Thu, Sep 19, 2013 - Page 9 News List

Japan’s economic recovery might be put at risk by tax increases

Japan’s prime minister is popular, but he may have to trade in his popularity for an unpopular policy — and that policy might not be the right one anyway

By Hiroko Tabuchi  /  NY Times News Service, TOKYO

Still, Japan has something now that it did not have then, said Nicholas Smith, a strategist at CLSA Asia-Pacific Markets: An aggressive central bank willing to do “whatever it takes” to prop up the economy should a higher sales tax start taking its toll. The aggressive action of Bank of Japan Governor Haruhiko Kuroda has helped the country’s current expansion.

A year ago, Smith wrote in a note published on Friday last week, he was concerned that a consumption tax increase would kill growth.

“Abenomics has changed that picture entirely,” he said.

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