Policymakers should not overreact to any blip in the economy from an expected sales tax hike next year, a Bank of Japan board member said, suggesting that no additional monetary stimulus is required as long as the downturn is short-lived.
Prime Minister Shinzo Abe on Tuesday ordered his government to craft measures to bolster the economy to cushion the impact of an increase in the sales tax. He is likely to formally decide early next month on implementing the tax.
A recent slew of positive economic data has heightened views the economy can weather the pain from the tax hike, although some market players say the central bank may come under pressure to loosen monetary policy further to soften the blow
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