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Definition – What does Abenomics mean?

Abenomics refers to the economic policy introduced by Japanese Prime Minister, Shinzo Abe. Abenomics is made up of quantitative easing, stimulus and inflation targets. Abenomics is an attempt to jumpstart the Japanese economy after several decades of minimal growth and overall deflation.

ForexTerms explains Abenomics

Other countries have criticized Japan for implementing Abenomics, arguing that it is a not-so-subtle attempt to depreciate the Japanese yen against other currencies. Although Abenomics isn’t in place yet, the yen has depreciated due to the announcement. Japan’s economy is largely export driven, so a depreciation of the yen is good for many of its largest companies like Toyota and Sony. The risk is that Abenomics could set off a currency war. That said, many other countries have used quantitative easing and inflation targets in the past – and many still do so.

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