Prime Minister Shinzo Abe is inclined to delay the increase of the consumption tax rate currently scheduled to take effect in April 2014, according to a number of people who have talked with him recently.
Volatile stock market movements and foreign exchange fluctuations in recent weeks seem to have led him to fear that if the tax rate is raised as scheduled, the nation's economy will be adversely affected, despite showing signs of recovery after he took office last December.
He has been quoted by some as saying that he was not thinking of putting off the consumption tax hike for two or three years but that a delay of six months may be worth considering. It is feared, however, that any delay, even for a short time, could lead the market to become suspicious of the government's efforts to restore the nation's fiscal health, which in turn could create the worst scenario of a sharp fall in the value of national bonds and a steep rise in long-term interest rates.