Of all the obstacles to success, the worst was self-inflicted: a 2014 rise in consumption tax from 5 to 8 per cent. In theory, Abenomics involved a fiscal stimulus. In reality, this only ever happened for a brief time, in 2013. Over the past four years, Japan has significantly tightened fiscal policy. The predictable result was to halt momentum towards higher prices.
Recently, the Abe government has realised its mistake and loosened the purse strings a little. It should continue to do so, ignoring foolish and arbitrary fiscal targets, until inflation finally does pick up. There have been policy failures over the past four years, but they all involved too little Abenomics, not too much.
Japan Fears Being Left Behind by Trump’s Talks With Kim Jong-un
March 13, 2018 | The New York Times
Mr. Abe’s supporters said he might yet restore his rapport with Mr. Trump, which could also help him domestically. “The Japanese people know Abe has close ties with President Trump,” said Yoichi Takahashi, a former Finance Ministry official and professor at Kaetsu University in Tokyo. “People believe Japan should not be isolated from the U.S.-North Korea deal, and they know Abe is the best politician and no one else can be as active as Abe.”
“My own concern is the way this summit meeting was granted to North Korea,” said Fumiaki Kubo, a professor of political science at the University of Tokyo. “This itself was a huge concession.” Mr. Kubo added that Mr. Abe “might be able to persuade Mr. Trump” to stick to a firm plan for denuclearization, “but Mr. Trump might forget what he was told or instructed or advised.”