Investors Showing Confidence on Japan, Thanks to Abe’s Policies

Shinzo Abe, the Japanese Prime Minister seems to be the favorite among the investors. The confidence level of the investors on Abe is the most since September, 2010. The optimism for Abe has actually surpassed the optimism for Abe’s counterparts in US, China and various European countries as well.

According to a worldwide poll conducted on the traders, investors and analysts, people who are optimistic about Abe’s plans on the investment climate increased to 66% on May from its value of 54% in January. According to 33% of the respondents, Japan at least offers one of the 2 globally top opportunities in every year. This is better than its previous value of 21% and is better than the figures of China, for the very first time since 2009.

Thanks to the application of monetary and fiscal stimulus by the chief of Central Bank of Japan, Haruhiko Kuroda and Abe, most of the respondents believe that Japan will see an end to the deflation which has entrenched this Asian country for more than 10 years. 34% of the respondents believe that not only inflation, but Abe will be successful in fastening the domestic growth as well. This has definitely heightened the focus on the Japanese Government’s structural reform agenda which is going to be unveiled on next month.

According to the Stock Trader at Nissay Asset Management, Ai Sato, Abe has bought time and he has been able to change the minds of people about the potential of Japan. Thereby, the foreign investors are increasing the exposure on Japan and this liquidity is certainly being injected by the Bank of Japan. As far as the survey is concerned, the optimism rating for the policies of Abe is higher than any leader who has been on the radar of this survey ever since this came into existence. Angela Merkel, the chancellor of Germany has been on top of this list for quite some time, but Abe has replaced her now.

Propelled by the export gains and consumer spending, the Gross Domestic Product of Japan increased by 3.5% at an annualized pace, which is the most in a year. The report was published by the Government. Incidentally, this survey was conducted on 14th May, 3 days after the chiefs of the Group of 7 countries indicated that they may tolerate a sliding Yen.