Goldman’s Matsui Sees Japan’s Economic Policy Stable This Year

Japanese leaders are unlikely to roll out major new economic policies to boost growth this year, according to Goldman Sachs Group Inc.

Officials who fought deflation last year through measures including quantitative easing, monetary stimulus and increased government spending will opt for policy stability, said Kathy Matsui, chief Japan strategist at the New York-based bank.

“This year, I don’t think you are going to get major bazooka-type policy announcements,” Matsui said in an interview to Bloomberg Radio today. “I think it is more a question of looking for the fundamental improvement both in the macro economy and corporate level.”

Japan has pledged to forge ahead with structural reforms designed to open business opportunities in industries from health care to agriculture as Prime Minister Shinzo Abe leads efforts to break the legacy of 15 years of deflation. The administration’s attempts helped propel Japan’s Topix index of shares up 51 percent last year, its best performance since 1999.

Abe’s stimulus program caused an 18 percent weakening in the yen against the dollar last year, helping exporters. The Japanese currency fell 0.1 percent to 102.79 per greenback as of 9:45 p.m. in Tokyo today, while the benchmark 10-year yield was at 0.63 percent compared with 0.745 percent a year earlier.

Matsui said the depreciation in yen is not completely beneficial to Japan as it increased the cost of growing fossil-fuel imports in the wake of nuclear-plant shutdowns. Japan reported a record annual trade deficit for 2013.

“The weaker the yen becomes the more expensive that fuel becomes, so it is not a unanimous positive for everybody,” she said. “Therefore, I think the currency at this kind of level anywhere from 100 or around 100 yen to a dollar is actually not too bad for most companies be they exporters or importers.”

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