BIG COMPANIES RELUCTANT TO INCREASE INVESTMENTS
Although big companies have benefitted from the BOJ's large scale monetary easing and the central bank adopting a series of policies to create a better investment environment, they prefer to hold cash and securities and not follow the prime minister's plan to increase their investments.
According to government data, the investment growth by Japanese big enterprises in the last quarter in 2015 was negligible, compared to the third quarter, but in the meantime, capital and securities held by the companies rose 3.7 percent and 4 percent respectively.
Another survey showed that compared to a decade ago, the amount of capital held by big companies increased 32.4 percent in fiscal 2015, while their investment in permanent assets only grew 16.3 percent during the same period.
The only reason for the backward trend is that the "Abenomics" has not yet helped restore prosperity in business circles, which is still impacted by weak exports and domestic demand punctuated by prolonged deflation.
Meanwhile, big companies also maintain that the depreciation of the Japanese yen is not enough for them to give up their overseas production systems and reproduce them in Japan, as the yen could appreciate at any time.
Recent facts have proved their choices correct. According to a Japanese finance ministry survey, Japanese enterprises' investment are expected to drop by 6.6 percent due to the fast appreciation of the yen and the plunge in the stock market.
THE PUBLIC FEELS NO BENEFIT FROM "ABENOMICS"
Since the introduction of "Abenomics" in early 2013, the prime minister never adopted a crucial policy to address Japan's economic structural problem of weak demand and more social welfare expenditure brought about by the country's rapidly aging society.
A middle aged female going by the name Kojima told Xinhua that she is reluctant to spend money due to her worries about her pension in the future. "The government hasn't fixed the problem yet," she said, "the number of young people are declining, which means people who pay the endowment insurance are declining."
Meanwhile, the big companies that have benefitted greatly from "Abenomics" also neglected the government's constant urge to raise employees' salaries. The world's top automaker Toyota agreed to raise monthly payment to its employees by 1,500 yen (about 13.7 U.S. dollars) and Panasonic also made a similar decision.
Without income increases and with another planned consumption tax hike, households remain under a critical financial burden. "Salaries and bonuses are frozen, which means consumption will be further stifled, which will continue to drive the economy in the wrong direction," said McLellan, adding that "coupled with this, the planned further tax hike is contributing to households becoming increasingly unwilling to spend."
A recent national survey by Japan's Kyodo News showed that 81.4 percent of respondents did not feel the economic improvement from "Abenomics" and 64.6 percent of the Japanese public oppose the sales tax rate from 8 percent to 10 percent planned for April 2017.
