Photographer: Ma Ping/Pool via Bloomberg Shinzo Abe, Japan's Prime Minister, has called an early election and put off an increase to the country’s sales tax as he seeks to salvage his reform program in the face of data showing the world’s third-largest economy plunged back into recession last quarter. The dollar climbed, rising to its strongest level in more than seven years versus the yen. Australian shares erased their gain for the year, while nickel advanced asIndonesia reiterated a ban on ore exports. The greenback added 0.8 percent to 118.88 yen by 7:18 a.m. in London, after touching its highest level since Aug. 9, 2007. Australia’s S&P/ASX 200 Index (AS51) erased the year’s gain as miners and the local dollar tumbled after a gauge of China’s manufacturing hit a six-month low. Standard & Poor’s 500 Index futures lost 0.1 percent after the measure fell from a record, while contracts on the Euro Stoxx 50 Index (SX5E) were little changed. The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession while in the U.S., Federal Reserve policy makers discussed how to communicate the pace of interest-rate increases after they lift off zero. China’s flash purchasing managers’ index from HSBC Holdings Plc and Markit Economics fell to 50, the borderline between expansion and contraction. Iron ore slumped to a five-year low as China’s economy slows. “While the focus is on when the U.S. will raise rates, Japan continues to ease,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. More confirmation of the divergence in policy “pushed the yen to 118 against the dollar, and large cap stocks are likely to rise,” he said. Japan’s currency weakened as much as 0.9 percent to 118.98 per dollar today, and slipped to 149.14 per euro, the least since October 2008. The Topix index finished little changed with the Nikkei 225 Stock Average. Yields on Japan’s two-year notes neared negative levels. bloomberg