How can Japan boost corporate profitability?

How can Japan boost corporate profitability?

clock • 4 min read

Almost two years since his arrival, Prime Minister Shinzo Abe's reforms are starting to work. But wage increases are still needed to cope with price inflation, says Jean Médecin, a member of the investment committee at Carmignac Gestion.

Since his election in December 2012, Japan's Prime Minister, Shinzo Abe, has put into action an ambitious economic revival strategy articulated around three arrows: monetary policy with massive liquidity injections, fiscal policy with expansionary additional spending, and economic policy with structural reforms. So far, only the monetary policy arrow has fully lived up to expectations, with a massive depreciation of the yen of around 30%. Support from the fiscal policy has been diluted by a hike in VAT which came in April, from 5% to 8%. This counterbalanced the benefit of supplementa...

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