[techtivist]

Here's the biggest underlying problem. Contrary to what one would expect, Japanese firms are actually flush with money, but due to Abenomics, the weakness of Yen means they are investing more and more abroad, rather than putting the resources in improving its own infrastructure. We all know about Softbank's recent investments in India and South East Asia. And it's not just limited to Tech or even the private sector, even infra firms are investing in troves abroad, especially in South East Asia. In a way the Japanese growth rate doesn't take into account the rent its entities are receiving from abroad. So the short term picture might actually be rosier than the numbers of would suggest.

The bigger problem is actually long term weaknesses that this trend will expose.

Another huge problem is consumer lending. Most Japanese banks are actually pretty stringent when it comes to lending to their own people. So even if low interest rates might encourage consumer borrowing appetite, there's very little supply out there. I think the PM and the central bank needs to address these, even if loosening lending might be contrary to what Japan has done in the past.

[jvm]

> the weakness of Yen means they are investing more and more abroad

Shouldn't a weak yen make it cheaper to invest at home relative to abroad? What's the mechanism that causes the opposite effect?

[tsotha]

If your investment generates profit you'd rather have that profit in USD or Euro than a weak yen, particularly if the yen is weaker when the investment pays off than when you invest.

[jim_greco]

Japanese companies are flush with money, but the problem is demand and not supply. Japan has an declining population and even faster declining working age population. Combine this with the sales tax increase and a slowdown in China and you have a lot of headwinds facing their economy. Companies in the rich world are investing abroad because there are just a lot better opportunities for growth abroad.

Abenomics is attempting to stimulate demand through a combination of fiscal stimulus (direct demand from the Government) and monetary stimulus (long term interest rates unattractive make local investments more attractive). A weak Yen is actually great for Japan as it's a net exporting country.