Business Briefing: Abenomics fails to address Japan’s true woes

Business Briefing

Japanese people are losing faith in Prime Minister Shinzo Abe's fiscal policies. FRANCK ROBICHON/AAP

New moves by the Bank of Japan (BoJ) to modestly extend its monetary policy appears to suggest the country is running out of measures to combat its sluggish economy.

Earlier in 2016, the bank introduced negative interest rates and will continue its bond buying program. But Shino Takayama, research fellow in economics at the University of Queensland says the effect of monetary policies don’t last long in Japan, as the debt to GDP ratio remains high.

The BoJ’s moves are supposed to work in tandem with the fiscal plan of Japan’s Prime Minister, Shinzo Abe (known as “Abenomics”). But the strategy hasn’t seemed to help so far and Takayama says its time for the government to address the root of the problems - income inequality and an ageing population hesitant to spend money.