After weeks of heated debate over whether to press ahead with a controversial sales-tax increase, Japanese Prime Minister Shinzo Abe appears poised to rule in favor of the move, which is seen as crucial to curbing Japan's soaring national debt.
The consumption tax is due to rise from 5 percent to 8 percent next April and Abe is widely tipped to approve the hike on October 1, when his decision on the matter is due.
(Read more: Japan's consumer inflation rises to a 5-year high)
"A rise in the sales tax is a done deal," said Bank of Singapore Chief Economist Richard Jerram. "[Policymakers] have more or less said they will go ahead with the rise and a stimulus package to buffer the impact."
According to recent media reports, the government could unveil an economic stimulus package worth about 5 trillion yen ($50 billion) next week with possible corporate tax cuts to offset any negative impact on the economy from a sales-tax hike.
Still, Japanese Finance Minister Taro Aso said he was not considering a cut in Japan's corporate tax rate for now, Reuters reported on Friday.