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| Japanese stock market sees biggest one-day rise since financial crisis | Japanese stock market sees biggest one-day rise since financial crisis |
| (35 minutes later) | |
| Japan’s stock market soared on Wednesday after the prime minister, Shinzō Abe, promised to cut corporate taxes and maintain the ultra-low borrowing costs that have supported the country’s economic recovery over the last two years. | |
| The Nikkei 225 index rose by 7.7%, its biggest one-day rise since the 2008 global financial crisis, as Abe, fresh from his recent re-election as LDP leader, said he planned to cut corporation tax by three percentage points and sounded optimistic on reaching a trans-Pacific trade deal. | The Nikkei 225 index rose by 7.7%, its biggest one-day rise since the 2008 global financial crisis, as Abe, fresh from his recent re-election as LDP leader, said he planned to cut corporation tax by three percentage points and sounded optimistic on reaching a trans-Pacific trade deal. |
| Investors were also cheered by signals from China that the government will boost infrastructure spending and speed up the reform of its tax system, adding to other steps to stimulate sputtering growth. The Shanghai Composite closed 2.3% higher. | Investors were also cheered by signals from China that the government will boost infrastructure spending and speed up the reform of its tax system, adding to other steps to stimulate sputtering growth. The Shanghai Composite closed 2.3% higher. |
| European and US markets also climbed on hopes that the authorities in China want to arrest a slowdown in growth that has triggered turmoil in global markets over the last month. | European and US markets also climbed on hopes that the authorities in China want to arrest a slowdown in growth that has triggered turmoil in global markets over the last month. |
| The FTSE 100 closed the day 83 points higher at 6229 after an initial surge was partially reversed by poor industrial production and trade figures. US markets also lost early gains as figures showing a surge in job openings – to 5.7m in July from 5.3m in June – suggest strength in the economy ahead of the US Federal Reserve’s interest rate meeting next week. | The FTSE 100 closed the day 83 points higher at 6229 after an initial surge was partially reversed by poor industrial production and trade figures. US markets also lost early gains as figures showing a surge in job openings – to 5.7m in July from 5.3m in June – suggest strength in the economy ahead of the US Federal Reserve’s interest rate meeting next week. |
| Ipek Ozkardeskaya, a market analyst at London Capital Group, said: “The restatement of loose fiscal and monetary measures has cleared the clouds over the Japanese markets.” | |
| But she warned the Nikkei’s optimism could quickly evaporate. She said market conviction in the prime minister’s “Abenomics” growth programme was declining after his failure to deliver more than one of his three arrows of reform. | |
| The Bank of Japan has embarked on aggressive monetary easing at Abe’s bidding, but he has failed to get support in parliament for a massive fiscal stimulus and structural reforms to boost Japan’s competitiveness. |