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Business News

Japan's Shinzo Abe hails victory over 'death' of deflation

Abe fires 'Third Arrow' to stimulate economic growth in Japan

Japanese deflation which eclipsed economic growth for the past 15 years is dead, the country’s prime minister declared.

“Through bold monetary policy, flexible fiscal policy and the growth strategy we have reached a stage where there is no deflation,” Shinzo Abe, 59, said.

Economic policies to promote growth including the first sales tax rise since 1977 would continue to thwart deflation, he said. “This was an extremely difficult time for management of the economy, but I believe we are somehow able to overcome it,” said Abe.

He was speaking as the Japanese government endorsed the so-called third arrow of its new policy which includes corporate tax cuts, trade liberalisation, special economic zones and bids to boost tourism.

But his plans received a muted reaction and the Tokyo stock market fell to lows of one week with the Nikkei down 0.7 per cent at 1260.83.