Nov 6 (Reuters) – Toyota’s sparkling earnings show how
Abenomics may be good for Japanese companies now, but perhaps a
bust for investing in Japan over the long term.
Toyota, the world’s biggest car maker, reported a
70 percent jump in profits last quarter, as it got a boost from
this year’s 12 percent drop in the yen against the dollar
A look under the hood, however, shows that Toyota’s gains
may not translate into the sustained expansion Japan hopes
Abenomics will spark. Named after Prime Minister Shinzo Abe,
Abenomics is an attempt to use government spending, radical
monetary policy and competitive reform to finally rescue Japan
from a 20-year-plus slump.
The first step was to hammer the yen lower, making Japanese
exporters more globally competitive. A weaker yen has helped
Toyota, but not perhaps in the way policymakers want.
Two things have to happen for Abenomics to succeed. First,
external demand prompted by a weaker yen needs to drive a
self-sustaining consumer expansion. That requires wage gains.