Japan Tax Hike Still Causing Issues for Economy

Japan’s retail sales rose 1.2 percent on year in August, above expectations for a 0.3 percent rise in a Reuters poll and up from a 0.6 percent rise in July, data showed on Tuesday.

However, household spending fell 4.7 percent on year, worse than expectations for a 3.8 percent decline, while industrial production fell 1.5 percent on month, below expectations for a 0.2 percent rise.

The data paint a mixed picture of Japan’s economy and suggest that it has not fully adjusted to the April sales tax hike.  “Obviously we’re still dealing with the effects of the tax [hike] in April. The third arrow was going to be difficult we know,” said Martin Schulz, managing director of international equities at PNC Capital Advisors.


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