Japanese stocks flat after growth disappoints

Japanese stocks flat after growth data misses expectations while other markets post gains

Associated Press

BANGKOK (AP) -- Slower-than-expected economic growth weighed on Japan's stock market Monday but gains were posted elsewhere in Asia following signs that China's economy may be picking up.

The Nikkei 225 index fell after the Cabinet Office reported that growth for the April-June quarter fell 2.6 percent, falling short of 3.6 percent that analysts had expected. But the losses were erased by midday, with the Nikkei flat at 13,615.29.

The results will make it more problematic for Prime Minister Shinzo Abe to carry out plans to raise the sales tax by 3 percentage points in April to improve public finances. The tax now stands at 5 percent.

Abe has "already given an official instruction to economic ministers to check and discuss the impact of the consumption tax hikes on the economy, before making a final decision sometime before mid-October," said Kazuhiko Ogata of Credit Agricole CIB in a market commentary.

A possible upswing in China's economy helped boost stocks in Hong Kong and elsewhere. Data released Friday showed a 9.7 percent rise in China's industrial production for July.

Analysts said the figures added weight to the argument that the recent soft patch in the world's second-largest economy may have come to an end.

Hong Kong's Hang Seng rose 1.3 percent to 22,099.30. South Korea's Kospi advanced 0.3 percent to 1,886.79. Australia's S&P/ASX 200 rose 0.6 percent to 5,087.10. Benchmarks in Singapore, Taiwan and mainland China also rose. New Zealand and the Philippines fell.

Benchmark oil for September delivery was down 7 cents to $105.90 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2.57, or 2.5 percent, to close at $105.97 per barrel on the New York Mercantile Exchange.

In currencies, the euro fell to $1.3321 from $1.3357 late Friday. The dollar rose to 96.56 yen from 96.19 yen.

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