Helicopter money in Japan would be the catalyst for growth and inflation increases

Corporate backdrop favourable

Japan's nascent economic recovery is showing some green shoots, with the labour market particularly strong.

However, longer-term cultural headwinds remain significant hurdles to momentum within the domestic economy and it looks like these will have to be addressed before a virtuous circle of rising domestic demand and inflation can begin. We note the political stability Prime Minister Shinzo Abe has been able to bring to the country has improved the chance of much needed longer-term reforms being implemented, but this will take some time. One factor that could significantly boost domestic demand, inflation and investor sentiment towards Japan is a large increase in fiscal spending. Abe h...