94% plunge shows ‘Abenomics’ is losing global investors | The Japan Times

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via 94% plunge shows ‘Abenomics’ is losing global investors | The Japan Times.

It seems that ‘Abenomics’ has lost its magic. Abe has been shy of deploying his own third arrow, namely structural change. There are important parallels here for the Eurozone. In discussions with Southern Europe, including France and Italy, Germany can cite Japan‘s example – again there is no substitute for structural change. Structural change must include opening up Japan’s service sector and public sector to global competition. For the Eurozone, the priorities are labor market reform, creating greater competition for jobs.

For me, there is another aspect of  ‘Abenomics’ which is often missed. Abe has placated his right-wing cronies with his foreign policy decisions – especially, he’s often ignored the sensitivities of China. Abe has created ‘political risk’ which can make foreign investors wary of investing in Japan. ‘Political risk’ is also a factor in the Eurozone – for example, the imminent national election in Greece.

Thoughts?