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Oct 1, 2015
JPY: Abenomics 2.0 is ambiguous effort to push Japanese GDP - Rabobank
FXStreet (Delhi) - Michael Every, Research Analyst at Rabobank, suggests that the Abenomics 2.0 is rather mildly ambitious plan to push the Japan’s ailing growth even though it has a concrete target to increase GDP by 20% to JPY 600trn (USD 5trn).
Key Quotes
“Indeed, the 0.5% m-o-m drop in industrial production and the flat m-o-m retail sales print both suggest that Japan is closer to another technical recession than it is to any kind of recovery.”
“Moreover, the sustainable 2.0% y-o-y inflation target that the BoJ is seeking is also nowhere near being met: in August inflation was just 0.2% y-o-y, and in Tokyo (seen as a leader for the rest of the country) it was back to a deflationary -0.1%.”
“It will be even more of what we’ve already seen, fiscal stimulus and BoJ QE, which we all now know does not achieve anything other than push the currency down, and so boost exporter shares, with little impact on overall GDP after a few quarters. Nonetheless, that appears to be where we are heading. Again.”
Key Quotes
“Indeed, the 0.5% m-o-m drop in industrial production and the flat m-o-m retail sales print both suggest that Japan is closer to another technical recession than it is to any kind of recovery.”
“Moreover, the sustainable 2.0% y-o-y inflation target that the BoJ is seeking is also nowhere near being met: in August inflation was just 0.2% y-o-y, and in Tokyo (seen as a leader for the rest of the country) it was back to a deflationary -0.1%.”
“It will be even more of what we’ve already seen, fiscal stimulus and BoJ QE, which we all now know does not achieve anything other than push the currency down, and so boost exporter shares, with little impact on overall GDP after a few quarters. Nonetheless, that appears to be where we are heading. Again.”