OECD backs Japan tax hike, more easy money

The Japanese economy contracted 1.8% quarter-on-quarter in the three months to June – or 7.1% on an annualised basis following the tax hike from 5% to 8% on April 1, 2014, casting doubts on whether the government will to raise it further to 10% next year - EPA Photo.

TOKYO: Japan should raise sales taxes again next year despite wobbles in the economy caused by the first rise, and the central bank should cushion the blow with more easy money, the OECD said Monday.

The Bank of Japan must do more "beyond 2015" to support the world's number three economy, said Rintaro Tamaki, deputy secretary general of the Organisation for Economic Co-operation and Development (OECD).