“First, in terms of politics, Amari's resignation may change Abe's intentions. An upper house election will be held around the middle of the year. There had been some talk that Abe would dissolve the lower house and call for snap elections at the same time. On the margins, this is now seen as less likely."
“Second, regarding Abenomics itself, which Amari was an important architect, it likely continues to struggle. A supplemental budget will make its way through the Diet over the next two months. The structural reforms that were associated with the "third arrow" appear to be taking place in a piecemeal fashion (…) On the margins, Amari's resignation may put more of a burden on monetary policy.”
“Third, Amari was the point man in negotiating TPP and responsible for steering it through the Diet over some domestic opposition. Here Amari's departure may be most keenly felt. Although the TPP negotiators are to meet next week and sign off on the agreement, several parliaments, including the US Congress need to approve it.”
“We do not see direct implications for the yen's exchange rate. As global markets have stabilized after the horrific first two and a half weeks of the year, the dollar has recovered from JPY116.00 to about JPY119.00. The price action has reinforced the importance of the JPY116 area, which is where the dollar also bottomed last August.”
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