Expert J.J. Fernández Figares at Link Securities explains that “the tax increase over sales from last April has damaged the consumption and the business investment to the point of falling into recession.” Thus, all the stimuli measures carried out by the Bank of Japan as well as Mr Abe’s initiatives have become a dead letter.
The fall into recession could also lead to a delay in the next tax increase over sales, which would go up to 10% from the current 8%.
The Japan GDP data raises concerns about the “mounting national debt, given further stimulus seen from a couple of weeks back and continued speculation of an early snap election,” said Tristan K’Nell, head of equities at Quay Equities.
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