Japanese shares gave up early gains on Wednesday as investors booked profits after Prime Minister Shinzo Abe delayed a tax hike and said he would call a snap election to seek a fresh mandate for his economic policies.
Asian shares slipped to a three-week low as resource shares were hit by a fall in oil and other commodity prices and as Chinese shares lost momentum as investors continued to take profits after Monday's launch of the landmark Hong Kong-Shanghai trading link.
Japan's Nikkei 225 erased earlier gains to stand flat by midday, showing little reaction after the Bank of Japan maintained its policy as expected after a surprise easing last month.
"Considering the current economic conditions, postponing the consumption tax would be positive for stocks," Ryota Sakagami, chief strategist at SMBC Nikko Securities, said in report.
Tax Delay
Abe's tax-hike delay by 18 months is expected to help the world's third-biggest economy, which unexpectedly slipped back into a recession in the June-September quarter after an earlier sales tax increase clobbered consumption.
The MSCI Asia Pacific Index dropped 0.2 percent by 12:52 p.m. in Tokyo, with Hong Kong’s Hang Seng Index extending declines to a third day amid declining use of a new link with the Shanghai bourse. The Bloomberg Dollar Spot Index added 0.2 percent, with the greenback climbing as high as 117.31 yen. Standard & Poor’s 500 Index futures were little changed after the gauge climbed to a record. New York oil fell 0.4 percent as gold slipped 0.3 percent.
The Hang Seng Index (HSI) fell 2.3 percent in the previous two days. A gauge of Chinese companies listed in the city dropped 0.2 percent today, while the Shanghai Composite Index slid 0.2 percent.