Fujii Warns Sales Tax Bill Failure Would Spark JGB Sell-Off
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Former Japanese Finance Minister Hirohisa Fujii said failure to pass legislation to raise the consumption tax will spark ratings agency downgrades and prompt banks to sell off their government bond holdings.
Failure to pass the bill “will spark a major move in hot money,” Fujii, a senior ruling party lawmaker, said in an interview yesterday at his Tokyo office. “There will be a sell-off in government bonds and interest rates will rise. Financial institutions who hold bonds will suffer losses, so they will sell them off quickly.”