Japan's economy has improved dramatically since November 14, 2012, when Abe's unpopular predecessor, Toshihiko Noda, announced snap elections. That vaulted Abe into pole position and prompted investors to price in the effects of his promises of massive govt debt purchases by central bank & hefty govt spending.
Also Read: Verdict on Abenomics, one year on
Growth in the world's third-biggest economy decelerated in the third quarter after leading the Group of Seven industrial powers in the first half of the year, as capital spending, personal consumption and exports moderated, a Reuters survey indicates.
Gross domestic product data at 8:50 am on Thursday (2350 GMT on Wednesday) is set to highlight the early successes of Abe's aggressive monetary and fiscal easing in buoying exports and consumer spending.
But it will also underscore the difficulties of translating the feel-good factor surrounding these successes into increases in business investment or higher wages, which would indicate corporate Japan sees a longer-term pick up in the economy.
GDP expanded at an annualised clip of 1.6 percent in the July-September quarter, the Reuters survey of economists shows, a reasonable showing but well below the April-June rate of 2.6 percent and the first quarter's 3.8 percent.
Japan's economy has improved dramatically since November 14, 2012, when Abe's unpopular predecessor, Toshihiko Noda, announced snap elections. That vaulted Abe into pole position and prompted investors to price in the effects of his promises of massive government debt purchases by the central bank, hefty government spending and steps to bolster longer-term growth.
Tokyo shares are up 68 percent in that 12 months and the yen has slid 19 percent, helping Japan's exporters and creating a wealth effect that has altered domestic and global psychology about Japan.
But those market gains essentially stalled in May, and scepticism is growing that Abe can deliver the tough decisions that would set Japan's economy on a more sustainable growth path; for example, by letting companies fire workers more freely to open up a new dynamism in the sclerotic labour market.
Growth will quickly rebound as shoppers rush to spend before a national sales tax is increased to 8 percent from 5 percent in April, economists say. But Abenomics is struggling to gain traction on key areas that would indicate longer-lasting changes to the economy, such as capital spending and wage growth.
Core machinery orders, a key predictor of spending on factories, equipment and software, fell more than expected in September, data showed on Wednesday. A Bank of Japan (BOJ) policymaker warned of headwinds from soft overseas growth, underscoring the challenges facing Abenomics.
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