Updated October 1st 2015
AFTER four months battling to pass unpopular security legislation, Shinzo Abe, Japan’s prime minister, lost no time in returning to somewhat safer ground: the economy. On September 24th he fired off what he called “three new arrows” in service of Abenomics, his programme of monetary easing, fiscal stimulus and far-reaching structural reform. Yet recent data suggest the economy may offer Mr Abe no respite from a bruising year.
Japan’s GDP shrank by 1.2% on an annualised basis in the second quarter, after expanding in the first. Now worries about the third quarter are mounting. Industrial production continued to fall in August, suggesting that the economy may even have entered recession in the quarter. In addition, for the first time since the government embarked on Abenomics in April 2013, prices in Japan are falling again, albeit only slightly. One key gauge of inflation, core CPI (the consumer-price index excluding fresh food), fell by 0.1% in August.
It is all dire news for the Bank of...Continue reading
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