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Japan Lawmakers Fret Over Looming Tax Hike in Weak Economy

Updated on
  • Ruling party policy document showed increase would proceed
  • Gross domestic product among data that could sway decision
Pedestrians cross an intersection in the Shibuya district of Tokyo.

Pedestrians cross an intersection in the Shibuya district of Tokyo.

Photographer: Toru Hanai/Bloomberg

Signs of a weakening Japanese economy are fueling concerns among some ruling party lawmakers that the country cannot cope with an increase in an unpopular sales tax in October, after previous hikes hurt growth and derailed political careers.

Prime Minister Shinzo Abe has backtracked twice from a pledge to raise the tax to 10% from 8%, and there is speculation he could change his mind yet again ahead of an upper house election expected in July. Japan’s economic performance last quarter may affect his decision, with gross domestic product data on Monday forecast to show a contraction.