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Abenomics is based on the untested formula of monetary easing, fiscal stimulus and structural reforms. In early 2013, Abe promised to increase public spending across Japanese infrastructure and renewable energy, committing $116 billion to reignite Japan's struggling economy. This short-term stimulus aims to boost GDP and job creation by building business confidence and inspiring private investment.. A new inflation target of 2%, conceived by Abe and enacted by the Bank of Japan, prompted a massive quantitative easing programme worth $1.4 trillion. This stimulus measure was introduced with the aim of buying up government debt in a battle to counter deflation. Monetary easing has resulted in a weakening of the yen to the point of a rise in inflation. A devalued yen is a boon to Japanese exports, as manufacturers can sell more goods to a more receptive foreign market. As a result, the Nikkei stock index has rallied by gaining more than 40%, driving stock price increases and, consequently, invigorating business growth. Japan's lower currency has dipped against the US dollar, with forecasts suggesting wages, prices, employment and business investment will all rise.. The third, and potentially most critical, strategy of Abenomics is the unrolling of proposed structural reforms. Abe's move to revamp Japan's healthcare field, energy policies and IT industry is an overhaul in key industry sectors to maintain economic growth beyond short-lived QE lifts and fiscal spending. To what extent does Japan's financial stability hinge on these structural reforms? Abe's decision to join negotiations on the Trans-Pacific Partnership (TPP), a regional free trade agreement, may be crucial to elevating the ratio of Japan's international trade from 20% to 70%, under the free trade agreements.. A series of initiatives to lay the groundwork for future growth includes schemes to help Japanese engineering companies to sell more nuclear power plants and high-speed trains abroad as well as a domestic-based proposal to increase female numbers in the workforce.. For Abenomics to succeed, Japanese households will need to reverse the recent deflationary trend of excess saving and encourage consumers to spend more. In the infographic, Mads Koefed, Head of Macro Strategy at Saxo Bank, suggests that 'the new experiment in Japan has boosted consumer sentiment and that has now resulted in consumers spending more of their money'. Will a more optimistic outlook translate into a revival for the world's third largest economy? It is premature to gauge the success of Abenomics at this stage, and there are question marks over the proposed structural reforms. Fears remain over Japan's alarming national debt, and an eventual rise in interest rates would add a greater burden on the government, undercutting reform measures. Will an offshoot of Abe's remedies to Japan's macroeconomic problems inflict a greater debt load? Further problems await Japan: the unsustainable ratio of the elderly to the working population, fallout should fiscal stimulus fail, and snowballing costs for imports. This symptom of a weakened yen is exemplified by Japan's post-Fukushima nuclear programme, which relies heavily on imports. Although Japan's aggressive monetary easing programme has helped the yen devalue against the US dollar, Abe's monetary easing plans threaten to distort the financial markets. The Bank of Japan's purchases of financial assets have created significant uncertainty in the bond markets, with Japan's 10-year government bond unexpectedly rising to a record high in May 2013.. Abe's structural reforms carry with them several risks. The domestic agriculture sector could suffer from increased marketplace competition should tariffs on imports be removed. Any agreements with the TPP would mean greater dependency on government support among Japanese farmers, adding a further load on finances...