Japanese Prime Minister Abe Announces Third Step of Economic Reforms

Hiruki Nakamura
25 Jun, 2014
New York City

Stocks in Tokyo closed lower and investors turned cautious as violence in Iraq spread to more regions. Euglena announced a plan to develop bio-diesel engine with Isuzu Motor. Toyota plans to begin selling fuel-cell vehicles in Japan by the end of this fiscal year.

[R]4:30 PM Tokyo – Stocks in Tokyo closed lower and investors turned cautious as violence in Iraq spread to more regions. Euglena announced a plan to develop bio-diesel engine with Isuzu Motor. Toyota plans to begin selling fuel-cell vehicles in Japan by the end of this fiscal year.[/R]

Stocks in Tokyo closed lower and market indexes declined for the second day this week as investors reviewed the latest government plan to spur economic growth.

Prime Minister Shinzo Abe announced a plan that was very close to the draft released a month ago that will lower corporate taxes to 30% over the next years beginning current year.

Prime Minister announced so called “third arrow” of his economic measures after monetary and fiscal stimulus proved to be catalysts to rekindle inflation and promote more economic activities.

The government also plans to lower trade barriers and remove hurdles for consolidation of agricultural land and create special economic zones with lighter regulations. The government is also willing to pass a new casino law to attract more tourists.

The Nikkei 225 Stock Average slipped 109.63 or 0.7% to 15,266.61 and the broader Topix index slid 7.67 to 1,260.83.

The yen fell to close at 101.88 against one U.S. dollar.

Investors turned cautious as violence continued in the Iraq and a fighting broke out between Syrian forces and Iraq and overlooked the latest surge in new home construction in the U.S. and rising consumer confidence.

In addition, rebels in Iraq fortified recently acquired territory and U.S. Secretary of State John Kerry flew to Iraq and mediate an agreement among warring leaders.

New home construction surged in May at the fastest pace in 22 years and the second monthly increase in buildings followed a two months of sharp decline that was partly driven by harsh winter conditions.

Stocks in Review

Pioneer Corp declined 3.5% to 221 yen after the Nikkei newspaper reported electronic products maker agreed to sell its audio-video business to its rival Onkyo Corporation and Hong Kong-based Baring Private Equity Asia.

The transaction is expected to close in August.

Euglena Co dropped 12% to 1,399 yen after the company announced a plan to develop a next generation of bio-diesel project with Isuzu.

Euglena stock had surged 40% in the last five weeks of trading.

Toyota Motor Corp slid 4 yen to 5,957 yen after the automobile company said plan to start selling fuel-cell cars at about 7 million yen or $70,000 by March 2015.