Abenomics is set to continue, but on a different path than it was on before the elections and what is shaping up is a new version, Abenomics 2.0, says Bank of America Merrill Lynch.
Of particular note, BoA thinks that first step under Abenomics 2.0, are the ruling coalition’s draft plan for tax reforms in FY3/16, to be announced on 30 December, and wage negotiations to be held through March 2015.
“…Corporate tax cuts, changes in regulations on working hours, the use of robots by non-manufacturers and other measures to promote targeted capex, changes in agricultural regulations, and the TPP talks could be key checkpoints for the administration’s growth strategy in 2015,” Bofa argues.
“Also, the cabinet reportedly plans to decide on 27 December whether to approve a policy package to address over the medium term the concentration of resources in Tokyo (including tax incentives to get companies to move their headquarters to local areas). The specifics and the market’s reaction should be worth noting,” BofA adds.
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