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Report: Bank of Japan policymaker flags recession risks as sales tax hike looms

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Report: Bank of Japan policymaker flags recession risks as sales tax hike looms

Japan could risk sliding into recession if the government were to push ahead with its planned sales tax hike in October, according to a Bank of Japan board member, Reuters reported May 22.

Japan is set to raise its sales tax to 10% from 8% in October, having postponed the implementation twice since the last increase in 2014.

Yutaka Harada, seen as a vocal advocate of aggressive monetary easing, told a news conference that proceeding with the hike at a time "when the economy is at such a critical juncture" could pose a threat to Japan's growth, according to the report.

He added that the central bank must "strengthen monetary easing without delay" if a deterioration in Japan's economy makes it difficult for policymakers to achieve the inflation target.

Harada suggested easing measures could come in the form of lower interest rates, accelerated money printing or an ultra-loose policy for an extended period. He also dismissed the idea of unlimited printing of money to spur growth.