This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/world/2013/jun/19/japanese-leader-defends-economic-policy

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Japanese leader defends economic policy during London speech Japanese leader defends economic policy during London speech
(35 minutes later)
Japanese prime minister Shinzo Abe has delivered a robust defence of his strategy to jolt the world's third largest economy out of almost two decades of stagnation – dubbed Abenomics – as he insisted in a speech in London on Wednesday night that there was no alternative. Japanese prime minister Shinzo Abe has delivered a robust defence of his strategy to jolt the world's third largest economy out of almost two decades of stagnation – dubbed Abenomics – as he insisted in a speech in London on Wednesday night that there was no alternative.
He also dismissed criticisms that Japan was stoking a potentially damaging currency war by launching a three-pronged policy comprised of radical monetary easing, fiscal stimulus and pro-growth measures. "I would like you to understand that for Japan at this juncture – to echo the approach of the late Baroness Thatcher – this is a case of 'TINA': there is no alternative," he told an audience in the City of London. He also dismissed criticisms that Japan was stoking a potentially damaging currency war by launching a three-pronged policy comprised of radical monetary easing, fiscal stimulus and pro-growth measures. "I would like you to understand that for Japan at this juncture – to echo the approach of the late Baroness Thatcher – this is a case of 'TINA': there is no alternative," he told an audience in the City.
Abe dismissed criticisms that he was pursuing a policy designed to deflate the yen in order to boost exports at a cost to competitor economies. "Abenomics represents a win-win for both the global economy and the Japanese economy," he said. Abe dismissed criticisms that he was pursuing a policy designed to deflate the yen to boost exports at a cost to competitor economies. "Abenomics represents a win-win for both the global economy and the Japanese economy," he said.
The leader pointed out that the Japanese economy had grown by 4.1% in the first quarter of the year. "Should the economy extend this rate across the whole year, it will have the same effect as a country larger than Israel suddenly emerging." Abe insisted that an expanding Japan was "a necessity – a sine qua non" for the wider world, noting: "What if such a country were to experience negative growth? That would likely be the ultimate recipe for 'beggar thy neighbour'." To allow that to happen "would be a cardinal sin", he said. The leader pointed out that the Japanese economy had grown by 4.1% in the first quarter of the year. "Should the economy extend this rate across the whole year, it will have the same effect as a country larger than Israel suddenly emerging," he said. Abe insisted that an expanding Japan was "a necessity – a sine qua non" for the wider world, noting: "What if such a country were to experience negative growth? That would likely be the ultimate recipe for 'beggar thy neighbour'." To allow that to happen "would be a cardinal sin".
Earlier in the week he told a post-G8 press conference that the leaders of other major economies were highly supportive of Japan's efforts. "I had a chance to explain [Japan's] economic policy, and G8 leaders showed strong expectations and high appreciation," he said. Abe's defence of his economic policies came after fresh trade figures earlier on Wednesday showed Japanese exports rising in May at the fastest annual rate for more than two years. Calculated in yen, exports rose 10.1% in the year to May, compared with analysts' 6.5% forecast in a Reuters poll, rising for a third straight month and at the fastest pace since December 2010. Earlier in the week he told a post-G8 press conference that the leaders of other major economies were highly supportive of Japan's efforts. "I had a chance to explain [Japan's] economic policy, and G8 leaders showed strong expectations and high appreciation," he said.
The figures were seized upon by supporters of Abe supporters as signs of continued progress. They followed a period during which investor doubts appeared to be creeping in, as fear emerged that Abe's talk of economic shock treatment might not be fully matched in substance. A sharp retrenchment in the Nikkei share index and a strengthening yen in recent weeks have given rise to questions about Abe's radical approach. Suggestions that the US Federal Reserve is about to reduce its economic stimulus also added to market volatility. Abe's defence of his economic policies came after fresh trade figures earlier on Wednesday showed Japanese exports rising in May at the fastest annual rate for more than two years. Calculated in yen, exports rose 10.1% in the year to May, compared with analysts' 6.5% forecast in a Reuters poll, rising for a third straight month and at the fastest pace since December 2010.
But Abe used his Guildhall speech on Wednesday to underline his determination to press ahead with bold reform. He stressed that growth must come before "fiscal reconstruction", as he referred to Japan's huge national debt which runs at 170% of GDP. He told the audience: "In rebuilding our public finances, which options should we pursue? Again it's clear. There is no way forward other than growth." The figures were seized upon by Abe's supporters as signs of continued progress. They followed a period during which investor doubts appeared to be creeping in, as fear emerged that Abe's talk of economic shock treatment might not be fully matched in substance.
A sharp retrenchment in the Nikkei share index and a strengthening yen have given rise to questions about Abe's radical approach. Suggestions that the US Federal Reserve is about to reduce its economic stimulus added to market volatility. But Abe used his Guildhall speech to underline his determination to press ahead with bold reform. He stressed that growth must come before "fiscal reconstruction", as he referred to Japan's huge national debt which runs at 170% of GDP. He told the audience: "In rebuilding our public finances, which options should we pursue? Again it's clear. There is no way forward other than growth."
Galvanising consumer sentiment in Japan is seen as crucial to spurring consumption and investment as policymakers aim to pull Japan out of its so-called lost decades of economic stagnation and deflation.Galvanising consumer sentiment in Japan is seen as crucial to spurring consumption and investment as policymakers aim to pull Japan out of its so-called lost decades of economic stagnation and deflation.
Abe likened deflation to having "your body temperature drop continuously, bit by bit. Should you fail to address this deflation, you will find that consumers are no longer interested in acquiring things," he said.Abe likened deflation to having "your body temperature drop continuously, bit by bit. Should you fail to address this deflation, you will find that consumers are no longer interested in acquiring things," he said.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.Our editors' picks for the day's top news and commentary delivered to your inbox each morning.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning. Enter your email address to subscribe.Our editors' picks for the day's top news and commentary delivered to your inbox each morning. Enter your email address to subscribe.
Our editors' picks for the day's top news and commentary delivered to your inbox every weekday.Our editors' picks for the day's top news and commentary delivered to your inbox every weekday.