Kuroda has previously said Japan could likely withstand any hit to consumer demand from raising taxes, but the effect of any US debt default is raising concerns internationally.
International Monetary Fund chief Christine Lagarde, who applauded Japan’s sales tax hike, warned Thursday that US lawmakers’ failure to raise the debt ceiling could wreak havoc on the global economy.
“The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy,” she said.
Japanese Finance Minister Taro Aso echoed those concerns Friday, urging Washington to reach an agreement before the damage spreads well beyond US borders.
“My feeling is the debt limit will have an internationally significant impact. Unless it is resolved swiftly, we will see various consequences,” Aso told reporters in Tokyo.
The BoJ’s decision Friday now puts the focus back the US Federal Reserve and the timeline for a widely expected plan to start tapering its monetary easing scheme.
“The chances of the US starting (to wind down its stimulus) this year continue to dwindle,” National Australia Bank (NAB) said in a note.
“There are only two more (Fed policy) meetings this year, and with October 30 now improbable, a lot would have to go right in the US economy over the next two months for the Fed to start tapering (at its following meeting on) December 18.”
On currency markets the dollar fell to 97.17 yen in afternoon trade, compared with 97.27 yen in New York on Thursday.
