Recent economic data have mostly been positive, with industrial production and retail sales climbing to multi-year highs, and corporate profitability exceptionally strong. However, investors are eagerly waiting to see how sharply demand will slow following next month's consumption tax hike. There are certainly reasons for concern: wage growth remains sluggish, and the sales tax hike will further undermine household purchasing power. Meanwhile, the government seems to be exerting more energy antagonising its neighbours than implementing structural reforms. The jury is therefore still out on the overall success of Abenomics.
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