World Economy

Japan Tax-Hike Harmful

Japan  Tax-Hike HarmfulJapan  Tax-Hike Harmful

Bank of Japan Governor Haruhiko Kuroda on Wednesday acknowledged that last year’s sales tax hike imposed bigger damage on the economy and prices than initially expected, Reuters reported. “It’s true the effect of the tax hike was bigger than expected,” Kuroda told parliament. “But economic growth is turning positive and the pressure on prices will disappear from April,” he said, adding that the economy is sustaining positive momentum spurred by the central bank’s massive stimulus program adopted in 2013. Kuroda has batted away any suggestions the BOJ faces constraints in soaking up bonds, even as traders say falling liquidity is driving up volatility in the world’s second-biggest sovereign debt market. With inflation stalling, the BOJ on April 30 pushed back its time frame for reaching its 2% target, a goal Kuroda sought to reach in about two years when he launched the unprecedented asset-purchasing program in April 2013.