Financial Times says the BOJ will face pressure to ease monetary policy
FT with a piece looking at the impact of the sales tax hike in Japan
(Tax was raised on octo October 1)
Financial Times is gated, but if you can access, article link here
- figures from Nowcast, which uses supermarket scanners to compile real-time data on consumption and inflation, sales fell 10-20 per cent during the first week of October compared with the same period the previous year.
- Spending patterns ahead of the increase had suggested that consumers were not behaving as they did ahead of the last tax rise in 2014, when a post-increase slowdown led to recession.
The article concludes with an outlook for the Bank of Japan:
- BoJ has promised a review at its meeting on October 31
- Signs of slowing consumption will strengthen the case for monetary easing
- but … the BoJ may fear that deeper negative interest rates could deal a further blow to consumer confidence, encouraging it to stay on hold unless there is a sharp rise in the yen.
Reprinted from Forexlive，the copyright all reserved by the original author.
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