The Genius of Abenomics Emerged Long After Abe

And the winner of the Japanese leadership contest is... Shinzo Abe. Political expediency and the economics of the pandemic era mean any major departure from the former premier's eponymous policies is becoming increasingly unlikely. Yoshihide Suga, whose year in office was an asterisk to Abe, relinquished the reins last month, and the race is on to find his successor.

While “Abenomics” means different things to different people, the main prongs have always been fiscal expansion, monetary loosening to dispel the threat of deflation, and cutting down the red tape that’s perceived to stymie business. Japan's stop-start recovery makes it almost inconceivable that fiscal stimulus will end anytime soon. The three contenders to lead the ruling Liberal Democratic Party — Taro Kono, Sanae Takaichi and Fumio Kishida — all favor some form of further budget largesse, not least because a general election is also approaching. Any meaningful reduction in monetary accommodation is even less realistic. Near-zero rates and quantitative easing have been part of Japan’s toolkit for decades, long before they were wheeled out in the West to fight the global financial crisis and the pandemic recession.