Whither Abenomics Akio Fujii January 30th, 2013
Abenomics• It’ the Economy Stupid!! until upper house election・ What is Abenomics? 1. Aggressive Monetary Easing 2. Fiscal Stimulus 3. Growth Strategy• Abenomics Bubble? Nikkei Index, Yen Biggest recovery since 2005 Election
Global Response• “Japan Step Out” Paul Krugman• “Right on Monetary Side, but…” Adam Posen• “The Wrong Growth Strategy for Japan” Martin Feldstein・Ｂｉｇ３ are nervous・Ｇｅｒｍａｎ are nervous Melkel・“We are still in a position where the yen is ahandicap,“ Ghosn
Upside Risk• Business and Consumer already feel better.• Virtuous cycle of reflation Asset prices → Sentiment → Real demand• Strong effect in F 2013 Fiscal Monetary Stimulus and rushing demandbefore the consumption tax hike• Global recovery US and China• Japan-China, Japan-Korea, cooling tension• Strong support for LDB in General Election → No PM Change since 2005
Downside Risk• Burst of Abenomics Bubble Disappointment on BOJ. Fiscal Concern.・Yen bounce back・Another political turmoil・Global slowdown(or recession?)・More tension on Japan-China, Japan-Korea・No structural reform
Single Biggest Threat“ the single, biggest threat to our nationalsecurity is our debt.” Mike Mullen, chairman ofthe Joint Chiefs of Staff→ The single, biggest threat to our nationalsecurity is our deflation?