Lagarde hails Japan sales tax move

IMF managing director Christine Lagarde has praised Japan’s move to raise its sales tax in order to curb the swollen national debt.

She made the comments today in Tokyo, where she is meeting with prime minister Yoshihiko Noda, other ministers and business leaders.

Ms Lagarde said raising the consumption tax has worked in other countries to reduce debt.

Japan is about to pass legislation to double its sales tax to 10% by 2015.

Japan has one of the largest public debt burdens in the developed world, but the tax proposal has proven highly unpopular and has split the ruling party.

Ms Lagarde reiterated the IMF view that the yen is “moderately overvalued”.

A strong yen hurts exports, and businesses are complaining it is too high.