Few people now doubt the Bank of Japan’s ability to reflate the economy, after five months of surging share prices, a weakening yen and dwindling bond yields. But Shinzo Abe, the prime minister, won the election in December promising more than that.
Abenomics was sold as a three-pillar deal that would deliver monetary easing, fiscal stimulus and private-sector reforms. So far, only the monetary pillar is in play, with the central bank aiming to achieve 2% inflation by doubling its monetary base and total assets by the end of 2014.
The lack of momentum on the other pillars could mean that Japan will generate inflation and not...
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