IMF mission chief for Japan Paul Cashin said BoJ should maintain its massive stimulus program as “the so-called side-effects are not large enough to outweigh the benefits at present:. He added “the only game in town is achieving the target” of 2% inflation. He warned that “Tightening now is not going to help you get there. They’re very much committed to reaching the target, and we think that’s the right thing to do.”
On to the planned sale tax hike, he said “we’re not against putting them in and some of the revenue can be used for (tax breaks) but only on a temporary, time-bound basis.” He emphasized “equally important is clear communication on what these measures are, when they will begin and what particular tax and subsidies will be involved … because people plan ahead and won’t wait until October to make consumption decisions.”
