BOJ’s Harada Breaks Consensus to Say Tax Hike Risks a Recession

Japan’s economy is at risk of sliding into a recession after a demand-sapping sales tax hike planned later this year, despite a raft of government measures to limit its impact, according to Bank of Japan board member Yutaka Harada.

Breaking from the BOJ’s usual downplaying of the likely effects of the tax hike, Harada reminded business leaders in Yamanashi, Japan, that economists underestimated the impact and duration of the negative hit from the last increase in 2014. The central bank ramped up its stimulus six months after that tax hike, which hit consumption hard.

Harada clarified later in the day ...