The Chart Rebuts The Biggest Myth About Abenomics

“Abenomics” is the name given to Japan’s effort to get itself out of a multi-decade slump via an aggressive bout of monetary easing, the likes of which it hasn’t pursued in the past.

One of the common misconceptions about Japan, and the Japanese strategy is that monetary easing is about weakening the yen, and boosting exports via cost competitiveness against its global manufacturing peers.

This may be a tertiary effect, but the real game is to boost inflation expectations in order to boost domestic spending. The key thing to think about is that in a deflationary environment, it behooves the consumer to delay purchases, since they’ll be cheaper tomorrow or the next month. Abenomics seeks to break this pattern.

So does it?

Well here’s a chart of Japanese retail sales, via Wells Fargo. There’s your answer.

Meanwhile, it’s not just consumer demand looking hot.

Here’s a nice look at industrial production.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at