Foreign investors are bailing out of Japanese stocks as a wobbly economy feeds disillusionment about 'Abenomics', sparking bouts of volatility in a market increasingly shaken up by policy decisions of the Bank of Japan.
The trouble is that long-term focused foreign funds have turned bearish on doubts that Tokyo can pull Japan out of two decades of economic stagnation, despite more than three years of massive monetary and fiscal stimulus.
"There are many long-term investors who have given up on Japanese stocks as there are no structural reforms being delivered. Meanwhile, monetary policy decisions only have short-term effects," said Michiro Naito, executive director at equity derivatives at JPMorgan who recently visited Asian investors.