Japan Inc cheers Abe growth plans but wary on capex, wages: Reuters survey

Thu Nov 14, 2013 5:04pm EST
 
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By James Topham and Leika Kihara

TOKYO (Reuters) - Japanese companies are enthusiastic about Prime Minister Shinzo Abe's economic-growth plans, although they remain cautious about boosting wages or investment - two elements that are key to securing a sustainable recovery, a Reuters survey showed.

The Japan Inc brownie points for Abe come nearly exactly one year after he jolted financial markets with an election campaign that promised bold policies and then followed through with massive monetary easing and hefty fiscal spending.

Companies are now enamored with the potential of the third stage in "Abenomics" - a planned slew of reforms encompassing tax, labor and deregulation, saying they are hopeful the measures will provide a catalyst for change.

"We are not in complete agreement, but we feel that just creating the sense that business conditions are improving is a step forward," wrote an executive at a metals and machinery firm.

That sentiment was echoed by many firms in the Reuters Corporate Survey, which showed nearly three-fourths of the 247 companies answering a question on Abe's growth strategy said it was "commendable" or "very commendable".

Abe's monetary and fiscal policies aimed at breaking a 15-year run of deflation and tepid growth helped lift Tokyo stocks 72 percent and push the yen down 20 percent over the past year.

In recent months, however, financial markets have greeted Abe's longer-term growth strategy with more skepticism, believing many of the reform measures will be watered down.

A GLASS ONE-QUARTER FULL   Continued...

 
Japanese Prime Minister Shinzo Abe talks during a news conference after his meeting with Turkey's Prime Minister Tayyip Erdogan in Istanbul October 29, 2013. REUTERS/Osman Orsal