There has been a certain buzz around Japan since Prime Minister Shinzo Abe promised radical change to breathe life back into a run-down economy six months ago. Whether that will last or fizzle out will depend on what long-term strategy Abe outlines as early as this week.
Analysts expect Abe to fire his third salvo to improve the competitiveness of the world’s third largest economy. From introducing more flexible labor policies to steps that encourage more women into the workforce, Abe could also tackle deep-seated issues such as opening up the farm sector or loosening the country’s tight immigration laws – widely seen as a necessary step given a rapidly-aging population.
“Japan has now agreed and announced globally that it is willing to embrace change, something that it has not been willing to do for two decades and that’s a shift that’s still not priced into equity markets,” said Glen Wood, head of sales at Japanese bank Mitsubishi UFJ. “People globally are skeptical about ‘Abenomics’ given what’s gone on historically. A long-term plan would be helpful.”