People Are Worried That It Might Be 1997 All Over Again In Japan

Here’s an important chart we’ve seen in various permutations recently. This particular version comes from Commonwealth Bank of Australia, and it shows the trajectory of current Japanese consumption vs. Japanese consumption in 1997, the last time there was a hike in the consumption tax. As has been well discussed, despite the inclination and desire to stimulate the economy, Japan recently late its consumption tax jump from 5 to 8%.

So what happened last time? A big spike pre-jump (getting ahead of the hike) and then a violent tumbling in growth.

Watch this in the coming months.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at