Last week marked Prime Minister Fumio Kishida's first full year as the country's leader, which he began by pledging to turn the economy around by shifting to what he calls a “new form of capitalism.”

Yet the agenda has hardly moved forward, with his Cabinet facing daunting economic challenges in recent months, including inflation, the yen’s plummeting value against the dollar and the COVID-19 pandemic. Kishida has faced political headwinds too, such as dubious ties between his ruling Liberal Democratic Party and the controversial Unification Church.

“The Kishida administration has been preoccupied just responding to immediate issues over the past year,” said Daiju Aoki, chief Japan economist at UBS Sumi Trust Wealth Management.