Stock market cheers policy moves

The Nikkei has soared following the Bank of Japan’s decision to step up the pace of monetary easing. The yen has also weakened, which is good news for exporters. Less widely noticed is that, after a period of weakness after the tax hike, the recent data have generally been positive and point to a revival in demand. The upshot is that despite some question marks about the impact on the economy, we think the government will ultimately decide to raise the consumption tax next October as currently scheduled.