There has been a certain buzz around Japan since Prime Minister Shinzo Abe promised radical change to breathe life back into a run-down economy six months ago. Whether that will last or fizzle out will depend on what long-term strategy Abe outlines as early as this week.
Analysts expect Abe to fire his third salvo to improve the competitiveness of the world's third largest economy. From introducing more flexible labor policies to steps that encourage more women into the workforce, Abe could also tackle deep-seated issues such as opening up the farm sector or loosening the country's tight immigration laws - widely seen as a necessary step given a rapidly-aging population.
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"Japan has now agreed and announced globally that it is willing to embrace change, something that it has not been willing to do for two decades and that's a shift that's still not priced into equity markets," said Glen Wood, head of sales at Japanese bank Mitsubishi UFJ. "People globally are skeptical about 'Abenomics' given what's gone on historically. A long-term plan would be helpful."
Abe, who became prime minister in December, has delivered on two fronts: fiscal stimulus announced earlier this year to give the economy a boost and pushing the Bank of Japan to adopt aggressive monetary stimulus to end two decades of deflation.
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These are short-term steps and it's the long-term structural changes implied by the last arrow of the three arrow strategy on which the success of Abe's economic policies, dubbed "Abenomics," hinges, Japan watchers say.
The International Monetary Fund said on Friday that it supported "Abenomics," urging Japan to implement structural reforms and fix its public finances.
Japan has slipped in and out of recession in recent years, been hurt by two decades of falling prices, while previous efforts to implement long-term change have fallen short of expectations.