International Partners: Despite recent data showing that Japan’s economy shrank less than previously thought last quarter, the country’s central bank, the Bank of Japan (BoJ) is facing a growing clamor to inject more stimulus in the form of further quantitative easing.

According to the Cabinet Office, the world’s third biggest economy contracted by 0.3% in the second quarter (April – June) slightly less than the 0.4% contraction reported earlier and beating forecasts for an upward revision to 0.5% but still disappointing enough for investors to call for an expansion of the bank’s already highly-controversial quantitative easing program.

So-called “Abenomics”, Prime Minister Shinzo Abe’s plan for reinvigorating the Japanese economy after 20 years of deflation, is being criticized for its apparent lack of success in kick starting meaningful growth and a failure to achieve the BoJ’s 2% per annum inflation target.

“The BoJ has thrown everything but the kitchen sink at the problem but with anemic demand and consumer spending at home as well as sluggish growth abroad in Japan’s export markets, the near-term looks particularly challenging,” said Mayumi Sheppers, Asian Capital Markets strategist at International Partners.

“Because of the relative absence of the Japanese consumer, hopes for a recovery in domestic demand from capital investment and household spending are fading and this raises the prospect of an extraordinary budget that could include unprecedented fiscal stimulus from the government,” said Sheppers.

International Partners says it sees the BoJ adding to stimulus. “Japanese stocks have taken something of a lead from China’s stock market woes of late. They’ve given back much of what they gained this year but we’re confident that the extra stimulus – when it comes – will ensure a resumption of their upward trajectory so we’re positioning our clients accordingly,” concluded Sheppers.

About International Partners
International Partners understands that only a plan that's personally focused can help you navigate an investment environment that's become increasingly complex and volatile.

Their investment plans are designed to consider – among other matters – your short-term cash-flow requirements, time horizons, your retirement plans and any gifting or legacy aspirations you may have. Planning of this precision can only be effected by a personalized approach and this means that yours will be a tailor-made, bespoke plan that will be of no use to anybody else.

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