The International Monetary Fund (IMF) has warned that Japan should continue tightening monetary policy and avoid lowering the consumption tax.
The IMF said in a statement on Tuesday after concluding regular consultations with Japanese authorities that the Bank of Japan is "appropriately withdrawing monetary accommodation" and should continue raising interest rates gradually so the policy rate could reach a neutral level, neither stimulating nor dampening the economy, in 2027.
The IMF said the Japanese central bank's "continued independence and credibility" will help keep inflation expectations well anchored, warning the government against meddling too much in monetary policy.
The latest warning came as Japanese Prime Minister Sanae Takaichi aims to suspend the eight percent tax on food and beverages for two years following the general election earlier this month, framing the move as necessary support for households.
"Support for vulnerable households and firms most affected by rising costs of living or large external shocks should be budget neutral, temporary, and targeted to these groups," the IMF said.
The IMF cautioned that reducing Japan's consumption tax would "erode fiscal space and add to fiscal risks," and that an "untargeted measure" to deal with the rising cost of living could further deteriorate the country's fiscal health.
The IMF warned that Japan's public debt, the highest among major economies, is projected to grow over the long term, although spending restraints and stronger tax collection have had positive effects on its post-pandemic fiscal consolidation efforts.
The Washington-headquartered organization analyzed multiple dimensions of the Japanese economy, not only its fiscal conditions, noting that risks to the economic outlook are "tilted to the downside." "Domestically, the main risk remains weak consumption if real wage growth fails to turn positive," it said.
IMF urges Japan to keep rate hikes, avoid consumption tax cuts
The 24th Chinese Peacekeeping Contingent to the United Nations Interim Force in Lebanon (UNIFIL) held a solemn flag-raising ceremony in their barracks on Tuesday, the first day of the 2026 Chinese New Year, conveying warm wishes to fellow Chinese people and hope for regional peace.
In the early morning of Tuesday, the barracks of the Chinese peacekeeping forces were filled with a festive atmosphere, with red lanterns and couplets adorning the grounds, contrasting beautifully with the blue helmets symbolizing the peacekeeping mission.
As the anthem of the United Nations, the national anthem of Lebanon, and the national anthem of China were played in succession, the UN flag, the Lebanese national flag, and the Chinese national flag were slowly hoisted, with all officers and soldiers facing the flags and solemnly saluting.
The 24th Chinese peacekeeping contingent consists of a multi-functional engineering unit, a construction engineering unit, and a medical unit.
Since its deployment in Lebanon in December last year, the Chinese peacekeeping force has been working on the front lines of mine clearance and explosive ordnance disposal, engineering construction, and medical assistance, safeguarding region peace and stability with its professionalism and dedication, and winning high recognition from the United Nations and the Lebanese people.
Speaking after the flag-raising ceremony, Chinese peacekeeper Liu Jia reflected on the significance of celebrating the Spring Festival while on mission.
"On the first day of the Chinese New Year, we organized a flag-raising ceremony in a foreign land. We feel both deeply honored by our mission and are keenly aware of the responsibility on our shoulders. Although we couldn't have a reunion with our families back at home during the Spring Festival, safeguarding regional peace and bringing glory to our motherland makes this Chinese New Year holiday the most meaningful for us. In the new year, we will firmly keep in mind our mission, live up to our responsibilities, and successfully fulfill all tasks. We wish our motherland prosperity and strength, and we wish all fellow Chinese people a happy Spring Festival," said Liu.
Over the past 19 years, Chinese peacekeeping contingent to the UNIFIL has cleared about 2 million square meters of suspected minefields, discovered and destroyed more than 18,000 landmines and unexplored ordnance, repaired 320 kilometers of roads, and provided medical assistance to more than 90,000 people.
Chinese peacekeepers in Lebanon mark Spring Festival with flag-raising ceremony
