Japanese PM Abe has a fair bit on his plate right now and Friday’s move by the BOJ may well be signalling more signs of desparation that Abenomics, almost two years old now, is struggling to do it’s job. Well, apart from sending the yen into a tail spin of course.
Fears that his popularity has peaked could encourage Abe to combine a postponement of the sales tax rise with a snap election late this year or early next, although no lower house poll need be held until late 2016. But only this week Abe ruled out such a move .Several experts have also dismissed the early election scenario, but some political insiders said it couldn’t be ruled out.
Abe is expected to wait for final Q3 GDP data on due out on Dec. 8, before deciding on the tax rise, but preliminary data will be released in mid-November and the discussion panel will sit from 4 Nov
Sales tax rises have been something of a poisoned chalice for previous Japanese PM’s, and Abe is only too aware of the delicate balance he has to find
This Reuters article today looks at his dilemma in a little more detail
Abe – between a rock and a hard place on sales tax
