In February 2013 Abe gave an address at the Centre for Strategic and International Studies in Washington, D.C., in which he explained his economic and diplomatic objectives, and that he had returned to the Prime Ministership to prevent Japan becoming a "Tier Two Nation", declaring that "Japan is back".
At the first meeting of the CEFP on 9 January 2013, Abe declared that the Bank of Japan should follow a policy of monetary easing with a view to achieving a target of 2 percent inflation. Abe maintained pressure on the Bank's governor, Masaaki Shirakawa, who was reluctant to set specific targets, into agreeing to the policy. In February, after Abe publicly speculated that the government could legislate to strip the bank of independence, Shirakawa announced he was leaving office prematurely before his term expired. Abe then appointed Haruhiko Kuroda as governor, who had previously advocated inflation targets, and who has pursued the government's policies of monetary easing.
In autumn 2013 Abe made the decision to proceed with the first stage of the increase in the consumption tax from 5 to 8 percent in April 2014 (with a second stage envisaged raising it to 10 percent in October 2015). The bill to raise the tax had been passed under the previous DPJ government, but the final decision lay with the Prime Minister. He and Finance Minister Tarō Asō explained that the tax would be increased to provide a "sustainable" basis for future social spending and to avoid the need to finance future stimulus by issuing government bonds. While this was expected to affect economic growth in the quarter following the rise, Abe also announced a 5 trillion yen stimulus package that aimed to mitigate any effects on economic revival. After the increase in April, Japan fell into recession during the second and third quarters of 2014, leading to Abe delaying the second stage of the tax rise until April 2017 and calling a snap election (see below). In response to the recession, Aso announced that the government would ask the Diet to pass a supplementary budget to fund a further stimulus package worth 2–3 trillion yen.
On 15 March 2013 Abe announced that Japan was entering negotiations to join the Trans-Pacific Partnership, this was interpreted by analysts as a means through which the government can enact reforms to liberalize certain sectors of the Japanese economy, most notably agriculture, and was criticized by farm lobbies and some sections of the LDP. Economist Yoshizaki Tatsuhiko described the TPP as having the potential to act as the "linchpin of Abe's economic revitalization strategy" by making Japan more competitive through free trade. In February 2015 the Abe government struck a deal to limit the power of the JA-Zenchu body to supervise and audit Japan's agricultural co-operatives, in a move designed to facilitate TPP negotiations, improve the competitiveness of Japan's farming sector and curtail the influence of the agriculture lobby.
Abe revealed the first measures related to the "third arrow" policies in June 2013, which included plans to establish deregulated economic zones and allow the sale of drugs online, but did not include substantial measures related to the labor market or business reform. These measures were less well-received than the first two arrows had been since Abe took office, with the stock market falling slightly and critics arguing that they lacked detail; The Economist, for example, judged the announcement a "misfire". Analysts did note, however, that Abe was waiting until after the July Upper House elections to reveal further details, to avoid an adverse reaction by voters to potentially unpopular reforms. At the annual meeting of the World Economic Forum in Davos in 2014 Abe announced that he was ready to act as a "drill bit" to break through the rock of vested interests and "red tape" to achieve structural reforms of the economy. He cited reforms of agriculture, energy and health sectors as evidence of this, and pledged to push forward with the TPP, a Japan–EU trade deal and tax, corporate governance and planning reforms.
In September 2013 Abe called for a "society in which all women can shine", setting a target that 30 percent of leadership positions should be held by women by 2020. Abe cited the "womenomics" ideas of Kathy Matsui that greater participation by women in the workforce, which is relatively low in Japan, especially in leadership roles, could improve Japan's GDP and potentially fertility rates, in spite of declining population figures. The Abe cabinet has introduced measures to expand childcare and legislation to force public and private organizations to publish data on the number of women they employ, and what positions they hold.
In November 2013 the Abe cabinet passed a bill to liberalize Japan's electricity market by abolishing price controls, breaking up regional monopolies, separating power transmission from generation by creating a national grid company. This move was partly in response to the 2011 Fukushima disaster, and the bill faced little opposition in the Diet. By March 2015, more than 500 companies had applied to the Economy Ministry to enter the electricity retail market and electricity industry is expected to be fully liberalised by 2016, with gas utilities following suit by 2017. Abe has also said he favors the re-building of Japan's nuclear reactors following the Fukushima disaster (though much of the authority to restart nuclear plants lies with local governments) and plans to strengthen relations with the United States.
In 2013 the Eurekahedge Japan Hedge Fund Index posted a record 28 percent return, which was credited to the unprecedented actions of the Abe government. In July 2015 the IMF reported that, while the structural reforms had "modestly" improved growth prospects, "further high-impact structural reforms are needed to lift growth" and prevent over-reliance on yen depreciation.
Abe's return to the Prime Ministership saw a renewed attempt to downplay Japan's wartime atrocities in school textbooks, an issue that had contributed to his earlier downfall. In 2013 Abe supported the creation of the Top Global University Project program. This is a ten-year program to increase international student attendance in Japanese universities and hire more foreign faculty. There is also funding for selected universities to create English-only undergraduate programs.
In September 2013, Abe intervened to aid Tokyo's bid to host the 2020 Summer Olympic and Paralympic Games, giving a speech in English at the IOC session in Buenos Aires, in which he extolled the role of sport in Japan and sought to reassure the committee that any ongoing issues with the Fukushima plant were under control. After the bid was successful, Abe sought to portray the games as symbolic of his Abenomics economic revitalization programme, saying "I want to make the Olympics a trigger for sweeping away 15 years of deflation and economic decline". In 2014 he said that he hoped a "robot olympics" would be held at the same time, to promote the robotics industry.
Relations between Japan and its immediate neighbors, China and South Korea, remained poor after Abe's return to the office. While he declared that the "doors are always open on my side", no bilateral meetings between Abe and the Chinese leadership took place for the first 23 months of his second term. Neither did Abe hold any meetings with President Park Geun-hye of Korea during his 2012–14 term of office. Both countries criticised Abe's visit Yasukuni Shrine in December 2013, with China's Foreign Minister describing the action as moving Japan in an "extremely dangerous" direction. In addition, China has continued to criticise Abe's defense reform policies, warning that Japan should not abandon its post-war policy of pacifism. Abe's speech at the World Economic Forum in 2014 was interpreted as a criticism of Chinese foreign and defense policy when he said that "the dividends of growth in Asia must not be wasted on military expansion" and called for greater preservation of the freedom of the seas under the rule of law, although he did not specifically refer to anyone country during his remarks.
Abe has attempted to centralize security policy in the Prime Minister's office by creating the Japanese National Security Council to better coordinate national security policy, and by ordering the first National Security Strategy in Japan's history. Based on the American body of the same name, the law to create the NSC was passed in November 2013 and began operating the following month when Abe appointed Shotaro Yachi as Japan's first National Security Advisor.
In December 2013, Abe announced a five-year plan of military expansion. He described this as "proactive pacificism", with the goal of making Japan a more "normal" country, able to defend itself. This was in reaction to a Chinese buildup and a decreased American influence in the region.
His first visit to the shrine as prime minister took place on 26 December 2013, the first anniversary of his second term in office. It was the first visit to the shrine by a sitting prime minister since Junichiro Koizumi visited in August 2006. Abe said that he "prayed to pay respect for the war dead who sacrificed their precious lives and hoped that they rest in peace". The Chinese government published a protest that day, calling government visits to the shrine "an effort to glorify the Japanese militaristic history of external invasion and colonial rule and to challenge the outcome of World War II". Qin Gang of the Chinese Ministry of Foreign Affairs said Abe is "unwelcome by Chinese people… Chinese leaders won't meet him any more". The Mainichi Shimbun argued in an editorial that the visit could also "cast a dark shadow" on relations with the United States, and the US embassy in Tokyo released a statement that "the United States is disappointed that Japan's leadership has taken an action that will exacerbate tensions with Japan's neighbors". The Wall Street Journal reported that U.S. officials urge Abe not to visit the shrine and pay homage to war criminals anymore. Public intellectual Amitai Etzioni of the Institute for Communitarian Policy Studies, who was a child in Germany when the Nazis rose to power, has stated in response to Abe's visits, "Unlike Japan, [Germany] faced their past, came to terms with it and learned from it. Japan should do the same." Etzioni criticized Prime Minister Abe's visit to the shrine as well as what he refers to as Japan's recent "nationalist wave" in an op-ed for The Diplomat. On 15 August 2014, the 69th anniversary of the surrender of Japan in World War II, Abe chose to not visit the shrine, in what was perceived as a diplomatic gesture to South Korea, China, and Taiwan. Despite Abe's absence, China and South Korea both voiced their disapproval at Japan's leadership as a large number of politicians, and three cabinet members, did attend the shrine to mark the anniversary.
On 28 April 2013, a new public event, the Restoration of Sovereignty Day, was held in Tokyo to mark the 61st anniversary of the end of the US occupation of Japan. It had been proposed by Abe in 2012. Since the US occupation of Okinawa ended only in 1972 and nearly three-quarters of US troops in Japan continue to be stationed in Okinawa, the event, which was attended by Emperor Akihito, was denounced by many Okinawans who saw it as celebrating a betrayal, and there were demonstrations in both Okinawa and Tokyo.