The central bank's easing has been a major catalyst for financial markets. The benchmark Nikkei 225 rallied more than 40 percent since April last year, while the yen has weakened over 25 percent against the U.S. dollar over this period.
"We think it is safe to say that this strategy has generated more than the intended effect in this regard," Baba wrote in a note on Friday, referring to the reaction of financial markets to the BOJ's monetary stimulus.
Perhaps the biggest beneficiary of Abenomics has been employment, said Baba, highlighting that the job openings-to-applicants ratio has risen to roughly 1.1, higher than the pre-global financial crisis peak in 2006-2007.
But Baba notes that while employment is strong, the same cannot be said about incomes.
Read MoreWith fresh mandate, can Abe deliver on third arrow?
Real wages have been shrinking, failing to keep pace with the inflation brought about by April's sales tax hike to 8 percent from 5 percent.
Base wages - pay excluding bonuses and overtime - rose 0.5 percent on year in September, up from a 0.2 percent rise in the previous month. Once inflation is taken into account, however, wages fell 2.9 percent on year.
Work in progress
A rise in wages and upturn in exports hold the key to unlocking the success of Abenomics, said Baba, who expects progress on both fronts next year.
"The past two years tell us that yen weakness and stock market rallies alone are insufficient to spur household and corporate economic activity in a sustainable manner," Baba said.
Exports will improve gradually on drivers such as the U.S. economic recovery, he said, noting that overseas demand is a far more important determinant for exports than foreign exchange rates.
Meanwhile, real incomes will get a boost next year as the inflationary effects of the consumption tax hike drop out of the picture.
"The Abe administration has also signaled it will intervene strongly in spring wage negotiations again next year, emboldened by its December election win," Baba said.