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Japan: Delay in sales tax hike Yen negative - BTMU

FXStreet (Bali) - According to Bank of Tokyo-Mitsubishi UFJ, a delay in the sales tax hike, as rumored by Sankei news today, may increase downside risks for the yen.

Key Quotes

"We have been assuming that the sales tax hike will be implemented as planned but if the sales tax hike is delayed it may increase downside risks for the yen by raising concerns over the government’s desire to maintain long-term fiscal sustainability while the BoJ is also aggressively purchasing government debt."

"The delay of the sales tax hike would also likely prove more supportive for the economic growth outlook in Japan in the near-term boosting risk seeking behaviour amongst Japanese investors encouraging yen weakening capital outflows."

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