According to the latest Reuters poll published on Wednesday, the economists remain divided on when the Bank of Japan (BoJ) will initiate its tapering plans while they believe the Japanese government needs to promote more corporate investment and innovation.
“Japan should also proceed with a sales tax increase next year as planned, analysts said, even though the economy appears to be in a rough patch after contracting in the first quarter.
Asked what Japan needs the most among those policy goals, 14 economists selected “investment and innovation”, 14 also picked “accept more foreign workers” and ten said to raise the sales tax next October.
Eight chose “to promote more female and elderly workers”, the June 5-12 poll showed.
Asked about the best target for Japan’s consumer inflation rate, 17 of 38 economists said about 1 percent and 16 said around 2 percent, the poll found.
Economists project the core consumer price index, which includes oil products but excludes fresh food, will rise 0.9 percent this fiscal year, which started in April.
That is seen ticking up only slightly to 1.0 percent for fiscal 2019, excluding the impact from the planned sales tax hike in October 2019. The 2019 forecast was only fractionally higher than the last survey in May.
Asked when the BOJ is likely to start unwinding its stimulus policy, 17 economists forecast it will be sometime in 2019 and 15 said it would be in 2020 or later, roughly the same as in the previous poll.
Only four expected the central bank would begin tapering this year.”
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