[HONG KONG] Asian markets were mixed Wednesday as Tokyo extended a rally after the dollar broke 116 yen for the first time in seven years, while speculation swirls that Japan may put off another unpopular sales tax hike.
Wall Street provided support for buyers again after the Dow and S&P 500 squeezed out another record for a fifth straight session, while investors await the release this week of Chinese indicators and a G20 summit at the weekend.
Tokyo climbed 0.88 per cent by the break, Hong Kong was 0.20 per cent higher and Seoul put on 0.43 per cent, while Shanghai lost 0.20 per cent and Sydney eased 0.70 per cent.
Japanese shares have surged almost 12 per cent since the end of October, helped by the Bank of Japan's decision to widen its monetary easing, which sent the yen plunging.
They were given fresh momentum Wednesday as investors digested speculation that Prime Minister Shinzo Abe is mulling a delay to a sales tax hike as the economy struggles to overcome the impact of a rise in April.
The increase seven months ago has been blamed for throwing a tentative economic recovery into reverse and threatens another technical recession.
Major Japanese newspapers reported Wednesday that Abe may call a snap election next month if he decides to put off the second tax hike.
His ruling coalition would be likely to win the election, which would be greeted positively by the stock market and trigger fresh yen-selling, analysts said.
In foreign exchange deals, the dollar was at 115.63 yen against 115.74 yen in New York, where it topped 116 yen for the first time since October 2007.
The euro also jumped to 144.15 yen, compared with 144.38 yen in US trade, while it also bought US$1.2455 against US$1.2474.
"Speculation about the sales tax deferment is going to cause the currency markets to be volatile for a while, and that could result in more stock market volatility as well," said Masayuki Doshida, senior market analyst at Rakuten Securities.
On Wall Street, the Dow ended higher, adding 0.01 per cent, while the S&P 500 edged up 0.07 per cent, both posting record closes for five straight sessions. The Nasdaq added 0.19 per cent.
Oil prices slipped. US benchmark West Texas Intermediate for December delivery fell 49 cents to US$77.45 while Brent crude for December was down 44 cents to US$81.23.
Gold was at US$1,162.00 an ounce, compared with US$1,151.05 late Tuesday.