Bank of Japan Member Tells Lawmakers Not to Exaggerate Impact of Sales Tax Hike

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

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza