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First 'arrow' of Abenomics may now be weighing on economy - Nomura

FXStreet (Bali) - First “arrow” of Abenomics may now be weighing on economy, notes Richard Koo, Chief Economist at Nomura Research Institute.

Key Quotes

"There is the possibility that the first “arrow” of Abenomics, an attempt to lift inflation expectations with monetary easing, may now be having a negative impact on the economy."

"Fully 80.4% of respondents to the BOJ survey said prices were higher than they were a year ago, and of those 78.8% said this was a “rather unfavorable” development. In other words, nearly 60% of all people view the ongoing rise in prices negatively."

"These findings suggest that policies aimed at recklessly raising the inflation rate or lifting the consumption tax have the potential to break the back of the Japanese economy. These policies, therefore, should be approached with great caution."

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