Charlie Brown is back in Tokyo, and he's not happy. Every five years or so, the Charles Schulz character hits Japan with fellow "Peanuts" pal Lucy and her football. It's a recurring theme of the cartoon: Lucy convincing Charlie time and time again to take a big running start to kick the ball. This time, Lucy insists, she won't yank it away, sending Charlie down into the mud. And once again, Charlie looks up from the ground disgusted by his gullibility.
This pattern is familiar to Japan investors wondering how, oh how, they got suckered again. They went for it in the early 2000s when Prime Minister Junichiro Koizumi promised to let markets kick away, and again in 2009 with Yukio Hatoyama and Naoto Kan in 2010. Then came Shinzo Abe's turn to win investors' trust, and he did so dazzlingly. But dismal economic data and sliding stocks are sending investors into the mud, ruing their naivete — again.
Abe's bigger football gag is on voters, of course. Sunday's election marks at least the third time he's gotten the people to support his Abenomics scheme. Even though deflation is deepening, retail sales and industrial production are sputtering and corporate profits are evaporating, Abe is holding the ball and saying "come on, trust me" to 127 million people (polls suggest they will). Before long, though, they'll be dusting themselves off as Abe ignores pro-growth reforms and focuses elsewhere — on amending the Constitution, Tokyo's security footprint abroad and prettying up Japan's World War II exploits. As markets quake over "Brexit," is it time for "Abexit?"