Japan’s $1 trillion pension fund in Abe’s crosshairs

Visitors to Japan’s public pension fund can’t miss signs of the low-cost, low-return culture that Prime Minister Shinzo Abe seems determined to change with a review of its operations that kicked off on Monday.

There is no receptionist at the dimly lit, 40-year-old Tokyo building where the headquarters of the Government Pension Investment Fund, the world’s largest pension, occupies the second floor.

The waiting area consists of two mismatched couches. Behind a single closed door, over $1 trillion – equivalent to the annual economic output of South Korea – is run almost on autopilot and invested largely in government bonds issued across the street by Japan’s Finance Ministry.

Read the rest of the story: Abe reforms take aim at Japan’s $1 trillion pension fund.

Can Japan spend it’s way to a brighter future?

Daisuke Horii just collected his summer bonus. It was only slightly more than last year, but enough to compel the 34-year-old shopping mall clerk to Tokyo’s electronics district to look for some high-end speakers.RelatedIn Japan, Prices Stabilize for the First Time in Months June 28, 2013Enlarge This Image Ko Sasaki for The New York TimesA shopper, left, and a clerk at Hankyu department store.

“Things are generally looking brighter, aren’t they?” Mr. Horii said, as he scrutinized, then dismissed, cheaper alternatives at the bustling Yodobashi Camera electronics store. The Bose ones he has his eye on, which he’ll hook up to his TV, go for about $400.

“I don’t really need it, but I want it,” he said. “A good economy means you can buy things you don’t really need.”

Read the rest of the story: Getting Japan to Spend.

Abenomics working and G8 seems to stamp approval

Japanese cabinet ministers welcomed the Group of Eight summit’s stance on Tokyo’s sweeping stimulus policies as a vote of confidence in the government’s strategy to end 15 years of entrenched deflation and revive a lackluster economy.

Japan’s economics minister also moved to parry any suggestion that Prime Minister Shinzo Abe’s policies, known as “Abenomics”, are aimed at intentionally weakening the yen to benefit the country’s exports.

“Abenomics” combines fiscal stimulus, expanded debt purchases by the Bank of Japan and economic reforms, but some argue the policy mix could worsen Japan’s debt burden, devalue the yen and disrupt global capital flows.


Read the rest of the story: Japan says G8 stance is sign of approval for ‘Abenomics’.

Japan’s Abe Promises 3% Annual Increase in Japanese Incomes

Prime Minister Shinzo Abe pledged to raise incomes by 3 percent annually and set up special economic zones to attract foreign businesses in the third tranche of measures aimed at boosting growth in the world’s third-biggest economy.

Abe is also considering a push for public pensions and other public funds – a pool of $2 trillion (1.3 trillion pounds) – to increase returns by raising investment in equities, a government draft growth strategy showed, confirming a Reuters report.

The government will seek the view of experts and aim to reach a conclusion by autumn, the draft said. Still, such a move could face opposition from Japan’s risk-averse voters.

Read the rest of the story: Japan’s Abe targets income gains in growth strategy.

Abenomics: Japan Inc. Begins Reaping Benefits of a Weaker Yen

Japan’s major exporters are quickly reaping the benefits of a weaker yen, upgrading profit projections and inspiring confidence in the ability of a newly elected government and a more dovish central bank to steer the country out of two decades of economic malaise.

Toyota Motor Corp. underscored the new air of optimism on Tuesday when the auto giant hiked its profit forecast for the current fiscal year to a five-year peak. This followed similar upward revisions last week by Nintendo Co. and Japan Tobacco Inc. A weaker currency, coupled with a recent wave of cost-cutting in autos, electronics and other key sectors, signals a surge in profitability for Japan Inc.

In the markets, it’s being called “Abenomics,” named for the new Prime Minister, Shinzo Abe, who has taken his overwhelming victory in December as a green light to pursue an economic revival strategy centred on massive infrastructure spending, more debt financing and monetary policies designed to depreciate the currency and put some inflation back into the deflation-prone economy.

Read the rest of the story: Japan Inc.’s appreciation of the yen’s depreciation.