Japanese Prime Minister Shinzo Abe has announced a sweeping package of reforms, or the "third arrow" of his grand plan to pull his country out of deflation. The arrow itself comprises three "pillars:" improving productivity in the private sector, labor reform, and developing new markets. The program includes allowing Japan's massive public pension funds to buy more stocks, the creation of special economic zones, free-trade agreements, privatization, and power-market reform. The hope is to raise average income by 3%, above the two-year inflation target of 2%.
The Nikkei (EWJ) dropped sharply once again and took other Asian bourses with it, with the fall this time because of disappointment with Shinzo Abe's grand reform plan. The measures "aren't enough for Japan to achieve sustained economic growth and overcome deflation," says economist Hisashi Yamada, especially as the labor-market proposals don't go far enough. There's also disappointment at the lack of a nationwide corporate-tax cut.
The Nikkei (EWJ) dropped sharply once again and took other Asian bourses with it, with the fall this time because of disappointment with Shinzo Abe's grand reform plan. The measures "aren't enough for Japan to achieve sustained economic growth and overcome deflation," says economist Hisashi Yamada, especially as the labor-market proposals don't go far enough. There's also disappointment at the lack of a nationwide corporate-tax cut.
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