Wei-Ming Yuan

Abenomics in Japan: Are the Three Arrows on Target?

Mr. Honda, Paul Sher, John Kodonos, Ambassador Chen, Curtis, Madeline Antonsica, Alec Ellison, Wei-Ming Yuan, Alex von Furstenberg

Following two decades of stagnation driven by persistent deflation, Prime Minister Shinzo Abe launched the "Abenomics" framework in 2013, uniting aggressive monetary easing under Governor Haruhiko Kuroda, fiscal stimulus, and structural reforms. While these policies successfully shifted inflation expectations and expanded the central bank's balance sheet, the strategy faces significant headwinds including a consumption tax hike, a severe demographic decline, and skepticism regarding the depth of corporate governance changes. Although Japan retains unique advantages such as domestic debt currency and massive household savings, sustained economic recovery ultimately depends on the successful execution of long-term supply-side improvements to overcome bureaucratic barriers and low fertility rates.