Indeed, looking at examples of structural reform overseas, there seem to be many cases where there was a deflationary impact in the short term.
And, in contrast with the US and UK, the economy cannot expect to receive additional ‘dividends’ such as a substantial decline in long-term interest rates accompanying fiscal consolidation, since in Japan there is little room for any further decline in interest rates. However, the bond market is not the only market which assesses structural reform.