BOJ Under Pressure To Make Good Abe’s Disappointment

A lack of detail from Japan’s Prime Minister Shinzo Abe about how the government will buffer the economy from a controversial rise in the sales tax adds pressure on the Bank of Japan to step up its monetary stimulus, analysts say.

Abe, who implemented radical economic policies – dubbed Abenomics – to revive the world’s third-biggest economy, said on Tuesday the country’s sales tax would rise to 8 percent from 5 next year as planned. The hike is seen as necessary to help ease Japan’s heavy debt load.

But an announcement on a stimulus package to offset the impact of the tax hike fell short of expectations. Instead of unveiling a cut in corporate tax, as anticipated by analysts, Abe said he had asked ruling parties to start a debate on corporate tax cuts and that a 5 trillion yen ($51 billion) stimulus package would be compiled in December.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu