Tomorrow Will Definitely Be Better Than Today – Japanese PM

Now that the third arrow of Japan’s Prime Minister seems to have lost velocity and direction, the recently embattled Abe has taken to some good old-fashioned political clichés to try and keep up the momentum of his much touted Abenomics plan.

However in a nation with a massive and rapidly aging population promise of jam tomorrow might not resonate so well. Speaking late last week the Japanese PM rolled out an updated plan for reviving the world's third-largest economy, setting a GDP target of 600 trillion yen ($5 trillion).

"Tomorrow will definitely be better than today!" Abe declared in a news conference on national television. "From today Abenomics is entering a new stage. Japan will become a society in which all can participate actively." A cynic might well ask why suddenly now in 2015 has Japan become a place where its citizens can actively participate.

This week however could bring more uncertainty with stock prices seen as lacking direction, with investors paying attention to the upcoming important economic data. The Bank of Japan will announce its “Tankan” quarterly business sentiment survey for September on Thursday. The focus of the closely followed survey is to what extent Japanese companies have been influenced by the recent lethargy of the Chinese economy.

Shinzo Abe claimed that his new "three arrows" would be a strong economy, support for child rearing and improved social security, to lighten the burden of child and elder care for struggling families. But with Japan also committed to reducing its massive public debt, it is unclear how he intends to achieve those goals.

Abe also recently announced plans to accelerate reductions in corporate taxes. The central bank also is widely expected to add to its already unprecedented monetary easing by pumping more cash into the economy later this year. With wages still barely rising, families have tended to save, and increases in demand from monetary stimulus have been weaker than expected.

Japan's economy, estimated at $4.6 trillion in 2014, contracted at a 1.2 percent annual rate in the April-June quarter. Economists have warned that China's slowdown and market turmoil might weaken an expected recovery in coming months.

At Japan's recent pace of growth, achieving Abe's goal would be a stretch. Real GDP growth averaged 1.7 percent over the past five fiscal years. That's less than half the 3.0 percent pace needed to attain a GDP of 600 trillion yen by 2021.



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