For the past three years, Prime Minister Shinzo Abe could usually count on surging corporate earnings to back up the case that his policies were turning around Japan, but that is no more.

Pretax profit at the biggest companies will drop about 10 percent in the three months ending June, the biggest slump since Abe took office in late 2012, Daiwa Securities Group Inc. estimates. Investors have taken notice, with Japanese benchmarks being among the worst-performing stock indexes this year.

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