They've fired a big cannon that creates asset price inflation without the necessary structural reforms"
-Paul Guest, head of Asia research at LaSalle investment management
Measures done by Japanese Prime Minister Shinzo Abe and the new Governor of the Bank of Japan Haruhiko Kuroda have already shifted the economy into a positive cycle with the gradual expansion of corporate production and an improvement in unemployment. Basically, Abenomics is made up of quantitative easing, stimulus and inflation target. All three components were already introduced and announced, pushing consumer to a five-year high in April. As a result, average household spending in March rose 5.2% from a year before in price-adjusted real terms, posting the sharpest growth in about nine years since February 2004. However, the focus is now set to shift to whether Shinzo Abe's economic policy will be able to sustain the momentum to return the nation to a path of steady economic growth.
"The policies being implemented at the moment are generally seen as positive for real estate," Andy Hurfurt, head of investment consulting at CBRE in Tokyo, told the paper. "To a degree the BoJ is telling people that they are going to underwrite the J-REIT market."
"They've fired a big cannon that creates asset price inflation without the necessary structural reforms," Paul Guest, head of Asia research at LaSalle investment management, said. "The single biggest worry is that this is a flash in the pan."
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