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Forex pairs in this Article » USD/JPY (Barcelona) - Following an overall series of upbeat reads on the important Tankan indicators, Japan is inching closer to confirm the planned sales tax hike from 5% to 8%, due to be officially implemented in April 2014.

As Eamonn Sheridan from Forexlive notes: "If there was any doubt that Japanese PM Abe was going to give the go ahead for the April 2014 sales tax hike and the subsequent economic stimulus package these results should lay that to rest. The ‘headline’ diffusion index and outlook for large manufacturers continue to show improvement, that will be enough for Abe."

On a more pessimistic note for the Japanese economy, which is likely to cause some preoccupation among Japanese leaders, is the fact that overall household spending for August in the country declined by -1.6% y/y vs expected +0.2%, a worrying sign as it suggests reduced prospects on consumer spending. Should the implementation of a sales tax next year encourages this trend to accelerate, it may hinder the process of desired inflationary pressures in the country.
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