Should investors be concerned about Abe's tax plans?

JAPAN

Hardeep Tawakley analyses the impact of Prime Minister Abe's latest tax plans on the consumer sector and the country's recovery prospects.

Japanese Prime Minister Shinzo Abe’s plans to pull the country out of its slump were dealt a blow last week when the country reported weaker-than-expected GDP growth of 2.6%. This, combined with a planned doubling of its sales tax from 5% to 10% in 2014, has made it difficult for investors to have clear views on prospects for the country, particularly consumer-facing sectors. The GDP figures were an unwelcome wake-up call. Previously, Abe’s policies of fiscal and monetary stimulus as well as structural reforms had helped boost equity markets and weaken the yen. The Topix and Nikkei ro...