It's different this time. The four most dangerous words in markets, according to former U.S. Treasury Secretary Larry Summers.
With the consumption tax set to be raised for the first time since 1997, Prime Minister Shinzo Abe's political future rides on a different outcome than last time — when the economy slid into a recession and the prime minister lost his job. To avoid a spending slump, Abe is poised to unveil a stimulus plan to counter the 3 percentage point bump in the sales levy to 8 percent.
"Abe must know that breaking the economy would mean the end of 'Abenomics,' " said Masayuki Kichikawa, chief Japan economist at Bank of America Corp. in Tokyo, referring to the initiative to end deflation after two decades of stagnation. "The miserable failure of the 1997 sales tax rise is stuck in the mind of Japanese politicians."