Tuesday, June 21, 2016

Japan: "Abenomics as epic fantasy"

I put 'Japan' in the headline so sleepy readers wouldn't think we were talking about Abe in the Garment District.
(some day I'll have to tell that story)

From FT Alphaville:
Once upon a time (well, 2012) in a realm of falling or flat prices and stalling economic growth, one man had the courage to face reality with only three arrows — of monetary stimulus, fiscal stimulus and structural economic reform — and a popular mandate to his name.
That name was Abe and he…

No. Let’s just cut to Morgan Stanley on the ‘tragedy’ of Abenomics so far, and its potential ‘rebirth’:
This *ahem* stuff follows the IMF just saying “Japan must redouble economic stimulus or admit that it will take years to reach inflation of 2 per cent.”
From the FT:

Prime minister Shinzo Abe needs to “reload” his Abenomics programme with an incomes policy to drive up wages, on top of monetary and fiscal stimulus, the IMF said after its annual mission to Tokyo.

The fund’s comments show that even with negative interest rates and the postponement of a planned rise in consumption tax, it believes Japan is still not on course to escape from its decades of on-and-off deflation....

Tokyo, we may have a problem.