As Tokyo stocks tumbled further Friday, dragging the Nikkei average to its first close below 15,000 since October 2014, economists asked: Is Abenomics out of options?

Prime Minister Shinzo Abe has relied heavily on ultra-aggressive monetary easing to weaken the yen and boost exporters’ profits in his quest to end deflation. The campaign was a boon for the stock market, raising prices, benefiting rich investors and cementing Abe’s power base.

The resurgent yen and the stock plunge will be painful for his administration, which has failed to come through on structural reforms, but many say the more serious issue is the Bank of Japan’s helplessness.

The BOJ’s surprise announcement on Jan. 29 that it planned to adopt a negative interest rate failed to stem the trend — the Nikkei continued to tumble and the yen strengthened to the 110-level overnight on Thursday.

Economists largely attribute the losses to external factors, notably China’s economic slowdown, simmering anxiety in the eurozone and the U.S. Federal Reserve’s apparent reluctance to raise rates as earlier planned. But the turmoil has shown the limits of what the BOJ can do by itself, as its options for further monetary easing may run out, said Izuru Kato, chief economist at Totan Research Co.

The BOJ has been buying up massive amounts of Japanese government bonds, to the tune of ¥80 trillion a year. It currently possesses about 30 percent of JGBs, and at the current rate its holdings will exceed one in two by the end of fiscal 2017.

The purchase of all JGBs — a theoretical possibility — would mean the removal of its main pillar of monetary easing.

“If the BOJ increases the amount of JGBs it buys, the limit will come even closer,” Kato said. “The BOJ decided to introduce the negative rate because it needs a different kind of approach.”

The minus 0.1 percent rate on some cash holdings, which takes effect Tuesday, has mainly delivered a “negative surprise,” Kato said. The Nikkei rallied to close at 17,865 the next day, but gave up its gains just a few days later.

This is in sharp contrast to Bank of Japan Gov. Haruhiko Kuroda’s blasts of monetary easing in April 2013 and October 2014 — dubbed his “bazooka” — which spurred stocks and depressed the yen.

“This time, the surprise effect disappeared instantly,” lawmaker Motohisa Furukawa of the Democratic Party of Japan told a session of a Lower House finance committee on Friday.

Furukawa said Kuroda, who met with Abe on Friday, contributed to the market’s response by failing to communicate with its players.

Kuroda seemed to have made a U-turn. Only on Jan. 21, eight days before the shock rate announcement, he told an Upper House session that he was not considering imposing negative rates.

“The governor has kept saying that dialogue with the market is very important. But he just did what he said he wouldn’t only a week or so ago,” Furukawa said. “This distrust may be another cause of the instability in the market.”

Yuji Shimanaka, chief economist at Mitsubishi UFJ Morgan Stanley Securities, said he was surprised by the announcement, given Kuroda’s earlier testimony. Still, Shimanaka said market players are “reacting excessively” to bad news from overseas and the rumored but unproven side effects of the negative interest rate plan.

“The real economy is not that bad actually,” Shimanaka said. “It’s too early to say Abenomics is over.”

Finance ministers and central bankers of the Group of 20 are slated to meet in Shanghai on Feb. 26 to 27.

At any rate, the crisis is a wake-up call for Abe, who many economists say has relied too heavily on monetary easing for the past three years.

Abenomics originally consisted of three “arrows” — the other two being fiscal spending and structural reforms.

Monetary easing was originally considered a temporary measure to buy time for structural reforms, but many economists say Abe has failed to make significant progress in that area.

On Jan. 22, 2013, the Abe administration and the BOJ jointly declared a new inflation target of 2 percent. The previous governor, Masaaki Shirakawa, had long resisted Abe’s calls for this.

The government simultaneously pledged to promote “structural economic reforms” to raise Japan’s competitiveness and growth potential through investment, deregulation, and tax reforms.

These, Kato said, remain unfulfilled.

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