Abenomics: medicine or poison for Japan?

[Fast Eddie B]

perfect and yes understood. but an annual real account balance that steadily goes up would be evidence towards the second too wouldn't it. I'll see what I can do.

It would be a single data point, and so, fairy weak evidence on its own.

Even random outcomes will distribute on a bell curve. With transaction costs and taxes, I might predict a curve weighted toward losing accounts.

But that means that any single player may still find himself on the "right" side of the curve, just as individuals do walk away from Las Vegas with winnings.

But keep piling on those winning trades and I'll continue to have an open mind.

 

[kevsta]

It would be a single data point, and so, fairy weak evidence on its own.

Even random outcomes will distribute on a bell curve. With transaction costs and taxes, I might predict a curve weighted toward losing accounts.

But that means that any single player may still find himself on the "right" side of the curve, just as individuals do walk away from Las Vegas with winnings.

But keep piling on those winning trades and I'll continue to have an open mind.

well yes, but it is also a zero sum game, meaning for every loss, there is a win? so if the vast majority of people lose consistently over time, then all the winnings are made by a small minority, consistently over time?

this doesn't exactly contradict my thesis, does it?

 

[kevsta]

So Nikkei.. back to that big picture monthly chart again, unfortunately chaps, this does not look good. in fact, it looks like a classic manipulation short setup, if that was on 15 min charts I would almost certainly be going short in the next 15-45 minutes.

the perfect entry (on intraday chart) would have another price pop up into the middle / top of those trendlines so you could get in high with your stoploss above the downtrend, but on a monthly chart that could take months.

but the fact that we now have not one, but 2 large stop runs through the 20 yr bear trend lines and rejected again implies downside for a while, and given the unnatural 7 blue bars in a row, we can expect some red correction to that in due time.

I would now be surprised to NOT see price revisit 12.3k and 11.1k first before any further breakout and ending of a 20+ year secular bear market.

the question I suppose, is at what point in a Nikkei slide will Abe/BOJ intervene with even moar? ..because I don't see it (end of bear market and new bull) happening otherwise

edit. CNBC reporting its Nikkei earnings day/season starting today, so likely some intraday fireworks. the sell-off has been quite unusually slow (for the Nikkei) just steadily grinding down alongside USDJPY. ..apparently Sony and a couple of others are reporting which should start to give markets indications of the success of Abenomics thus far.

 

[lomiller]

As an equal opportunity skeptic...

I must doubt the claim that one can profit from predicted price moves by reading charts.

I must also doubt the claim that one cannot profit from predicted price moves by reading charts.
Beyond that, you know why I take the first as my default position.

For now - until convinced otherwise.

You have to be careful about that one. Proving a negative is problematic at the best of times so a skeptics really needs to be careful about demanding people do so. Demanding a burden of proof that is impossible or effectively impossible to meet is actually a common pseudo-science technique, what the skeptic needs to focus on is the weight of the evidence. In most cases lack of positive evidence can be viewed as sufficient to view a negative claim favorably. (I.E. it’s generally fair to assume the negative when no positive evidence has been presented so long as you keep in mind that any such assumption will be provisional.)

Wrt technical analysis, usually the underlying premise behind seems to be that other people are also looking at trends and trading in accordance with them. This would tend to give them momentum that could potentially be leveraged. The obvious problem is that any such analysis would tend to “work until it doesn’t”

There is also so much computing power dedicated to pattern matching and figuring out “what’s working now” I doubt any individual can come out ahead and over a large enough sample size, at best they are simply going to track the market. Indeed there is research which shows that very few people can actually beat the market average by any substantial amount in the long term.

Kvesta’s specific approach seems even less credible to me. First it assumes yet un-proven market manipulation without any real evidence, second it assumes “smart money” is driving certain trades, again without any real evidence, third it assumes there is a way to take advantage of this “information” but against here is no clear reason why the strategy should be successful even if the above premise turned out to be true.

 

[kevsta]

Kevsta’s specific approach seems even less credible to me. First it assumes yet un-proven market manipulation without any real evidence, second it assumes “smart money” is driving certain trades, again without any real evidence, third it assumes there is a way to take advantage of this “information” but against here is no clear reason why the strategy should be successful even if the above premise turned out to be true.

yes it's interesting isn't it, why exactly it works, that is.

 

[kevsta]

You have to be careful about that one. Proving a negative is problematic at the best of times so a skeptics really needs to be careful about demanding people do so. Demanding a burden of proof that is impossible or effectively impossible to meet is actually a common pseudo-science technique, what the skeptic needs to focus on is the weight of the evidence. In most cases lack of positive evidence can be viewed as sufficient to view a negative claim favorably. (I.E. it’s generally fair to assume the negative when no positive evidence has been presented so long as you keep in mind that any such assumption will be provisional.)

Wrt technical analysis, usually the underlying premise behind seems to be that other people are also looking at trends and trading in accordance with them. This would tend to give them momentum that could potentially be leveraged. The obvious problem is that any such analysis would tend to “work until it doesn’t”

There is also so much computing power dedicated to pattern matching and figuring out “what’s working now” I doubt any individual can come out ahead and over a large enough sample size, at best they are simply going to track the market. Indeed there is research which shows that very few people can actually beat the market average by any substantial amount in the long term.

Kvesta’s specific approach seems even less credible to me. First it assumes yet un-proven market manipulation without any real evidence, second it assumes “smart money” is driving certain trades, again without any real evidence, third it assumes there is a way to take advantage of this “information” but against here is no clear reason why the strategy should be successful even if the above premise turned out to be true.

I answered and discussed this in more detail here, trying to keep it out of all the other threads

 

[kevsta]

lol, wrong thread, apologies

 

[stevea]

"Weak Japanese GDP data highlights flaws in Shinzo Abe's three 'arrows'"

http://www.theguardian.com/business/economics-blog/2013/aug/12/weak-japan-gdp-shinzo-abe-abenomics

The rate of expansion was far weaker than expected and scotched the always rather fanciful hopes that Abe had found a magic bullet for Japan's woes. He hasn't.

What a surprise (not) !

Inflation and deflation are both self-perpetuating based mostly on personal expectations of the future. I'm beginning to think that a main flaw in the neo-Keynesian solution is that it fails to promote a change in expectations.

 

[Puppycow]

"Weak Japanese GDP data highlights flaws in Shinzo Abe's three 'arrows'"

http://www.theguardian.com/business/economics-blog/2013/aug/12/weak-japan-gdp-shinzo-abe-abenomics




What a surprise (not) !

Inflation and deflation are both self-perpetuating based mostly on personal expectations of the future. I'm beginning to think that a main flaw in the neo-Keynesian solution is that it fails to promote a change in expectations.

I think that commentary (from Aug. 12th I note) is overly pessimistic, but time will tell. 2.6% growth is still better than most other developed countries right now. Economic indicators released since that commentary was published seem to be fairly positive. The next GDP announcement is, I think, next Monday. Here's some of the reports from the last week of August and this week:

http://www.marketwatch.com/story/japans-july-industrial-output-swings-to-32-rise-2013-08-29

Unemployment rate drops to 3.8%
http://www.dailyfx.com/forex/market...less_Rate_and_CPI_Improves_USDJPY_Higher.html
http://www.investing.com/news/forex-news/forex---usd-jpy-slightly-lower-after-japan-pmi-data-252254

ETA: the 2.6% GDP reading was a preliminary estimate. The Sept. 9th report will be a revision of that estimate. Here's what analysts think the revision will say:
Analysts: Japan Q2 GDP Seen Revised Up To Annualized 4%

TOKYO (MNI) - Japan's economic growth will be revised up sharply to around 1.0% on quarter, or an annualized 4.0%, in April-June in the second preliminary Q2 GDP data due on Sept. 9, after Monday's government data indicated a pickup in capex and higher-than-estimated inventories, economists said.

This will support the government's plan to hike the 5% sales tax to 8% next April, barring a global financial crisis in the next month when Prime Minister Shinzo Abe will decide whether to go ahead with the plan based on economic data and expert opinions.

Combined capital investment by non-financial Japanese companies was unchanged (+0.0%, or +Y1.4 billion) on year at Y8.31 trillion in the April-June quarter, improving from two quarters of decline, thanks to rises in capex by carmakers, oil refineries, builders, real-estate firms and retailers.

The results of the survey by the Ministry of Finance - Financial Statements Statistics of Corporations by Industry - showed that higher share prices have produced wealth effects and improved consumer sentiment while the depreciation of the yen since late last year has boosted exporter profits.

On quarter, combined capital outlays (excluding software) rose for the third consecutive quarter, with the pace of increase accelerating to +2.9% in Q2 from +0.3% in Q1.

The survey also showed that inventories surged to Y2.36 trillion in April-June from Y1.08 trillion a year earlier.

"The Q2 GDP will be revised up sharply by large increases in works-in-process inventories and public works projects," said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management.

Japan's economy grew a real 0.6% in the second quarter from the previous three months, or an annualized 2.6%, with the pace of growth decelerating from +0.9% (annualized +3.8) in the first quarter, preliminary GDP data released last month showed.

 

[Puppycow]

As predicted, 2nd quarter GDP was revised up from 2.6% to 3.8%.

Japan’s Revised G.D.P. Data Shows Strong 2nd Quarter

TOKYO — Japan’s economy expanded much faster than initially thought in the second quarter, data showed Monday, adding to growing signs that a solid recovery is taking hold and strengthening the case for a planned sales tax increase next year.

A marked improvement in capital expenditure led to an upward revision in April-June gross domestic product to an annualized 3.8 percent expansion from a preliminary 2.6 percent increase, according to data released by the Cabinet Office. The expansion, which roughly matched a median market forecast for a 3.7 percent increase, underscores the strength of Japan’s recovery.

It was the third consecutive quarter of increase after 4.1 percent growth in January-March. On a quarter-to-quarter basis, G.D.P. growth was revised up to a 0.9 percent increase from a preliminary 0.6 percent.

Japan emerged from recession in 2012, and data for much of this year has shown the benefits of Mr. Abe’s reflationary policies and the Bank of Japan’s s aggressive stimulus program.

 

[lomiller]

What a surprise (not) !

Inflation and deflation are both self-perpetuating based mostly on personal expectations of the future. I'm beginning to think that a main flaw in the neo-Keynesian solution is that it fails to promote a change in expectations.

So you are saying that “Famed neo-Keynesian” Milton Friedman was wrong when he said “Inflation is always and everywhere a monetary phenomenon.”?

While Abe is certainly pursuing some Neo-Keynesian polices as well, most if not all Monetarists would disagree with your assertion that the monetary policies he’s pushing are Neo-Keynesian or that monetary expansion would not bring about inflation and economic growth.

 

[stevea]

So you are saying that “Famed neo-Keynesian” Milton Friedman was wrong when he said “Inflation is always and everywhere a monetary phenomenon.”?

You constantly make false claims abt Friedman's positions. Some are even rebutted by Friedman's own words on youtube You constantly claim to speak for this long deceased man with your distorted views of economics (e.g confusing QE with conventional monetary policy). So it's impossible here to determine if you are trying to express sarcasm or expose your own ignorance. Friedman was obviously never a Neo-Keynesian.

I generally like Friedman, but I am not a sycophant follower, so your attempt to show that I don't adhere to everything Friedman wrote literally is some odd fetish of your own invention.

There is nothing contradictory between my statement and Friedman's quote. Friedman wrote in a "Free to Choose" chapter on Inflation, both his popular quote abt "always and everywhere a monetary phenomenon", and then he described some of the consequences of inflation (long term wage contracts with escalation clauses, and bond issuance at high yields, unwillingness to hold cash) that are based on the expectation of future inflation and also perpetuate inflation. He explicitly states that inflation take "year and not months" to create or eliminate for these reasons. This doesn't change the fact that the root cause may be monetary.

While Abe is certainly pursuing some Neo-Keynesian polices as well, most if not all Monetarists would disagree with your assertion that the monetary policies he’s pushing are Neo-Keynesian or that monetary expansion would not bring about inflation and economic growth.

This statement has 3 parts, all in error ....

1/ Abenomics is clearly explicitly Keynesian in origin.

"Abe's Keynesian-inspired plan, dubbed "Abenomics," takes a three-pronged approach ..."
http://www.cfr.org/japan/abenomics-japanese-economy/p30383

"...Abenomics supporters appear to believe in the new drive to push the Japanese economy from its current deflationary state into an inflationary one, and both Old and New Keynesian models seem to support this..."
http://econospeak.blogspot.com/2013/03/old-and-new-keynesian-economics-and.html

"The government’s supporters have christened the fiscal and monetary strategy “Abenomics”. But it appears to be ripped largely from John Maynard Keynes."
http://www.economist.com/news/finan...rge-reboot-japans-recessionary-economy-keynes

"Keynesian theories ... are cited as partial inspiration for Abenomics."
https://en.wikipedia.org/wiki/Abenomics

While Abe is certainly pursuing some Neo-Keynesian polices as well, most if not all Monetarists would disagree with your assertion that the monetary policies he’s pushing are Neo-Keynesian or that monetary expansion would not bring about inflation and economic growth.

2/ Why would ANYBODY care that a Monetarist calls a policy Neo-Keynesian ? That's ridiculous ! Further it's another of your very common "argument from authorities in absentio" fallacies. Show us this list of most/all Monetarists - and stop putting words in other ppls mouths (especially the dead). You are trying to deflect criticism of these very criticize-able positions by attributing YOUR ideas to others. Most if not all logicians think you are full of BS.

While Abe is certainly pursuing some Neo-Keynesian polices as well, most if not all Monetarists would disagree with your assertion that the monetary policies he’s pushing are Neo-Keynesian or that monetary expansion would not bring about inflation and economic growth.

3/ Classic Monetarist policy argues that excessive [above GDP growth] money printing, like Abe's loose money policy, results in inflation - not growth. Maybe you should try to understand Monetarism before making such silly assertions.

 

[lomiller]

You constantly make false claims abt Friedman's positions.

Then by all means show us some evidence of what Friedman's position "really was".

There is nothing contradictory between my statement and Friedman's quote. Friedman wrote in a "Free to Choose" chapter on Inflation, both his popular quote abt "always and everywhere a monetary phenomenon", and then he described some of the consequences of inflation (long term wage contracts with escalation clauses, and bond issuance at high yields, unwillingness to hold cash) that are based on the expectation of future inflation and also perpetuate inflation. He explicitly states that inflation take "year and not months" to create or eliminate for these reasons. This doesn't change the fact that the root cause may be monetary.

A poor attempt at shifting the goalposts. You claims that inflation and deflation were based on expectation not that they were based on monetary factors with expectations influencing the response time

This statement has 3 parts, all in error ....

1/ Abenomics is clearly explicitly Keynesian in origin.

Applying monetary policy is explicitly monetarist in origin. The fact that Abe is also applying other economic theories as well does not change this.

Why would ANYBODY care that a Monetarist calls a policy Neo-Keynesian ?

Please read more carefully. I said that many monetarists would take offense to you calling monetarist policy Neo-Keynesian

Classic Monetarist policy argues that excessive [above GDP growth] money printing, like Abe's loose money policy, results in inflation - not growth.

Not quite. It argues that excessive increases in the money supply don't produce real growth. It also argues that insufficient money supply limits real growth.

For example Friedman argued long and often that the Great Depression was a result of the Fed allowing the money supply to contract.By your logic the Fed should have been constricting the money supply because real growth was declining, when in fact monetarists argue the exact opposite, that it was the insufficient money supply driving the GDP contraction.

 

[Puppycow]

Arguments over dead economists aside, the latest empirical evidence seems to support that it is working, and the Guardian blogger (post #308) may have spoken too soon based on preliminary data. The latest measure of GDP growth is 3.8% and the All Industry Activity Index reported today, rose more than expected.

 

[stevea]

Arguments over dead economists aside, the latest empirical evidence seems to support that it is working, and the Guardian blogger (post #308) may have spoken too soon based on preliminary data. The latest measure of GDP growth is 3.8% and the All Industry Activity Index reported today, rose more than expected.

I think you missed the point. Any government can increase nominall GDP by just spending more, but the issue in this thread is if this policy of Abe's actually improves REAL GDP.

Japan's quarterly GDP was over 3% in two of the early 2013 YOY postings, and now it is revised up to 0.9% (your 3.8% annual rate). But the last three J inflation figures are -0.3%, 0.3%, 0.7% (an ominous trend).

As expected Abe's policy will create several percent of inflation and you need to account for that then compare the REAL GDP before and after Abe's policy was implemented. At ~5 months in it's too early to say, but the signs are not impressive. It should be obvious that bookeeping changes and redistribution of wealth doesn't create addition productivity. Only a few parts of Abe's policy have hope of improving real gdp.

 

[stevea]

Then by all means show us some evidence of what Friedman's position "really was".

I never pretend to speak for Friedman - my complaint is that you should not either. If you can make a supporting quote in context - that's great, but your constant claims that you speak for the long dead Friedman, or that dead Friedman agrees with you is dishonest and has no place in rational debate.

What is certain is that Friedman was not promoting the new and novel QE approach [Bernanke buying GSE bonds, or Abe buying construction bonds] invented years after his death.

A poor attempt at shifting the goalposts. You claims that inflation and deflation were based on expectation not that they were based on monetary factors with expectations influencing the response time

Same goalpost, you merely failed to read carefully. I said the SELF-PERPETUATION of inflation/deflation are based on expectation. So yes I did say that this "response time" or perpetuation or inertia in inf/deflation is largely caused by sentiment. By "self" here I mean that inflation/deflation reinforces the expectation of inflation/deflation in the future, and then actors with these expectation act in ways that tend to perpetuate the inflation/deflation. Go examine Popper or Soros on reflexivity.

I NEVER said or suggested that monetary policy was not also a factor in both inflation and the expectation of inflation. We know how to change monetary policy (in one direction) on a dime - we do not know how to change human expectation so effectively.

Applying monetary policy is explicitly monetarist in origin. The fact that Abe is also applying other economic theories as well does not change this.

No !. "Monetarism" and "monetarist" refers to monetary policy as developed in Friedman's Chicago School and is distinct from Keynes view on monetary policy. All modern economic views must have a monetary policy, but only the Chicago School and variants are "monetarists".
https://en.wikipedia.org/wiki/Monetarism


This link (section III) briefly describes differences between Keynes vs Monetarism monetary policies.
http://www.oswego.edu/~edunne/200ch15.html

III. Monetary Policy: Keynesian vs. Monetarist Views

In the Keynesian model above [typical aggregate supply.demand view] , interest rates & investment are the transmission mechanism of monetary policy, i.e. that is the way monetary policy affects macroeconomic outcomes. However, there are other points of view.

The Monetarists believe that monetary policy affects prices, but not real GDP or unemployment. The impact of monetary policy can be expressed using the equation of exchange: [didaction on quantity theory of money]

Please read more carefully. I said that many monetarists would take offense to you calling monetarist policy Neo-Keynesian

Go re-read you own words. You didn't say that at all.
You said .... "most or all" (not "many") monetarists would ...

disagree with your assertion that the monetary policies he’s pushing are Neo-Keynesian or that monetary expansion would not bring about inflation and economic growth.

Abenomics is an attempt to create real growth w/ monetary stimulus spending (incl bond purchase) policy and that is Keynesian. Yes they have a goal to double their money supply in just a few years [2yrs ? ~41% increase/yr !] , this is a result of buying bonds as consumption/stimulus - Keynesian and certainly not Monetarist. Monetarists of the ChiSchool do not believe that money supply impacts real GDP in the long run, but do believe that excess money supply growth does cause inflation in the long run. That is also my position wrt Abenomics; that MOST of the Abenomic features (not all) will not impact GDP for long, but will cause inflation increases commensurate with the nominal GDP increases.

Not quite. It argues that excessive increases in the money supply don't produce real growth. It also argues that insufficient money supply limits real growth.

Not quite. A monetarist would argue that excess/insufficient money supply causes inflation/deflation in the long run and transient short term increase/decrease to productivity. Monetarists DO NOT believe that insufficient supply causes "limited growth", except as a s-t transient.

For example Friedman argued long and often that the Great Depression was a result of the Fed allowing the money supply to contract.By your logic the Fed should have been constricting the money supply because real growth was declining, when in fact monetarists argue the exact opposite, that it was the insufficient money supply driving the GDP contraction.

Stop making things up. I did not suggested or imply that money supply should contract in a recession. Money supply is not a short-term reactive tool. Such reactive money policy leads to instability (think expectations).

From 1929-1933, in response to a recession, the Fed allowed the money supply to shrink by ~33% - a massive decrease- creating a huge negative transient that was the Great Depression. Now if we had some long term event that should cause lower productivity (California falls into the pacific, or an aging population) then a monetarist might argue it's reasonable to reduce the annual money supply growth from 6% to 5% or whatever for a decade or two.

OTOH since 2009 the US money supply has been increasing by an avg 11.1%/yr (M1) which is too high - beyond any reasonable expectation of growth+modest inflation. Then we have the bond-bubble that results - a sort of non-generalized 'inflation'.

Yes, Friedman argues that the Great Depression resulted from a shrinking money supply, but that does not mean monetarists are in favor of massive long-term increases in money to combat transients. Friedman suggested offsetting the losses of bank failure with bond purchases [IOW maintaining the moderate supply growth]. That's quite different from a Keynesian policy of stimulative Government spending.

Here is a paper by Friedman in 1998 on Japan - he advocates that Japan of that era return to it's ~8.2% money growth rate from 2.1% (assumes they have ~5% real GDP growth). That's looser money, not spending massively for stimulus. Yes a monetarist would suggest buying bonds too - but to establish the money supply growth, not as stimulus.

http://www.hoover.org/publications/hoover-digest/article/6549
In Friedman's words ...

The surest road to a healthy economic recovery [for Japan after failed policies] is to increase the rate of monetary growth, to shift from tight money to easier money, to a rate of monetary growth closer to that which prevailed in the golden 1980s but without again overdoing it.

IMO Abenomics 40%/yr money supply growth is "overdoing it".


There is an interesting side-topic here on the impact of Fed bond purchases on actual money supply in circulation - but that will have to wait.

 

[lupus_in_fabula]

I think you missed the point. Any government can increase nominall GDP by just spending more, but the issue in this thread is if this policy of Abe's actually improves REAL GDP.

When we look at Japan, real GDP has been growing at a higher rate than nominal GDP. That has generally been the trend since at least a decade backwards. The average RGDP growth per quarter since 2001 has been 0.2% whereas average NGDP growth per quarter has stayed in negative territory at -0.1%.

NGDP rate of change from previous quarter 2013: Q1 = 0.6%, Q2 = 0.9%. Compare that to RGDP and you get Q1 = 1.0%, Q2 = 0.9%. Same rates annualized: NGDP Q1 = 2.5%, Q2 = 3.7% … as compared to RGDP growth: Q1 = 4.1%, Q2 = 3.8%.

When looking at the inflation rate there's not much to report I think. The annualized 0.7% reported for July 2013 looks like a break in trend but it really is not. It seems elevated because it's compared to July 2012 which showed negative numbers. Inflation over previous month (MOM) shows nothing unusual at 0.2% (the month before showed zero growth).

Inflation annualized:

… compared to inflation month-over-month:

 

[Puppycow]

I think you missed the point. Any government can increase nominall GDP by just spending more, but the issue in this thread is if this policy of Abe's actually improves REAL GDP.

Japan's quarterly GDP was over 3% in two of the early 2013 YOY postings, and now it is revised up to 0.9% (your 3.8% annual rate). But the last three J inflation figures are -0.3%, 0.3%, 0.7% (an ominous trend).

As expected Abe's policy will create several percent of inflation and you need to account for that then compare the REAL GDP before and after Abe's policy was implemented. At ~5 months in it's too early to say, but the signs are not impressive. It should be obvious that bookeeping changes and redistribution of wealth doesn't create addition productivity. Only a few parts of Abe's policy have hope of improving real gdp.

I am aware of the difference between real and nominal GDP. The numbers I cited are for real GDP, not nominal (and generally when they report GDP, they refer to real GDP, not nominal).

I would not call inflation figures of -0.3%, 0.3%, 0.7%, an "ominous trend" because in fact it is the intention of Abe and the BoJ to raise inflation to 2% annually. I concede that at ~5 months in it's too early to say, but that means it's also too early to pronounce it a failure, which is what the Guardian blogger did based on preliminary numbers. As for "impressive signs", what would qualify as impressive if not 2 quarters of real GDP growth around 4%?

 

[Puppycow]

Japan Manufacturer Confidence Reaches Highest Since Pre-Lehman

Confidence among Japan’s large manufacturers rose to the highest since the early stages of the global credit crisis in 2007, as Prime Minister Shinzo Abe readies measures to cushion the economy from a sales-tax rise.

The quarterly Tankan (JNTSMFG) index for big manufacturers rose to 12 in September from 4 in June, the Bank of Japan said in Tokyo today. That exceeded the 7 median estimate of 30 economists surveyed by Bloomberg News.

The sentiment gain follows a 21-percent slide in the yen against the dollar in the past year that’s made exporters from Toyota Motor Corp. (7203) to Panasonic Corp. (6752) more competitive. While Abe today is projected to confirm Japan will raise the sales tax to 8 percent from 5 percent in April, the ruling coalition is assembling stimulus steps including corporate-tax relief.

“The sales-tax increase from April is a done deal,” Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo, said before the report. “Japan’s economy will probably hold onto a steady recovery this fiscal year and may be able to withstand the planned sales-tax hike next fiscal year.”

 

[Puppycow]

Helpful testable predictions (from Schiff)

- 200 yen to the dollar by the end of 2013
- Gold at $5,000 per ounce before 25 October 2014

We can at least tell whether he was right or wrong.

Well with less than 3 months to go until the end of the year, the yen is still trading at less than 100/dollar. Inflation, while showing a modest rise according to the latest figures is still less than Kuroda's 2% annual target.

Yields on JGBs are lower than they were a month ago.

The yield on the "benchmark" 10-year bond is 0.64%. Earlier in the thread some worries about an imminent meltdown of the bond market were expressed (including by myself! mea culpa) when that yield briefly rose above 1% but for now at least those fears seem to have receded.

It may have something to do with the decision to raise the consumption tax next April.

So to recap, no meltdown in the bond market, no meltdown of the yen, Nikkei still above 14,000, two consecutive quarters of fairly strong (real) GDP growth around 4%.