Government heeds Kuroda’s call for fiscal stimulus

The Bank of Japan has urged the government to address the mounting downside risks to economic activity with additional spending and the government has confirmed it will do so. Meanwhile, the available data suggest that the pre tax hike spending rush wasn’t as pronounced as in 1997 and 2014. That’s consistent with our view that consumption will fall less sharply in the fourth quarter than in the wake of previous tax hikes.