Abe’s Bullseye

TOKYO – Japanese Prime Minister Shinzo Abe has unveiled his long-awaited growth strategy – the so-called “third arrow” of what has come to be known as “Abenomics.” A preliminary version of the plan, announced to Japan’s Diet last year, was met with disappointment in international financial markets, which had expected a bolder approach. The new version is far more robust – and has received a far more positive global response.

Over the last 18 months, the first and second arrows of Abenomics – consisting of expansionary monetary and fiscal policies – have achieved considerable success in spurring Japan’s economic renewal. For starters, they have fueled price growth, with the GDP price deflator declining from 3% to nearly zero.