It’s Deja Vu in Japanese markets as Abe leaves investors cold

Bloomberg

Not for the first time, a long-awaited plan by Japanese Prime Minister Shinzo Abe has fallen flat with investors. The Topix slumped 1.6 percent on Tuesday after Abe returned to the fiscal-stimulus lever with a 28 trillion yen ($277 billion) spending-and-lending package to sooth concern that his Abenomics program isn’t working. It dropped another 2.2 percent on Wednesday.
The yen jumped 1.5 percent against the dollar the day of the announcement as investors became more risk-averse. Traders expected the plan would be underwhelming and acted accordingly when they were proved right, according to Fukoku Mutual Life Insurance Co.
In June 2014, the Japanese premier updated his ideas for spurring growth. This included greater participation by women in the workforce and revitalizing the health-care industry and regional economies. Investors weren’t expecting much from the plan and the stock-market reaction was somewhat muted. The Topix fell 0.6 percent the day after the announcement and 1.2 percent over three days.
Back in June 2013, the Topix sank 6.1 percent over three straight days after Abe previewed his growth strategies, the so-called third arrow of Abenomics. The plan would boost national income and remove barriers to private enterprise, the premier said in a speech in Tokyo on June 5 that year. The speech “didn’t have any surprises,” Mizuho Trust & Banking Co. said at the time.