2013年07月12日

これまで手をつけられなかったところに手をつけよ - 高橋琢磨

The recent up-and-down in the Nikkei Stock Average was probably a warning to investors who had become overconfident because of the quick impact of the so-called "Abenomics," which was designed to revitalize the sluggish Japanese economy. Abenomics is the name given to the policy mix of three arrows: extra-ordinary easy monetary policy, government spending, and a growth strategy, or structural reforms, to boost Japan’s competitiveness.
Some LDP members explain that the goal of Abenomics is to emulate the economy of Germany, whose growth rate is the highest among the industrial countries. It is true that by the early spring of 2013, the measures resulted in a dramatic weakening of the yen and a handsome rise in the Nikkei Stock Average. However, the Japanese yen is doomed to be decided by the markets, while the hypothetical German mark has been fixed to other the Eurozone members. Alternatively, Abenomics may be compared to the bold policy measures taken by New Zealand in late 1980s. While the latter addressed an acute loss of population, the former addresses the slow progression of population shrinkage. However, the structural reform programs in New Zealand were radical, whereas those by Abe are not. In this sense, markets are probably demanding more radical programs. Thus, the markets are adjusting to the excessive euphoria.
One of Abenomics’ goals is to achieve an inflation rate of 2% in two years to symbolize an end to the Japanese depression. If inflation expectation hits 2%, we may logically observe 4% bond yields, assuming 2% inflation expectation plus 2% risk premium. This would be a very different scene from the current bonds markets. If the government succeeds with Abenomics, Japanese banks, which have large holdings of government bonds of low yields, will have to sell their holdings before interest rates raise. However, it will be difficult to judge when and how. Anxiety mounted in late May when there were expectations that the United States QE2 program was about to end and that the Chinese economy was about to stagnate at the same time. As a result, Japanese banks sold their government bonds. However, the bond market does not seem to have changed significantly, nor is inflation expected.

This episode reminds us of the long-time declines and hikes in bond yields of Great Britain in the late 19th century. At that time, the global economy was under the strong influence of the excess capacity of the US and German economies, which had achieved innovations in such areas as the steel, chemical and electric industries. This historical experience, in turn, suggests that the current global economy is under the strong influences of the excess capacity of the Chinese economy and U.S. monetary policy, given that the yen-dollar rate is hovering around 100 yen.
Among intellectuals, some may insist that Japan’s "Lost Two Decades" (ushinawareta nijuunen) were not a lost time, but simply a time of adjustment necessary to achieve a sustainable economy. However, Japan’s economic decline took on a new reality in Japan when China elbowed Japan aside in 2010 to become the world’s second largest economy. Excessively easy monetary policies in the U.S.A. and Eurozone may have pushed Japan’s policy makers to follow suit. Fortunately or unfortunately, Japan adopted Abenomics. In order to avoid becoming a victim of hedge funds, Japan has to accomplish the complete version of Abenomics. I would like to take this opportunity to urge you to provide new ideas for a growth strategy and fiscal reforms.
posted by jtta at 18:05| Comment(3) | 日記 | 更新情報をチェックする
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