IMF URGES JAPAN TO KEEP RAISING RATES, AVOID REDUCING SALES TAX

The International Monetary Fund urged Japan to keep raising interest rates and avoid loosening fiscal policy further, warning that trimming the consumption tax would erode its capacity to respond to future economic shocks.

The recommendation came as dovish Prime Minister Sanae Takaichi's landslide election win heightens market attention to whether she will push back against further rate hikes by the central bank. It also follows Takaichi's pledge to suspend by two years an 8% consumption tax on food sales.

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