Mr Abe swept to power last month with promises to kickstart the economy and to force the Bank of Japan to take more aggressive action.
Japan's central bank yesterday announced plans to pump trillions of yen into the economy to encourage business and consumer spending.
It's also set a new inflation target of two percent.
With no guarantee of success, Mr Abe's push risks the central bank's hard won independence.
Correspondent: Karon Snowdon
Speakers: Masamichi Adachi, Senior Economist, JP Morgan Tokyo; Andrew Horden, Regional Economist, IMA-Asia
SNOWDON: Bank of Japan Governor Masaaki Shirakawa might just be hoping it was April already. That's when his term as Japan's monetary policy maker comes to an end.
With open tensions between the Bank and the new Abe government, it's unlikely his job will be renewed.
Masamichi Adachi is the senior economist with JP Morgan in Tokyo.
ADACHI: History taught us that we need an independent central bank which issues the currency. So Mr Abe tried to reduce the independence of the central bank and that's a little bit of concern for the long term consequences.
SNOWDON: The threat to the bank's independence - an accepted standard among advanced economies - has raised eyebrows internationally. This week, the German central bank chief criticised what he called government meddling in central banks in industrialised nations such as Japan and Hungary.
Andrew Horden is Regional Economist with IMA -Asia.
HORDEN: Well I think the central bank's independence has been completely compromised now and we can see that the central bank will become part of Prime Minister Abe's department as far as it is concerned.
SNOWDON: In the short term, Japan's situation calls perhaps for drastic action. Two decades of deflation have left consumers reluctant to spend, business moribund and banks reluctant to issue loans. A consistently strong currency on top of tensions with China and Europe's problems have hit exporters hard.
With interest rates at near zero, the bank is easing policy by spending 13 trillion dollars or 145 billion dollars a month, to buy government bonds and treasury bills, starting next January with no cut off date. It's raised its inflation target to two percent and this year's economic growth forecast to 2-point-3 percent, up from 1-point-6 percent.
Not easy targets says Andrew Horden.
HORDEN: Well I think that what you need to do is look at the statement and you can see that the Bank of Japan thinks it will be quite hard to achieve.
SNOWDON: So this really the government's target, isn't it - Prime Minister Shinzo Abe's target and and given that he may have a big wish list - But how realistic is it?
HORDEN: Well we can see from Abe he is clearly a risk taker, it's his second stint as Prime Minister and he's not going to be left wandering.
He's got this wish list in terms of infrastructure and increasing the level of inflation and you can see these polices will start to come through and will have an impact on the economy. I mean, we've already seen the stock market recover and the yen has plummetted down about ten percent as a result.
SNOWDON: What do you think these policy settings and Mr Abe's strong stance will do for his political standing?
HORDEN: It really depends how he plays this. He will get a lot of credit over the first 12 months. And in the end, that's part of the reason he's allowed the economy to grow stronger. What we're going to see around June is they're going to have Senate elections and Abe will require to get control of the Senate to get through legislation.
Currently, he only has control of the lower house so once he gets control of both houses he will be able to move forward with these policies. So his aim in the first 12 months will be to boost popularity, get control of the upper house and then move forward from there.
SNOWDON: There's much more to do to get Japan out of its slump.
Economist Masamichi Adachi says the Bank and government need to cooperate more on structural reform and to reassure consumers the economy can sustain reasonable growth without blowing out the world's biggest government debt further.
ADACHI: For example, the government definitely needs to establish a more reliable social security system that doesn't pose the threat to the fiscal balance in the future. And Japan needs to have a more flexible labour market especially for the core market, which means highly-educated people should be moving around the companies more frequently than in the current situation.