Mr Wang points out that as of 2014 the country’s household sector’s financial net worth stood at 280 per cent of GDP, one of the highest levels globally and above the comparable figure in the US (260 per cent).
He adds: “Japan’s economy has effectively become similar in position to a wealthy, ageing rentier, living off years of accumulated savings. The country’s strong balance sheet position allows the government room to experiment as it aims to change the deflationary mindset of an entire population and stimulate private demand.”
So far this balance sheet has given Mr Abe and the central bank room to manoeuvre, but with potential global headwinds such as the US presidential election and Brexit on the horizon, the time for experimentation may be running out.
Nyree Stewart is features editor at Investment Adviser
