“Rapid injection of capital is one thing, but long-term transformation of the business culture and labour practice is quite another.
“Behavioural norms that have been ingrained for decades will be difficult to uproot and [Mr] Abe will have to tread carefully in trying to ‘westernise’ practice while protecting what it is to be Japanese.”
He expects Mr Abe’s reforms will not be a “quick fix” and heralds the prime minister’s long-term approach.
“What is clear, though, is that [Mr] Abe is committed to seeing this through for the long term,” Mr Alexander continues.
“With a 68 per cent supermajority in the Lower and Upper House seats, [Mr] Abe has more support than any of the 18 previous leaders. This popularity will be pivotal in policy execution.
“If he is successful in his policy adoption, then Japan will provide a very fertile ground for investing during the longer term.”
Mr Sturkenboom questions whether the prime minister will maintain momentum in keeping the reform agenda on track and acknowledges that the political scandals have not helped in this regard.
He adds: “We still think he will push through what he promised, but perhaps it will happen just a little slower and maybe it will cost him a bit more political capital than before these things happened.”
Ellie Duncan is deputy features editor at Investment Adviser
