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Japan Tries to Learn Lessons From Its 2014 Sales Tax Blow

  • Rush demand looks weaker so far but economy in vulnerable spot
  • Economists divided on likely severity of consumption shock
4K LCD televisions are displayed at a Bic Camera store in Tokyo on Sept. 5, 2019.
4K LCD televisions are displayed at a Bic Camera store in Tokyo on Sept. 5, 2019.Photographer: Toru Hanai/Bloomberg

Japan hopes it has finally learned its lessons from the painful sales tax shocks of the past.

Overly optimistic views of how the economy would ride out the sales tax in 2014 left red faces in government offices and the Bank of Japan when the economy shrank 7.3% in its aftermath. This time round, Prime Minister Shinzo Abe’s administration has bent over backwards to ensure that the tax hike doesn’t upend the economy at a highly vulnerable time.