When Shinzo Abe returned to office in December 2012, Japan’s economy had been stagnant for more than two decades. Deflation was entrenched, wages were flat, and confidence was low both at home and abroad. His response was bold: a program of policies known as Abenomics, built on three “arrows”—aggressive monetary easing, flexible fiscal stimulus, and structural reform. The goal was not only to boost growth but also to change the psychology of a country resigned to decline. More than a decade later, Abenomics left a record that, while imperfect, delivered clear positives.

One of the most significant successes was the fight against deflation. For years, falling or stagnant prices had discouraged households from spending and businesses from investing. The Bank of Japan’s massive monetary stimulus under Abenomics reversed expectations. Inflation rarely reached the 2 percent target, but consumer prices began to rise modestly, ending the cycle of decline. This mattered as much for psychology as for economics: people started believing in growth again.

Financial markets reflected this shift almost immediately. The Nikkei 225, which hovered around 10,000 when Abe took office, surged past 22,000 by 2018. The rally restored household wealth, drew back foreign investors, and lifted corporate confidence. Exporters benefited as well. A weaker yen made Japanese goods more competitive abroad, and firms like Toyota reported record profits—over ¥2.4 trillion ($22 billion) in 2017 alone. With stronger earnings, companies increased dividends, buybacks, and reinvestment in innovation.

The labor market also saw a dramatic turnaround. Unemployment, 4.3 percent in 2012, fell to about 2.4 percent by 2019—the lowest in decades. Equally striking was the rise in labor participation. Nearly three million women entered the workforce during Abe’s tenure, reflecting his push for “womenomics.” By 2019, Japan’s female employment rate had surpassed that of the United States. Elderly workers, too, stayed active longer, helping offset demographic decline. Wage growth lagged behind expectations, but the sheer strength of job creation gave households new stability.

Structural reforms, the third arrow, were less visible but still meaningful. Corporate governance rules encouraged greater transparency and stronger shareholder rights. Japanese firms, once notorious for hoarding cash, began returning more value to investors. Social reforms expanded childcare and promoted more flexible work, supporting women in the workforce. While slow to unfold, these shifts laid important foundations for longer-term change.

Critics note the shortcomings. Japan’s public debt ballooned to more than 230 percent of GDP, and the Bank of Japan’s balance sheet swelled to unprecedented levels. Inflation goals were consistently missed, and productivity growth remained weak. Structural reforms did not fully overcome rigid labor practices or address the costs of an aging population.

Still, to dwell on what Abenomics did not achieve is to miss what it did. The program revitalized markets, restored investor faith, expanded employment, and ended the mindset of perpetual decline. Between 2012 and 2019, Japan created over four million jobs, doubled its stock market, and pushed corporate earnings to record highs. In my view, the greatest legacy of Abenomics is the sense of possibility it revived. Japan had been written off as a case study in economic stagnation. Abe proved that determined leadership and coordinated policy could change the narrative. While challenges remain, Abenomics left Japan stronger, more confident, and better positioned for the future—a record that deserves recognition as one of the most ambitious and successful economic experiments of the 21st century. 

By Seoyoung Lee