Japanese stocks could surpass a level not seen since 2007 if the government pushes through in its drive to loosen business regulations, said Heizo Takenaka, a member of a government council on special economic zones.
As havens go, Japan sure is an odd case. You would think that having the developed world’s largest public debt, an aging and shrinking population, deflation, few natural resources and the ever-present risk of a giant earthquake might give investors pause.
The Bank of Japan’s decision to hold off on fresh monetary stimulus for a year puts pressure on the Abe administration to revive growth through fiscal measures and risks capping losses in the yen that aid export competitiveness.
Prime Minister Shinzo Abe’s delay in pushing forward plans to loosen Japanese business rules heightened pressure on the central bank to sustain confidence as stocks extended their slump from last month’s five-year high.
The Bank of Japan could usher in a growth spurt unseen in a generation by stepping up stimulus and ending deflation, according to Haruhiko Kuroda, the head of the Asian Development Bank and a potential contender for BOJ chief.
Japanese Prime Minister Shinzo Abe pledged a legislative campaign to loosen rules on businesses ranging from non-prescription drugs to construction. Stocks slid as he said the effort won’t begin for months.
The government taking office after Japan’s Dec. 16 election will pick the central bank’s top three jobs, a chance to reshape policy in the third-largest economy that the opposition aims to seize for unlimited stimulus.