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Abe Sales Tax Backfiring With More Debt Not Less: Japan Credit

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What started as a plan to reduce Japan’s debt is turning into a reason to issue more bonds.

Prime Minister Shinzo Abe’s administration implemented a higher sales tax in April to boost revenue as government liabilities ballooned to 1 quadrillion yen ($8.5 trillion), more than double the nation’s yearly economic output. Consumption plunged and the economy fell into a recession, prompting companies including Mirae Asset Global Investments Co. and High Frequency Economics to predict even more sovereign debt sales to revive growth.