Japan’s Abe outlines new plan to boost growth

by Joe Oliver, Forex Trading-Pips

Japan’s Abe outlines new plan to boost growth Forex Trading Update FXstreet.com:

Japanese PM Shinzo Abe outlined on Wednesday the next steps of his plan to boost the Japanese economy. In a closely followed awaited speech he announced that special economic areas would be created to attract foreign investors, incomes would be raised by 3% annually and the electricity industry would be fully liberalized.

During the speech, focused on measures necessary to boost long-term growth, the Japanese PM said that raising incomes was an important move as a “the aim of the growth strategy is nothing other than to create jobs for enthusiastic people and raise take-home pay for those who are working hard.”

The so-called “Third Arrow” reforms directed at stimulating growth were not received well by Japanese markets and the Nikkei fell by 3.8% after the speech. The Japanese government will announce further measures in the coming weeks.

Jane Foley, Senior Currency Strategist at Rabobank, comments on the possible outcome of Abe’s new economic program: “For the yen there are mixed messages in both the potential successes and failures of Abe policies. If Japan is successful in boosting inward investment and in creating an average of 2%, real growth over the next 10 years demand for Japanese assets will rise, monetary policy will normalise and the yen will find support. In contrast, if Abe fails to resuscitate the economy there is risk that the ageing population will lead to a greater debt burden and potentially an erosion of the current account surplus which would led to far weaker value for the yen.”…More at Japan’s Abe outlines new plan to boost growth

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