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23 October 2017 By William Pesek

Shinzo Abe’s big election win gives him room to push harder on reforms to boost wages and competitiveness. But skeptics have seen this before. The prime minister must act quickly and avoid getting sidetracked. After nearly five years of delay, investors are losing faith.

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Prime Minister Shinzo Abe’s Liberal Democratic Party and coalition partner Komeito won a combined 312 seats in a snap slection on Sunday, keeping its two-thirds "super majority" in the 465-member lower house, local media said.

Real wages grew 0.1 percent year on year in August following a 1.1 percent drop in July. According to a Reuters survey, consumer prices, including oil and excluding volatile fresh food prices, are seen rising 0.8 percent in September from a year ago, still short of the Bank of Japan’s 2 percent goal.

BOJ Governor Haruhiko Kuroda warned on Oct. 20 that profitability of regional banks is declining, a rare acknowledgment of the rising cost of prolonged monetary easing. “Structural downward pressure on their profitability will continue due to a dwindling population and shrinking business opportunities in regional Japan,” Kuroda said.

William Pesek is a Tokyo-based journalist, former columnist for Barron’s and Bloomberg and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”

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