The Wall Street Journal reports that “people familiar with the bank’s thinking” warn that if markets get jittery because of a change in plans for the sales tax hike, the government shouldn’t rely on the central bank to step in.
- The BOJ argues that the planned tax increases won’t derail Japan’s budding economic recovery, They are instead concerned that if investors lose confidence in government efforts to put its fiscal house in order, it could cause a jump in long-term interest rates:
“There would be almost nothing the central bank could do” about such a sharp jump in bond yields
Debate over the sales tax hike has really ramped up in the past 6 weeks, with aides to PM Abe arguing for a change to pans for the sales tax increase
BOJ Won’t Rescue Government From Sales-Tax Misstep
(The Wall Street Journal is often gated, so if you’re unable to access the article try a search of Google news using the headline)
