Yoshihide Suga, the man who became Japan’s new prime minister on Wednesday, has a reputation as a tough, task-based micro manager rather than
a self-styled macroeconomic helmsman like Shinzo Abe.
Suga has vowed to stay true to Abenomics, but economists doubt there’s much more monetary pizazz to be squeezed out of the Bank of Japan or any more major spending splurges left in a public purse that’s already more reliant on debt than any other developed economy.
That leaves the third pillar of Abenomics, structural reform, as Suga’s best line of attack
for reshaping economic policy. Suga sees himself as a reformer who wants to bring Japan’s bureaucracy into the digital age and tackle thorny issues such as regulatory reform and administrative inefficiency.
“I’m optimistic because under Abenomics — and, of course, Suga was one of the major architects of it — they did just about everything they could do on macro policy,” said Robert Feldman, senior adviser at Morgan Stanley MUFG.
“Where Abenomics has been a little less aggressive has been on some of the structural reforms, this is an area where Suga is very eager to push forward.”