politics

Abe's biggest test on economy still to come, analysts say

21 Comments
By ELAINE KURTENBACH

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

©2021 GPlusMedia Inc.

21 Comments
Login to comment

Getting the economy rumbling again will require consumers to spend more.

Raising the inflation rate is one thing, but when income doesnt keep pace people here save and not spend.

Increased costs, increased taxes, increased utilities, and lord knows what else, and he wants people to spend more? I would prefer to spend my money on what I want to buy and not on propping up Abe.

9 ( +10 / -1 )

If people spend, then corporations will pay higher wages

Japanese Logic (?)

4 ( +5 / -1 )

In one quote Abe said,"if prices go up, consumers will buy, knowing that in the future the prices will be higher than now." What kind of logic is that. i don't think people are sitting at home waiting for everything to get cheaper! Only a small percentage of people are sitting on lots of money, and there is nothing they can do to get them to spend it. But almost daily the news shows giddy people watching the Nikkei climb, and they magically expect that their next pay packet will double in size all thanks to Mr. Abe! Good luck with that. and don't forget to thank him when due do his printing of money and inflation hits the magic 2%, then the consumption tax increase kicks in.

4 ( +5 / -1 )

i dont think anyone can complain much about currency manipulation as yen has been over valued all these years and it okay to under value it, but the interesting question is by how much. Yen has been undervalued by 20-25% already since december election. What level can be treated as permissible and what cannot??

-2 ( +1 / -3 )

Inflation is a tax. When PM Hashimoto's administration raised the consumption tax from 3% to 5% in 1997, Japan went into recession. "Abenomics" will be a disaster. A county with a declining and aging population cannot "grow." It's. It's impossible. Politicians are scum. They're screwing Japan in exchange for short-term gains this year for the old boy network. Young people are complacent. Here, play with your smartphone and watch this silly TV show.

12 ( +14 / -2 )

Given that most pay levels are set only once a year, and that time has passed.... surely any gains from this in terms of money in the pocket is going to happen at least a year later if not more... And they're talking about it happening as if it's next week....

I'm not quite sure I follow the logic to some of this. With inflation, the price of things rises. I've just been told that my electricity bill is going up, my water bill is going up and anyone with gas has, I'm sure, received the same information. With all of this, what exactly is going to make me want to spend more??? My cost of living is going up and I'm sure my pay wont be keeping pace with it. Not to mention the increase of sales tax just on the horizon.

So what is supposed to be making me feel warm and fuzzy and causing me to open my wallet and spend????

8 ( +8 / -0 )

The reforms are “full of complicated issues,” said Adachi.

The translation might be literally correct but not the Japanese meaning, which is "The reforms are impossible".

3 ( +3 / -0 )

Abe= billionaire, hopeless PM.

40% and growing, workers are on crappy temporary contracts. They will not spend. If there is inflation plus the consumption tax increase from 5% to 7% to 10%, people will save even more if they can. They will need more money in the future just to fund these increases. The future in Japan is just so bleak. The economy is totally unfixable.

2 ( +4 / -2 )

These economically illiterate journalists need to pay more attention to the financial markets and less attention to the blustering lies of politicians.

To wit:

Yesterday, Japan's Bond market triggered an automatic "safety valve" and had to SHUT DOWN because there was a "selling frenzy." Seems that those in the know were dumping J-bonds faster than the system would allow it.

Source:

http://www.zerohedge.com/news/2013-04-05/deutsche-bank-central-bank-intervention-we-are-flying-blind

0 ( +3 / -3 )

Thanks gaijininfo mate, interesting! Well, if I had big money to invest, Japan and Japanese bonds would be the last place I would want to invest in. Japan is now just sell sell sell. Hopeless basketcase.

0 ( +2 / -2 )

Abe= billionaire, hopeless PM.

Where in the world did this come from? Abe is hardly a billionaire. It would be smarter to try to find legitimate reasons for not liking his policies than to create a myth or lie about the man.

0 ( +0 / -0 )

Umbrella - The future in Japan is just so bleak. The economy is totally unfixable.

Well, you are half right. Japan's future is bleak under the current governmental economic policies, but is fixable! It is just that, these blockheads want to use 50 year old policies and culture to rebuild an evolved economy, which is not gonna work. Japan's workforce has decreased by nearly 20% in the last 30 years and it is estimated that nearly 50% of the population will be over 50 in the next ten years. This is where 'Abenomics' will fail. There will be nobody to work and those that are working will be paying to support the previous generations. Abenomics is only gonna make the hole deeper by increasing debt and pushing up domestic prices. They need to abolish sales tax altogether, for the time being, and increase import taxes to extreme amounts to promote Japanese made products. at least that will start to keep the money in Japan. Then they need to stop pissing off the rest of Asia and get their trading partners back to get their export market back into gear. Japan's bubble economy was built on exports, but with all the crap going on between China, Sth Korea and Russia their export market has stalled along with the economy. They then need to seriously look at importing laborers and paying them a decent salary. They should also exempt foreigners from paying into their failed pension system as an incentive to get people to work in Japan.

1 ( +3 / -2 )

I can't see how the government getting itself into ever more debt is going to make ordinary citizens want to go out and borrow more themselves. Unless, of course, you believe that the government will end up bankrupt and try to seize all the assets it can get its hands on, rather like they are doing in Cyprus. In that situation it makes sense to have no assets they can plunder, or convert to "New Yen" at an unfavourable rate.

2 ( +2 / -0 )

Risky is an under statement.... The Japanese bond market basically crashed yesterday as yields plummeted. If this does not work, expect the Japanese economy to crash. In the mean time, buy Japanese stocks because they are on their way up big due to a flood of liquidity, and expect the yen to weaken to 120 to one vs. the U?S.Dollar by year end. Buy the etfs EWJ and YCS.

1 ( +1 / -0 )

He's already failed because he's doing nothing different than what his party has done for the past 60+ years. When the debt is 200%+ of the GPD, printing money is laughable!

0 ( +4 / -4 )

This Keynesian experiment is about to blow like a group of unsupervised teens playing in a chem lab.

0 ( +2 / -2 )

Japanese are looking optimistic half, and half fail. I am optimistic. This is because there are two new energy in Japan. Methane hydrate, nuclear fusion technology. All these changes if it is practical. It says that the United States also do not need the 2030 nuclear power generation by nuclear fusion. America, too have been studying together for fusion. I think the United States and Japan future is good. Agriculture will develop the vast land, cheap electric bill, if you use them. Of course, transport also changes in the electric train. Various industries will develop at the same time one speech at all! Japan can be developed with the United States should have developed. State of 51 th America I because it Nippon? But instead of looking ahead a little, are you investing in destination more also I recall.

2 ( +2 / -0 )

Agree with Aizo Yurei. Japan and, in general, Western economies are in a mess. We have to accept our decline, it's only the natural course of history.

0 ( +1 / -1 )

“Changing expectations, creating a more upbeat mood, that in itself is an accomplishment. People are feeling more optimistic and we see it. The stock market is up. The yen is down. Abe’s popularity is soaring,” said Gerald Curtis, a Japan expert at Columbia University.

No country has ever made its people rich by devaluing their savings and the money they're paid in.

Abe is basically taking a totalitarian-dictator-like approach: go out and spend your money now before I devalue it. He's already taken 25% of our savings and now wants to take even more.

It sure was nice having a stable currency before he got elected. Now it's "I have altered the deal. Pray I do not alter it further."

2 ( +3 / -1 )

darnname rightly identifies the devaluation as a tax, albiet a backhanded one. Whereas the Cypriot bank robbery is offensively "in your face", the preferred central-banker method is via QE. This week, everyone's banked savings was robbed by over 4%. Yet the lemmings thank Abenomics for reducing the buying power of their hard-earned savings. Enjoy the haircut!

3 ( +3 / -0 )

umbrella, you keep saying the same thing in every post, that Japan is doomed and that 40% of the population are temporary staff. Do you have a link for that? I have a link showing that the rate of temp staff among men is under 20%, with the highest groups being the above 65 and below 24 groups. For the 35 to 54 group it's well under 10%. http://www2.ttcn.ne.jp/honkawa/3250.html

1 ( +1 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites