Japan needs a double dose of monetary and fiscal stimulus, including further easing by the central bank next month, says Etsuro Honda, one of Prime Minister Shinzo Abe's economic advisers.
Honda, one of the architects of Abenomics, Abe's economic policy based on "three arrows," said fiscal restraint limited the effectiveness of the Bank of Japan's radical monetary easing, and is the biggest reason inflation has not risen to the central bank's 2 percent target despite more than three years of aggressive easing under Gov. Haruhiko Kuroda.
He said he told Abe during a meeting in Tokyo on Sept. 28 that monetary and fiscal policy should be managed in a unified manner.