This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Abenomics Must Succeed With Fiscal, Monetary And Growth Policies To Boost Economy, According To Mellon Capital

Stocks in this article: BK









NEW YORK and LONDON, May 13, 2013 /PRNewswire/ -- Japanese Prime Minister Shinzo Abe's economic agenda must succeed on three fronts -- fiscal, monetary and growth policies  --  to generate a lasting positive effect on that nation's economy, according to a white paper from Mellon Capital Management Corporation, the San Francisco-based global multi-asset manager for BNY Mellon.

Mellon Capital also cautioned that this agenda could affect the performance of various asset classes.

"The extensive liquidity injections by the Bank of Japan and the economic growth initiatives and reforms announced by the new Japanese government continue to have a significant impact on the relative performance of asset classes and local markets around the world," said Vassilis Dagioglu, managing director of asset allocation portfolio management at Mellon Capital. "Investors should study the effects of such policies when making asset allocation decisions."

Regarding the challenge facing the Japanese economy, Sam Valtenbergs, senior quantitative analyst at Mellon Capital and author of the report, said, "Just getting one or two policy initiatives right will not be enough to generate a lasting, positive effect on the Japanese economy. The perceptions of both Japanese and non-domestic stakeholders must be changed so the country attracts foreign investment.  This includes instilling confidence that assets will rise and firms can compete globally."

The Mellon Capital report, Abenomics: A Final Roll of the Dice, notes that the Abe administration needs a flexible fiscal policy that accelerates public works projects, an easing monetary policy that achieves an inflation rate of two percent, and a growth strategy focused on deregulation, tax reform and immigration reform.

The depreciating yen and economic stimulus resulting from Abe's policies have been reflected by a sharp uptick in the forward looking earnings revisions of analysts for the TOPIX, the Tokyo Stock Price Index, the report said.  However, the report also cautions that Japanese stocks are overvalued on a fundamental basis and further upward earnings revisions would be required before Japanese equities become attractive to Mellon Capital.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs