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Kozo Yamamoto, Japanese senior ruling party lawmaker with close ties to PM Shinzo Abe and one of the architects of the premier’s stimulus policies, was reported by Reuters as saying that the government will likely proceed with a scheduled sales tax hike in October.

Key Quotes:

“It was a mistake,” Yamamoto said of the BOJ’s decision in 2016 to change its policy target to interest rates instead of the pace of money printing, adding that rate cuts are not as effective a tool as large-scale asset purchases.

“The BOJ ought to buy government bonds more aggressively,” but doing so would be difficult under the current framework.

“The prime minister told me while I may be theoretically right, it was politically difficult” to put off the hike.

“The government should increase spending if the tax hike hurts the economy too much.”