Japan’s Abenomics Performs Well

February 10, 2014

Unlocking Word Meanings

Read the following words/expressions found in today’s article. 

1. deflation /dɪˈfleɪʃən/ (n.) – 
the condition in which prices decrease because of the decline in credit and available money
Example: The country is struggling because of deflation.

2. spur /spɜr/ (v.) – to rush or speed something up
Example: The government reformed some policies to spur economic growth. 

3. fiscal /ˈfɪskəl/ (adj.) – referring to government income, expenses, and debt
Example: The government is having difficulties because of the current fiscal crisis.

4. favorably /ˈfeɪvərəbli, ˈfeɪvrə-/ (adv.) – in a way that shows support or approval
ExampleThe new economic policies worked favorably for exporting companies. 

5. clear-cut /ˈklɪərˈkʌt/ (adj.) – clear and precise
Example: The policies should be clear-cut to avoid problems and misunderstandings.


Read the text below.
The Abenomics seems to be succeeding a year after it was launched by Japan’s 57th prime minister, Shinzo Abe.

Named after Shinzo Abe, Abenomics is a three-point strategy aimed to help recover Japan’s economic competitiveness and to spur the country’s growth after 15 years of deflation. These three points are the following: increasing fiscal stimulus through government spending, massively increasing monetary stimulus through new central bank policy, and creating structural reforms to the Japanese economy.

Considered as one of the biggest economic experiments in the modern world, Abenomics has been praised by markets because of its positive performance. One of its achievements is the 50 percent gain at Nikkei stock index, making it the most notable performing equities index in the whole world last year.

The yen also weakened 17% against the US dollar, which worked favorably for Japanese exporters.  Furthermore, the government is moving closer to its goal of 2% inflation in two years.

These activities show that Abenomics is successful at the first two of its three-point strategy. According to Vishnu Varathan, senior economist at Mizuho Bank, the government did very well on increasing fiscal and monetary stimuli [STIM-yuh-lahy].

However, economists are worried about the third point—structural economic reform. Tony Nash, managing director of IHS Consulting Asia, said the Japanese government has not formulated clear-cut policies that would keep the economy moving forward. The country has no well-developed structural reforms in terms of corporate taxes and better use of labor resources yet, he added.

According to experts, the biggest difficulty in achieving structural economic reforms is Abe’s political influence. Currently, Abe’s personal approval ratings are not very positive.

Viewpoint Discussion

Enjoy a discussion with your tutor.  

Discussion A

·         In your opinion, how else can Japan recover from the 15-year deflation? Explain.
·         Do you think other countries who experienced deflation should apply this strategy? Why or why not?

Discussion B

·         What are the benefits of having a good economy to a country’s citizens? Explain.
·         How do you think a government can prevent the economy from experiencing deflation? Please discuss briefly.


February 10, 2014