In its recent strategy note, Credit Suisse has highlighted the pessimistic case surrounding Shinzo Abe's third arrow of reform. Firstly, Japanese corporates suffer from significant governance problems which have resulted in underperforming boards and executives that have failed to push for share price growth. Secondly, economic constraints in Japan are also significant as major labour reforms are needed in order to boost productivity and to phase out zombie industries. Credit Suisse also points to several positives, however, including the belief that the government is likely to address these unpopular policies even before the Upper House elections. (VIEW LINK)
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