After weeks of leaks and speculation, Prime Minister Shinzo Abe announced Tuesday he will dissolve the Lower House on Friday for a snap election next month, after his administration decided to delay a second consumption tax hike planned for next October.
At a news conference in the evening, Abe vowed that the tax hike to 10 percent from 8 percent will not be postponed again. He pledged to eliminate a clause in the current special tax law that allows the government to delay tax increases if economic conditions suffer a sharp deterioration.
Delaying the tax hike risks fueling investor concern over Japan's long-term solvency, given the nation's hefty and snowballing public debt.