This week Shinzo Abe loosed the ‘third arrow’ of his strategy to revive Japan’s economy. If you missed the resounding thwack as it triumphantly hit the target, that is because there was none. When it comes to structural reform, the Japanese prime minister is less like William Tell, splitting the apple asunder in one go. Instead, he more resembles an apprentice acupuncturist piercing the body politic with 1,000 needles in the hope that one or two might actually do the trick.

For those who have forgotten, the third arrow is meant to raise Japan’s potential growth rate. Because the workforce is shrinking by 0.5pc a year, nearly all growth must come from productivity gains. Something might also be done to make up the numbers by increasing levels of worker participation, particularly of women and pensioners, and (in theory) by bringing in more immigrants. Without action, Japan is doomed to an insipid growth rate of about 0.5-1pc.

Mr Abe’s third arrow - or ‘thousand trial needles’, as I prefer to call it - is meant to compliment his monetary and fiscal policy. These two arrows have been fired with more aplomb and reasonable effect. A promise to double the monetary base and to hit an inflation target of 2pc in about two years has jolted prices into life. Core inflation in April (minus the effect of a consumption tax rise) was running at an increased rate of 1.5pc, albeit largely because of higher imported energy prices as a result of a weaker yen. Still, this month, Uniqlo, a Japanese clothing company famous for being cheap, is putting prices up across the board by 5pc, a possible talisman of growing corporate pricing power.

Mr Abe is cutting corporate taxes with the aim of attracting more investment. At 35pc, the rate is high. Yet it is not necessarily a great idea to give tax breaks to cash-flush companies when relying on hard-pressed consumers to spend

The second arrow of fiscal flexibility has also flown fairly straight. Last year $110bn of extra spending helped nudge growth past 1.5pc. This year, Japan appears to have weathered a rise in consumption tax in April from 5 to 8pc, which some feared could slam the economy back into recession. Certainly it is likely to contract this quarter. Yet this is unlikely to cancel out growth in the first quarter of a whopping 6.7pc (on an annualised basis) as shoppers front-loaded purchases.

If the first two parts of Abenomics are having some success, what can we expect of the third? The answer is less than Mr Abe hopes but more than sceptics expect. Some of his needles will probably do no good. A few may do harm. But at least some will have a positive impact.

Mr Abe has chosen to prod a few areas marked ‘corporate reform’. Among the stipulations of a new governance code, companies will be required to explain the way they appoint and train directors. (They will also have to report progress on promoting women.) Meanwhile, the Government Pension Investment Fund, with a hefty $1.2tn in assets, is starting to switch some funds into the JPX-Nikkei 400, an index designed to promote profitable, shareholder-friendly companies. The point of all this is to encourage corporate management to treat shareholders better. Though no panacea, this is a useful ambition given that companies are hoarding cash worth nearly half of national output. Getting them to distribute it might help economic activity.

Other needles have been placed more haphazardly. Mr Abe is cutting corporate taxes with the aim of attracting more investment. At 35pc, the rate is high. Yet it is not necessarily a great idea to give tax breaks to cash-flush companies when relying on hard-pressed consumers to spend. Then there is labour reform. Mr Abe has placed this needle very gingerly, though that may be no terrible thing. With nearly 40pc of labour in the low-paid, temporary sector of the workforce, simply making it easier to fire workers is not likely to do a great deal of good. Labour reform needs to be more comprehensive.

Another of Mr Abe’s needles is aimed at agriculture. Loosening rules on ownership of land and breaking the stranglehold of the conservative agricultural co-operatives, as he intends, may help. But the most potent needle - the Trans-Pacific Partnership - is not Mr Abe’s to wield. Unless US President Barack Obama can get fast-track authority to negotiate a deal, it is all but dead.

Talking up women in the workforce is also useful, though it would be a lot more effective if the needle marked ‘end tax disincentives for women’ were employed. Mr Abe this week suggested it might be. He should also be bolder with his ‘immigration’ needle. Here he has grown queasy at the sight of blood. Lack of public support for immigration has led him to back off.

Still, the needles he has used may do some good. Jesper Koll of JPMorgan, a man who admittedly once described himself as ‘Japan’s last optimist’, says that, if the government follows through, it could lift the potential growth rate from the 0.8pc he estimates currently to 1.5pc in the medium term. The idea that Mr Abe can nearly double potential growth looks a tad hopeful. But at least he is having a stab at it.

Published in Dawn, Economic & Business, June 23rd, 2014