The key issues for Japan's leaders in 2013

ON JAPAN

The Japanese market saw out 2012 in fairly dramatic fashion, rising by over 16% in the final quarter.

Investors have clearly been impressed with the policy intentions of the new LDP led administration: most notably the increased pressure they are placing on the Bank of Japan (BoJ) to combat deflation. It could even be argued that Prime Minster Abe has already achieved one notable success with the yen weakening by around 10% since his policy intentions were first announced. There is a perception that Japanese companies have lost their competitiveness against more nimble overseas competitors with lower cost bases (particularly in Asia). While there is some truth to this accusation (witness...