Taking stock

30 October 2017 By William Pesek

Japanese stocks have just enjoyed their longest winning streak on record. The market actually looks less frothy than global peers, given solid earnings and large cash piles. But bets on Prime Minister Shinzo Abe accelerating reforms risk getting ahead of progress on the ground.

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Real wages grew in August for the first time in eight months, rising 0.1 percent following a 1.1 percent drop in July. Japan is considering new tax incentives to encourage executives to accelerate wage increases, Reuters reported on Oct. 25.

Consumer prices, excluding fresh food, rose 0.7 percent in August year-over-year, compared to 0.5 percent in July. On Oct. 10, Bank of Japan Governor Haruhiko Kuroda said he remains committed to ultra-loose monetary policies to reach 2 percent inflation.

Prime Minister Shinzo Abe said on Oct. 22 that he plans to go ahead with raising national sales taxes to 10 percent from 8 percent in October 2019 unless growth suffers a big shock. “In order to pay back Japan’s public debt, you need economic growth,” he said. “We’d like to proceed with fiscal reform by spurring economic growth and investment.”

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