Will the third time be a charm for Abenomics? On Sunday, Shinzo Abe won his third electoral mandate to awaken Japan’s comatose economy. After squandering the previous two — in 2013 and 2014 — all we can do is hope the prime minister finally makes good on his structural reform pledges.

The good news is that markets are already prodding Abe to change tactics in one very important way: drop this weak-yen silliness. He’d be wise to run with it.

Already, Abe’s Liberal Democratic Party seems to be sticking with its embrace of Albert Einstein’s definition of insanity by trying the same tired strategies and hoping for a different outcome. The giant stimulus package Abe is promising with high-speed trains and new construction projects may provide a short-term sugar high, but will do nothing to make Japan more vibrant and competitive in the longer run. Ditto for Abe’s obsession with amending the pacifist post-war constitution so Japan can send troops aboard.

The yen’s 16 percent surge this year is another story. It’s gone a long way to reversing a counterproductive devaluation. Early on, the weak yen pumped up corporate profits and Nikkei shares. Abe thought that would be enough to get executives to fatten paychecks, up investments and unleash a virtuous cycle of trickle-down growth. But 1,294 days on, incomes are stagnant, households and businesses are downbeat, Japan is skirting another recession and market turbulence is undoing Abe’s worst-laid plans. Worse, because his yen policies have achieved exactly the opposite of what Abe intended.

Rather than a problem, the yen’s about-face is a chance for a major reboot. Already, there’s talk of selling yen or the Bank of Japan driving interest rates further into negative territory. But here are three ways a stronger currency could give Abenomics 3.0 a shot at succeeding.

One: Nudging executive to do their jobs. Just as in 2004, when Tokyo spent the annual gross domestic product of Indonesia lowering the yen, Tokyo’s devaluation gambit enabled complacency. The yen’s drop since 2012 amounted to a giant corporate welfare program that took the onus off exporters to innovate and restructure. Even chronic slackers like Sony suddenly found themselves in the black. Not because chief executive officer Kazuo Hirai churned out new game-changing products. Not because the bloated has-been that once dreamed up the Walkman and redefined electronics with the transistor radio rediscovered its creative mojo to take on Apple’s iPhones and iPads. And not because Sony raised productivity or ended the notorious infighting between departments. It’s all about the yen.

A rising currency would pressure Japan Inc. to take a page form Germany. Even when the deutschemark of old or the euro was strong, exporters didn’t whine and lobby for currency welfare. Germany adapted and innovated, using exchange rates as an excuse to shake up industries in ways Japan Inc. is still fighting. In truth, Abenomics these last three-and-a-half years did more to threaten Japan’s competitiveness than gin up GDP. It’s been a lost period for companies raising their games and has made them even less likely to raise wages — or even ensure Japan can maintain current levels. And sadly, Abe’s done zero to unleash a startup boom to create new jobs.

Two: Empowering Japan Inc. to expand abroad. Oddly, Japan’s biggest economic challenge — an aging, shrinking population — wasn’t even mentioned going into Sunday’s election. The mere suggestion that Asia’s No. 2 economy should welcome foreign talent is so taboo that Abe’s LDP and the opposition pretend the problem doesn’t exist. A dearth of growth opportunities at home has companies from Toyota to Fast Retailing, maker of the Uniqlo brand, tapping faster-growing overseas markets.

Unlike the overseas expansion of the 1980s, this time is about necessity and pragmatic calculation. The purchases of the ’80s were of the trophy variety: California’s Pebble Beach golf course and Universal Studios, New York’s Rockefeller Center and every Monet, Picasso and Warhol executives could grab at auction. This time it’s about going where the growth is, be it India, the Philippines or the U.S. NTT Data and Asahi Group are among those hammering out the details of some $23 billion overseas acquisitions.

Still, Abe’s yen debasement limited options. Now, as the currency rises, so are companies’ purchasing power. True, it’d be best if these jobs stayed at home — and they might’ve, had Abe used previous election mandates to enliven the economy. But the more Japan’s stays focused on a shrinking market, the most domestic employment rolls and profits will fall anyway.

Three: Reducing the odds of a currency war. As Donald Trump rails against China’s trade policies, Tokyo is alarmed to hear the U.S. presidential candidate conflating Tokyo with Beijing. Japan asked for it, though, manipulating the yen at the expense of growth elsewhere. What’s more, it’s giving China political cover to weaken the yuan as its growth trajectory darkens. The yuan fell to its lowest levels since 2010 after the United Kingdom voted to leave the European Union. Odds are, it has much further to go. China must be careful, of course. A big devaluation might shock markets, just as in August 2015. It could lead to defaults on dollar loans.

It’s hard for the Group of Seven to criticize currency manipulation in Beijing, Seoul and elsewhere when one of its own members does it. A rising yen gives the G-7 — and, yes, a future President Trump — more latitude to bash blatant beggar-thy-neighbor policies. Given the fragile state of world markets, the last thing we need is another race to the bottom between Asia’s two big economic powers.

There are other ancillary benefits. A rising yen means Japan can import energy more cheaply at a time when virtually all of its nuclear power plants are offline. It’s also a sign of confidence, one that attracts more foreign capital, supports stocks and bond markets in the long run. A weak yen, by contrast, screams insecurity about a developed nation’s ability to generate growth organically and sustainably.

The biggest would be Abenomics reversing a policy that’s done more harm than good. The important question, of course, is will Abe follow markets’ lead and let the yen rise? Perhaps not, given his preference for corporate welfare over altering Japan’s playbook. But as Abenomics approaches the four-year mark, Tokyo is opting for Einstein over Joseph Schumpeter’s creative destruction. Markets are telling Abe to drop this weak-yen insanity. He’d be wise to listen.

Based in Tokyo, William Pesek is executive editor of Barron’s Asia and writes on Asian economics. www.barronsasia.com

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