IMF Shinohara:

  • Abenomics failing to turn around Japanese economy

IMF deputy managing director Naoyuki Shinohara speaking in an interveiw… Headlines on Bloomberg

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  • Weaker yen hasn’t boosted Japan’s exports
  • Stock market gains haven’t spurred domestic consumption
  • Growth in wages small
  • Structural reforms, deregulation of Abenomics not strong enough for Japan to break out of stagnant economy
  • “Japan’s economy will continue to grow moderately above its potential growth rate”
  • Government has no choice but to proceed with the sales tax increase, which has to be done from mid or long-term perspective
  • Long-term yields won’t jump even if the govt cancels planned sales tax rise as BOJ will continue to buy a large amount of JGBs
  • BOJ’s monetary policies are becoming like monetization of fiscal deficits, something more often seen in developing nations
  • “The yen’s depreciation is in line with economic fundamentals”