Japan’s economy contracted more than expected at an 1.9 annual rate last quarter.
Japan's economy shrank more than initially reported in the third quarter on declines in business investment, data showed on Monday, surprising markets and backing premier Shinzo Abe's recent decision to delay a second sales tax hike.
And it shows the limitations of monetary stimulus measures. Japan has been embarked on a variation of America’s quantitative easing experiment, but the results thus far have been disappointing.
In part that’s because Japan raised its sales tax from 5 percent to 8 percent last April. The country finally just postponed another scheduled tax increase for next year from 8% to 10%.
The hit from an April sales tax hike turned out to be bigger than expected, the revised gross domestic product data indicated, underscoring the challenges Abe and the Bank of Japan face in pulling the world's third-largest economy sustainably out of deflation.
Like here at home Japan’s politicians are trying to ignite inflation hoping that rising prices will scare the Japanese into buying stuff to get the economy going again.
They have no other plan.
Think about THAT.
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