Japan's Prime Minister Shinzo Abe on Wednesday unveiled a long-term plan to revive a weak economy, with economists saying more detail and implementation are now essential to prevent the strategy from failing as so many efforts to rejuvenate growth have done in the past.
Abe pledged to raise incomes by 3 percent annually over the next decade and set up special economic zones to attract foreign investment. He said the retail electricity market would be fully liberalized and he would aim to boost power related investment to 30 trillion yen ($300 billion) over the next 10 years.
Most of the measures had been flagged by the local media and there was some disappointment in markets that Abe did not announce bolder reforms in areas such as the labor market. The Nikkei stock index closed down 3.8 percent and the yen, which has weakened sharply this year on aggressive monetary easing in Japan, firmed.
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"Every prime minister in the last 20 years has had an economic growth plan, the key is implementation," Bank of Singapore's chief economist, Richard Jerram, told CNBC Asia's "
"There is a lot of focus on the [upper house] elections in July and if he [Abe] has a majority in both houses, it will be the first time in years they can be in a position to implement change, and then there can be no excuses," Jerram said. "Either you make some progress in the next 6-12 months, or people realize it is just another bunch of hollow promises."
Japan is the world's third largest economy after China and the United States. Yet, it has been plagued by deflation for two decades, slipped in and out of recession in recent years and past efforts to implement long-term reform have fizzled out.
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