"This is an effect of Abenomics"
-Chief economist at Meiji Yasuda Life Insurance
The latest data published on Monday, is raising hope that the world's third largest economy is starting to pick up under the leadership of Shinzo Abe and Haruhiko Kuroda. Japan logged a modest pickup in factory output in March, with the manufacturing PMI jumping to 51.1, up from 50.4 a month earlier, while the factory output rose 0.2% from the previous month. The overall jobless rate stood at 4.1% in March, down 0.2 percentage points from the preceding month, and the lowest level since November 2008. Activity at retailers also improved, as retail sales reached -0.3% in March from a year earlier, and up from -2.2% in April.
Despite the overall improvement, some economists have warned that the new policies introduced by the Bank of Japan may not reflate the economy and could lead to bigger problems down the line. Critics of Abe's strategy raised questions whether the extra funding pumped into the economy will foster sustainable growth or just lead to the surge in share prices and other assets.
"Retail consumption is very strong," Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance, told Dow Jones Newswires. "Not only due to warmer temperatures in March, but also as gains in stocks and expectations for an economic recovery buoy spending... This is an effect of Abenomics."
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