Legg Mason's Shiozumi: Japan should feel benefits of Abenomics this year

Inflation to reach 2% by 2018

Japan will finally begin to recover in 2017 from a multi-decade battle with deflation, as government reforms boost consumption, according to Hideo Shiozumi, manager of the £559m Legg Mason IF Japan Equity fund.

The Japanese inflation rate was negative for the whole of 2016 at -0.3%, but it finally began to rise in Q4 - hitting 0.3% in December.  Shiozumi (pictured) said the Bank of Japan (BoJ) is determined to see inflation hit its 2% target and will continue with its loose monetary policy until this happens. Although forecasts for this level to be reached have now been pushed out to next year, the manager believes inflation will begin coming through earlier, saying "2017 will be the year in which Japan's economy overcomes deflation". There are already signs of the economy improving, he a...