While capital spending has been the main driver of growth, we're going to see the consumer start to play a larger role. Growth led by consumer spending will increase the stability of the recovery.
People's sentiment is changing. They don't mind spending more for attractive goods.
It's unlikely that the next administration will stray far from pursuing structural reforms. Even if the Democratic Party of Japan takes power, they will continue to push for fiscal reform.
The market has already priced in an imminent move.
Companies have a lot of free cash now. That provides a big buffer.
With Japanese consumers spending again, we could be looking at the start of the longest period of economic expansion in Japan since World War II. This is something that is going to be felt around the world.
In terms of timing, March is not necessarily ideal.
The data support the case for an early hike in interest rates. It could happen in July at the earliest.
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