Abenomics? How About Kurodanomics?

Despite all Prime Minister Shinzo Abe has done, Japan’s economy contracted an annualized 1.4 percent in the final three months of 2015, the government announced on Feb. 15. Consumer prices rose just 0.2 percent year to year, perilously close to deflation. Japanese consumers, hurt by tepid growth in wages and bonuses and a 3 percentage point rise in the consumption tax in 2014, are holding on to their wallets, with private consumption dropping 0.8 percent in the quarter.

The yen has gained 5.6 percent against the dollar since the start of the year, eroding profits for exporters such as Toyota Motor and Panasonic. These companies have benefited from the yen’s weakness since the prime minister came to office in late 2012 and began the policy changes known as Abenomics.