IMF tells Japan needs to bring back Abenomics –
Japan is on the receiving end of a warning from the International Monetary Fund (IMF) about the risk of slow growth, stagflation and a new round of turmoil in financial markets. The IMF has urged Japan to “reload” its Abenomics reforms to prevent this from happening. Currently the Bank of Japan quantive easing ¥80 trillion ($712 billion) the same as the GDP of the Netherlands , an extra 10 Trillion in my option would weaken the yen by 5/7% and the Nikkei rise by 9/11%…
According to the Financial Times, IMF economists have said that Japan is seeing a modest recovery at the moment and that there would be annual growth of 0.8% by the end of the year, followed by 1.2% in 2016. However, the economy is fragile, the report states.
This is because imperative structural reforms required to bring the economy out of its slow growth and back on track have stalled and it comes at a time when Japan’s public debts were expected to hit 250% of GDP over the next five years.
The Bank of Japan has also been told that it needs to be ready to ease monetary policy further and do a better job of communicating its intentions to markets as inflation – which they forecast would hit 0.7% this year – continued to rise more slowly than expected towards the central bank’s 2% target.
Overall the IMF offered a sobering assessment of Prime Minister Shinzo Abe’s efforts to revive the Japanese economy, arguing that his reforms were failing to deliver as promised.
Tony Evans - Tokyo 