Aggressive Easing Wrong Medicine for Japan: Roach

What the US Can Learn From China: Stephen Roach
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With the election victory by Japan's Liberal Democratic Party (LDP) headed by Shinzo Abe, it is widely expected that an era of aggressive monetary easing will be unleashed in the country. But one expert says this will do little to prop up growth in the world's third largest economy which is reeling under its fifth recession in 15 years.

"I don't think it's going to work. QE (quantitative easing) is good at containing the downside, addressing crisis and disruptive markets, but it definitely doesn't give you traction in regenerating demand in the real economy," Yale University senior fellow Stephen Roach told CNBC on Friday, ahead of the Sunday elections.

(Read more: Investors In for Bumpy Ride Aboard the 'Abe Trade')

"Whether its consumption, capital expenditure, exports or the like, Japan needs a lot of structural repair to really break the logjam in a structurally impaired economy. If Abe leans on the BOJ (Bank of Japan), he's just barking up the wrong tree," the former Morgan Stanley chief economist added.

Japan's economy contracted for a second straight quarter in July-September, knocking it into a mild recession, and analysts expect another quarter of contraction in the final three months of the year due to falling exports to China.

(Read more: Toyota Sees Japan Sales Dropping 20% in 2013)

In the leadup to the win, the former Prime Minister had already provided a big boost to investor sentiment with his aggressive stance on monetary easing.

Last month, Abe pledged that if he were elected, he would push the BOJ to aggressively ease monetary policy to bring life back into the economy that is suffering from deflation and a strong yen. These comments have led to a rally in the country's stock market – which has risen 12 percent in the past month - and an over 5 percent slide in the yen against the dollar over the same period.

(Read more: BOJ Likely to Ease Again Via Asset Buying)

Roach said, while yen depreciation will support the export recovery, it is just a "temporary palliative" for the overall economy.

"Japan was moving in the right direction in the late 90s when it started to push ahead aggressively on recapitalizing the banks, corporate restructuring and structural reform and then the momentum has slipped. Structural reform doesn't give you instant gratification, but ultimately for countries like Japan it's the only way out," he said.