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World|business|May 29, 2014 / 09:17 AM
Japan’s sales-tax hike turns shoppers away

AKIPRESS.COM - 101712255-481738019.530x298 Japan's retail sales tumbled 4.4 percent on year in April as a rise in the country's consumption tax weighed on spending, data on Thursday showed.

The number compared with analyst expectations in a Reuters poll for a fall of 3.3 percent and marked the fastest annual decline since the March 2011 earthquake and tsunami.

Japan's sales tax was raised to 8 percent from 5 percent at the start of April to help alleviate the country's huge debt burden.

"The worsening retail sales data in April reflect the impact of the VAT hike," analysts at Mizuho Corporate Bank said in a note. "This may reinforce bets for further BoJ [Bank of Japan] easing."

The hike is expected to weigh on economic activity in the second quarter of the year. There has also been some talk about whether the Bank of Japan would ramp up its monetary stimulus in the months ahead to provide extra support for the economy.

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