The latest data suggest that the tax hike has not had a lasting impact on Japan’s economy. Business surveys have mostly rebounded, spending has too, and manufacturing output has stabilised. What’s more, the labour market is as tight as it has been in many years. Against this positive economic backdrop, an increasing number of commentators now expect the BoJ to end monetary stimulus early next year. We think this is premature, as a range of indicators still indicate that inflation will fall short of the central bank’s 2% target in coming months and inflation expectations have started to moderate.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services