Japan’s Next Tax Hike To Be Closely Examined

rime Minister Shinzo Abe is expected to examine economic conditions “more carefully” when deciding whether to go ahead with the next scheduled consumption tax hike to 10 percent in October 2015, an economic minister said Sunday.

Abe “will, I think, examine various indicators more carefully than the time he decided to raise the rate to 8 percent,” economic and fiscal policy minister Akira Amari said on a TV talk show.

Amid concern that the 3 percentage-point tax increase that took effect April 1 will dent consumer sentiment and hurt economic growth, Abe shopped Saturday at a Tokyo department store to experience firsthand the effects of the tax hike and to encourage spending.

As to whether the government will compile an extra budget for fiscal 2014, which also began April 1, to help keep the economy on track after the tax hike, Amari said the economy’s resilience will need to be seen in the July-September period.

via Mainichi

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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