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15 Dec 2014
Global impact of Abenomics – Nomura
FXStreet (Barcelona) - Research Analysts at Nomura note that the success or failure of Abenomics would have very disparate impacts on the rest of the world.
Key Quotes
“We select a mix of 19 advanced and emerging economies and consider the two extreme outcomes: Abenomics is a resounding success or a complete failure. Our results show that, in either case, the rest of Asia is affected most.”
“If Abenomics is a resounding success, the top ten economies to benefit are all in Asia, led by Malaysia, Singapore, Thailand, Taiwan and the Philippines, but the benefits to China and India are relatively small. It is interesting that Southeast Asia benefits the most. The boost to long-run GDP growth could be as much as 1.0 percentage point (pp) for Malaysia and 0.9pp for Singapore and Thailand. The impact on big, advanced economies, such as the US, Germany and the UK, is negligible.”
“On the other hand, if Abenomics is a complete failure, the rest of Asia is hurt most, led by Malaysia, Taiwan and Thailand, due mostly to the Japanese domestic demand and yen exchange rate channels. The economies hurt least are mostly outside Asia (India is a clear exception), mainly because these economies are less exposed to Japanese domestic demand.”
Key Quotes
“We select a mix of 19 advanced and emerging economies and consider the two extreme outcomes: Abenomics is a resounding success or a complete failure. Our results show that, in either case, the rest of Asia is affected most.”
“If Abenomics is a resounding success, the top ten economies to benefit are all in Asia, led by Malaysia, Singapore, Thailand, Taiwan and the Philippines, but the benefits to China and India are relatively small. It is interesting that Southeast Asia benefits the most. The boost to long-run GDP growth could be as much as 1.0 percentage point (pp) for Malaysia and 0.9pp for Singapore and Thailand. The impact on big, advanced economies, such as the US, Germany and the UK, is negligible.”
“On the other hand, if Abenomics is a complete failure, the rest of Asia is hurt most, led by Malaysia, Taiwan and Thailand, due mostly to the Japanese domestic demand and yen exchange rate channels. The economies hurt least are mostly outside Asia (India is a clear exception), mainly because these economies are less exposed to Japanese domestic demand.”