the Bank of Japan, which holds a policy meeting next week.

However, the central bank was still likely to move in the coming months as it struggles to reach a two-percent inflation target.

“This figure may have an impact of the second supplementary budget of the government but not so much on the BoJ’s judgement,” said Takashi Shiono, an economist at Credit Suisse.

At lunch, Tokyo’s benchmark Nikkei 225 index was down 0.33 percent, or 55.27 points to sit at 16,620.18, after moving between positive and negative territory during the morning session.

The Topix index of all first-section shares fell 0.41 percent, or 5.47 points, to 1,335.30.

The dollar fell to 106.89 yen from 107.39 yen Tuesday in US trade.

Exporters took a hit as the stronger yen clouded their profit outlook. Toyota was down 0.68 percent at 5,615 yen and Sony fell 0.87 percent to 3,075 yen.

Mitsubishi UFJ rose 0.37 percent to 535.2 yen after reports said the banking giant may quit its role as one of the primary underwriters for government bond sales.

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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