Japanese stocks rose after Prime Minister Shinzo Abe postponed a planned sales-tax increase, called a snap election and ordered his ministers to start preparing a stimulus package.

The Topix index climbed 0.6 percent to 1,402.67 as of 9:01 a.m. in Tokyo after gaining 2.1 percent yesterday. The Nikkei 225 Stock Average advanced 0.4 percent to 17,415.72 today. The yen slipped 0.1 percent to 116.93 per dollar after weakening 0.2 percent yesterday. Abe will delay raising the levy by 18 months, he said at a press conference yesterday. Parliament will be dissolved Nov. 21. The vote will probably be Dec. 14, said people with knowledge of the ruling partys strategy.

The Topix has almost doubled since November 2012, with investors in Japanese stocks about $1 trillion richer, as policies of Abe and the Bank of Japan weakened the yen and spurred inflation. Through yesterday, the measure was up 18 percent from an Oct. 17 low after the central bank added to quantitative easing, the $1.1 trillion pension fund pledged to buy more shares and amid speculation Abe wouldnt go through with the tax increase.

Japanese stocks tend to rise after elections are called. In 11 elections since 1980, the Topix index has posted average total returns of 3.1 percent between the dissolution of parliament and the vote, according to data compiled by Bloomberg and Daiwa Securities Group Inc.

The BOJ ends a two-day meeting and issues a policy statement today.

Source : Bloomberg