Abenomics gets a lift – BTMU

FXStreet (Barcelona) - With resignation of Akira Banzai as head of JA-Zenchu, the largest farm lobby group in Japan, and also a big opponent of PM Abe, Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, believes that this gives ‘Abenomics’ a lift.

Key Quotes

“A potentially important development took place yesterday in Japan with the resignation of Akira Banzai as head of JA-Zenchu, the largest farm lobby group in Japan and a big opponent of the TPP trade deal currently being negotiated between a number of countries including Japan and the US.”

“Zenchu was also generally an opponent of much of the reform PM Abe is trying to implement across the agricultural sector. The resignation was triggered after the government submitted a bill to the Diet diluting the powers of Zenchu that PM Abe sees as important in reforming the sector.”

“By weakening Zenchu, the government hopes to encourage greater competition by breaking the resistance to removing barriers to trade and create a greater willingness for change and reform.”

“But the resignation may also be a sign that Akira Banzai sees what’s coming next – perhaps finally a deal on TPP.”

“PM Abe will visit President Obama in the US later this month with TPP one of the topics of discussion.”

“Progress on “Abenomics” reform will certainly help support USD/JPY over the coming months.”