Tokyo stocks dive after Abe's tax hike delay

Tokyo

JAPANESE Prime Minister Shinzo Abe's decision to further postpone a scheduled increase in the national sales tax - raising questions over the nation's fiscal health - sent Tokyo stocks plunging on Thursday while the yen climbed on market doubts about the future of the Bank of Japan's monetary policy.

At the same time, it became clear that the July 10 election to the Upper House of Japan's Parliament, which Mr Abe announced on Wednesday along with his decision to delay the tax hike, is going to be a pitched political battle between the government and an unusually united opposition front. Markets appeared to take fright at the prospect of turbulence on Japan's political scene in coming weeks, coupled with uncertainty over the future of Abenomics. The Nikkei 225 stock average dropped 393.18 points or 2.3 per cent to 16,562.55 while the yen climbed to 108.825 - up 2.4 per cent since Monday.