Japan unlikely to return to steady growth - even under Abenomics

With growth low but erratic and inflation well below the Bank of Japan's target rate of 2%, the achievements of Abenomics are looking distinctly limited.

Real GDP growth in Japan has been highly erratic in the past three years, in part due to the imposition of the consumption tax, but also due to changes in the value of the yen and its impact on external trade. After two steep declines in the second quarter of 2014 and the third quarter of 2014, the annualised growth of real GDP has been 1.8%, 4.4%, -0.5%, and 1%. Industrial production growth has also been highly variable around a very low growth rate compared with the past. With short supply chains in Asia and more rapid changes in consumer tastes it is unlikely that Japan will return...