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from Breakingviews:

Japan index: Economy is ready to take on tax hike

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Breakingviews Abenomics Index climbed to a six-year high in February, suggesting the economy has enough strength to withstand this month’s sales tax increase. Wages and inflation expectations firmed up, while hopes of further monetary easing pushed bond yields lower.

Run the numbers

from Breakingviews:

Triple defence will shield Japan from tax burden

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

If history is a reliable guide, the Japanese economy will wilt when the country raises its sales tax on April 1. When Japan last increased the levy in 1997, consumer spending collapsed. But the three-pronged defence Prime Minister Shinzo Abe is putting in place makes a repeat doubtful.

from Breakingviews:

Japan stock market selloff is a temporary setback

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Japan’s stock market has suffered a temporary setback. The country’s equity indices have dropped more than 10 percent this year in local currency terms. With the central bank on standby for more easing, however, Japanese stocks should benefit from home support.

from Anatole Kaletsky:

Japan as the crisis next time

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Which major economy is most likely to disappoint expectations this year, and perhaps even cause a financial crisis big enough to break the momentum of global economic recovery? The usual suspects are China and southern Europe. But in my view the most likely culprit will be Japan.

While Japan no longer attracts much attention these days, it is still the world’s third-largest economy, with a gross domestic product equal to France, Italy, Spain, and Portugal combined. Its industries still pose the main competitive challenge to U.S., European and Korean manufacturers, and its regional weight is still sufficient to trigger financial crises across the whole of Asia -- as it did in 1997.

from Breakingviews:

Japan index: Abenomics momentum masks weakness

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A second straight gain in October pushed the Breakingviews Abenomics index to its highest since the 2008 crisis. But Prime Minister Shinzo Abe must worry about the durability of the recovery. Wage gains aren’t yet large enough to compensate households for rising prices.

from Anatole Kaletsky:

After initial promise, Japan’s new economy risks backsliding

At a time when economic optimism is growing and stock markets are hitting new highs almost daily, it is worth asking what could go wrong for the global economy in the year or two ahead. The standard response, now that a war with Iran or a euro breakup is off the agenda, is that some kind of new financial bubble could be about to burst in the U.S. But a very different, and rather more plausible, threat is looming on the other side of the world.

Japan is the world’s third-biggest economy, with national output roughly equal to France, Italy, Spain, Portugal and Greece combined. This year, Japan has become, very unusually, a leader in terms of financial prosperity and economic growth. According to the latest IMF forecasts, Japan’s 2 percent growth rate in 2013 will be the fastest among the G7 countries, easily outpacing the next strongest economies, Canada and the U.S., each with 1.6 percent growth. Japan’s stock market has gained 70 percent since last December, far exceeding the 25 percent bull market on Wall Street, and Japan’s corporate profits are projected to increase by 17 percent, according to Consensus Economics, compared with the paltry gains of 3 to 4 percent in Germany and the U.S.

from Breakingviews:

The ‘Abe put’ will keep Japanese equities buoyed

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

Say sayonara to the “Bernanke put” and hello to Shinzo Abe’s alternative. While the Federal Reserve chairman developed a reputation for supporting the price of bonds, the Japanese prime minister’s reforms are designed to push up stock prices.

from Breakingviews:

Nirvana eludes Japan after one year of Abenomics

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The economic nirvana promised by Shinzo Abe when launching his bid to become prime minister a year ago continues to elude Japan.

from Breakingviews:

Japan index: Risks to GDP growth recede

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Breakingviews’ Abenomics Index rose the most in six months in September. The gain would have been higher but for Japan’s unusual current account deficit. Higher revised values for July and August suggest the risk of a significant slowdown in third-quarter GDP growth has ebbed.

from Breakingviews:

Sony stumble gives Loeb headache and opportunity

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

Sony may have given Dan Loeb a headache - and an opportunity. The Japanese group’s quarterly loss knocked almost 12 percent off its market value by midday on Nov. 1 and raised questions about the company’s revival. Poor results from Sony’s entertainment and electronics arms suggest there’s limited upside from the spinoff that activist investor Loeb proposed earlier this year. However, it may give him a chance to push for more radical restructuring.

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