BofAML's Devalier Says Japan Sales Tax Hike a Risky Move

The transcript discusses the repeated delays of a planned consumption tax hike in Japan, scheduled for October 2019. It explores the motivations behind the tax policy, including funding for education and child care, and the potential economic impacts, such as reduced consumption and deflation. The discussion also highlights the political and economic risks associated with the tax hike, noting that a significant portion of the public favors postponement. The tax issue has become a focal point in political strategy, offering the opposition a platform to campaign against it.

What was the scheduled date for the consumption tax hike in Japan?

• October 2019

• October 2020

• October 2021

• October 2018

What is one of the main purposes of the consumption tax hike?

• To lower inflation

• To increase exports

• To fund a fiscal stimulus program

• To reduce government debt

What is a potential negative impact of the tax hike on the economy?

• Decrease in consumption

• Increase in exports

• Rise in employment

• Growth in foreign investment

What was one of Prime Minister Abe's motivations for the tax hike?

• Beefing up education and child care support

• Increasing military spending

• Reducing public transportation costs

• Improving healthcare

How might the opposition use the tax hike issue in elections?

• By supporting the tax hike

• By ignoring the tax issue

• By proposing a higher tax rate

• By campaigning against the consumption tax