Nomura strategist Yujiro Goto compares the Abenomics mix of
policies with those implemented by the Japanese Finance Minister
Takahashi in the 1930s, as also indicated by Finance Minister Mr.
Yujiro notes: "Inflation and economic growth recovered remarkably
under Mr. Takahashi's tenure while asset prices rose and interest
rates were anchored. The impressive market reaction and improving
economic outlook so far suggest to us that the policy is moving in
the right direction, as happened in the 1930s."
The Nomura strategist adds: "However, monetary, fiscal, and FX
policy may face a higher hurdle than in the 1930s: the 0 bound for
interest rates, necessity of the consumption tax hike, and
potential criticism from the international community, for example."
"Clearer changes in the BOJ monetary policy framework under the new
BOJ leadership will also be necessary which could be comparable
with the then exit from the gold standard. BOJ leadership
nominations, scheduled to be announced in a few weeks,
and further changes in policy framework will be very important in
this context" Yujiro concludes.