Japanese Fund Manager Survey Shows Faith in Abenomics Waning

Fund managers have lost faith in Prime Minister Shinzo Abe’s efforts to kick start the Japan’s economy, a new survey found.

Only 16 percent considered Abenomics, or Abe’s three-pronged plan to revitalize the economy, a success, down from 72 percent in 2015, the AIMA Japan and Eurekahedge survey of investors with Japan mandates found.

While 76 percent of the 2016 respondents said that Abenomics has been a partial success, they weren’t particularly rosy on the future. Around 44 percent said Abenomics has little potential ahead, with 9 percent even more pessimistic, saying it has no further potential.

Only around 40 percent expect Japan’s economy to grow this year, down from 93 percent last year, with 51 percent this year expecting no growth and 9 percent expecting a contraction, the survey found.

A whopping 90 percent expect the Bank of Japan (BOJ) will step up with more easing this year, with 79 percent expecting the central bank will push interest rates deeper into negative territory and 90 percent expecting additional quantitative easing.

Even then, only 6 percent thought that the BOJ would meet its target of 2 percent inflation by mid-2017 and 28 percent expected that the economy would fall back into deflation.

“The BOJ’s pursuit of the 2 percent inflation target is increasingly coming to resemble Tom the cat’s unending pursuit of Jerry the mouse,” the survey said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza