Abe banks to Olympic wave to lift economy

Abe banks to Olympic wave to lift economy
Prime Minister Shinzo Abe of Japan speaks during the presentation by the Tokyo 2020 bid committee to host the 2020 Summer Olympic Games.

JAPAN - Japan is counting on Tokyo's hosting of the 2020 Olympics to lift the country's economy and sagging spirits.

The victory by Tokyo - which beat Istanbul and Madrid in the contest to host the Games - on Monday pushed up the stock market, particularly construction, property developers and other stocks expected to benefit from Olympics-related demand.

The Nikkei stock index closed at 14,205.23, gaining 2.48 per cent over last Friday's closing.

Also helping to lift stock prices was the government's upward revision of the gross domestic product (GDP) to 3.8 per cent growth for the April to June quarter, compared with earlier estimates of only 2.6 per cent.

The latest figure is expected to help Prime Minister Shinzo Abe decide on whether to go ahead with a planned sales tax hike from 5 to 8 per cent from next April.

Mr Abe had feared that the tax hike would cause a temporary drop in consumer demand immediately after its introduction.

But now, Japan's Olympics- driven economic activities are expected to offset any slump in consumer demand.

In Buenos Aires, where the selection of the Olympics host city had taken place, Mr Abe told a press conference he hoped the 2020 Games will become the "fourth arrow" of his Abenomics growth strategy to rid the country of its chronic deflation.

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