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Tokyo stocks open flat

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(Globalpost/GlobalPost)

Tokyo stocks opened flat on Tuesday despite a Bank of Japan survey showing business confidence in the January-March quarter soared to a more than six-year high, as Japan ushered in its first sales tax hike in years.

The benchmark Nikkei-225 index was down 0.01 percent, or 1.98 points, to 14,825.85 at the start before losing ground in the first hour of trading, dipping 0.27 percent by 0100 GMT.

The BoJ's quarterly Tankan survey, released shortly before the market opened, surged to its highest level since December 2007.

A reading for large manufacturers rose to plus 17 for the March quarter from plus 16 in its December survey -- marking the difference between firms that are upbeat from those that see conditions as unfavourable.

Small and medium-sized firms, as well as companies in the non-manufacturing sector, were also more positive on conditions for their businesses and the wider economy.

However, the closely watched survey of more than 10,000 companies also pointed to tepid investment among major firms and slumping sentiment for the April-June quarter, possibly due to the sales tax rise, which came into effect on Tuesday.

Tokyo approved the hike from 5.0 percent to 8.0 percent in an effort to tame huge public debt.

The last time Japan brought in a higher sales levy, in 1997, it was followed by years of deflation and tepid economic growth.

In forex trading, the dollar bought 103.29 yen, from 103.22 yen in New York on Monday.

The euro bought 142.30 yen and $1.3774, from 142.15 yen and $1.3772 in US trading.

On Wall Street, the Dow Jones Industrial Average rose 0.82 percent Monday. The broad-based S&P 500 also added 0.79 percent and the Nasdaq Composite jumped 1.04 percent.

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http://www.globalpost.com/dispatch/news/afp/140401/tokyo-stocks-open-flat-0