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Japan more resilient to sales tax hike pain-BOJ's Sato
March 19, 2014 / 1:50 PM / in 4 years

Japan more resilient to sales tax hike pain-BOJ's Sato

NEW YORK, March 19 (Reuters) - Bank of Japan board member Takehiro Sato said on Wednesday the country’s economy is more resilient to rises in the consumption tax than when it was previously hiked in 1997, suggesting that he saw no immediate need to expand monetary stimulus further.

He also called on the government to pursue fiscal consolidation to avoid long-term interest rates from spiking, warning that there are limits to how much central banks can keep unwelcome rises in bond yields in check.

“Japan’s economy is steadily pursuing the path of achieving our 2 percent price target ... Japan’s economy is entirely different from than in 1997, when the sales tax was raised to 5 percent,” Sato said in a speech at the Japan Society, adding that he also saw “a lot of encouraging signs” in wages. (Reporting by Leika Kihara; Editing by Chizu Nomiyama)

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