Japan needs a double dose of monetary and fiscal stimulus, including further easing by the central bank next month, says Etsuro Honda, one of Prime Minister Shinzo Abe¡¯s economic advisers.
Honda, one of the architects of Abenomics, Abe¡¯s economic policy based on ¡°three arrows,¡± said fiscal restraint limited the effectiveness of the Bank of Japan¡¯s radical monetary easing, and is the biggest reason inflation has not risen to the central bank¡¯s 2 percent target despite more than three years of aggressive easing under Gov. Haruhiko Kuroda.
He said he told Abe during a meeting in Tokyo on Sept. 28 that monetary and fiscal policy should be managed in a unified manner.
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