Tokyo - Japanese shares plummeted on Thursday as market sentiment was hurt by a stronger yen and the finance minister's reluctance to lower the corporate tax rate.
The benchmark Nikkei 225 Stock Average lost 297.22 points, or 2.12 per cent, to end at 13,752.94 while the broader-based Topix index was down 19.52 points, or 1.67 per cent, at 1,151.82.
Finance Minister Taro Aso said on Thursday, “Even if we cut the corporate tax rate, it would have little effect” on the Japanese economy, the Kyodo News agency reported.
The minister stressed that only around 30 per cent of companies currently pay the tax while the rest are exempt on the grounds of poor business performance, Kyodo reported.
On Monday, the Nikkei business daily reported, citing government sources, that Prime Minister Shinzo Abe called for a study on cutting
corporate tax as a confidence-boosting counterweight to a sales tax hike.
On currency markets at 3 pm (08:00 SA time), the dollar traded at 97.69-70 yen, down from Wednesday's 5 pm quote of 98.19-20 yen.
The euro was quoted at 129.82-84 yen, down from 130.30-34 yen late Wednesday and at 1.3287-3292 dollars, up from 1.3270-3271
A stronger yen makes Japanese goods more expensive overseas and erodes repatriated earnings. - Reuters