As had been widely expected, Sunday’s election has returned the Liberal Democratic Party of Japan to power after a three-year absence. We can expect a two-pronged assault on deflation with significant fiscal stimulus and a push for more aggressive monetary easing. However, this approach is unlikely to be successful if the government continues with the same policies we have seen before, whether enhanced or not. A significant break is necessary with a focus on structural and regulatory reform. The new government should take their super majority as a mandate to do this.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services