• Close aide to Prime Minister Shinzo Abe, Etsuro Honda, said in a TV interview on Sunday that “Now is a bad time to raise the consumption tax as we are just starting to get ourselves out of deflation,”
  • This is not a new view from Honda
  • Another key adviser to Abe, Yale University professor Koichi Hamada, agrees with Honda
  • Today’s trade figures showed imports rising more rapidly than exports, the trade deficit thus increasing again (the third biggest on record)
  • We get surveys of corporate and household sentiment this week and next
  • Those arguing for the sales tax hike say it is necessary to maintain confidence in Japan’s fiscal positions and bond market
  • The current plan is for the sales tax to jump to 8% from the current 5% in April 2014 and then to 10% in October 2015

The debate continues