Prime Minister Shinzo Abe likes to say Japan is back in business. His case got a big boost Thursday with news that the country's biggest initial public offering this century — the ¥12.6 trillion listing of behemoth Japan Post — will go ahead this November. The share sale isn't just a sign that change is afoot in the Japanese economy: It should help propel that process.
Japan Post's long journey to the private sector began in 2001 when Junichiro Koizumi, Abe's mentor, was prime minister. In his drive to end the cronyism and complacency that plagued the economy, Koizumi went right to the source: the savings institution within a postal system that then employed over 400,000 people. Japan Post was the piggy bank that wayward politicians used to fund pet projects, many of them white elephants, which helped feed an explosion in public debt.
The privatization couldn't have come at a more opportune moment. Even Nobel laureate Paul Krugman, an early "Abenomics" cheerleader, said last week that he's "really, really worried" about Japan's chances of ending its two-decade slump. The hope is that the listing, which will be targeted at individual Japanese, will encourage households to invest more of their savings. Perhaps more importantly, it could enliven the country's stagnant banking sector.