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Disconcerting global investors, Abenomics – Tokyo’s strategy of fiscal, monetary stimulus and structural reform – is falling flat and added to speculation that the country could fall back into deflation.

Moreover, Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui Asset Management Co., fears that with foreigners pulling out of the market, the diminished confidence could drag Japanese markets spiraling down into deflation.

“If foreigners don’t come back, the future of Abenomics could be jeopardized,” Ichikawa told Bloomberg.

Foreign investors made up 70% of value traded in Tokyo and acquired a net 18.5 trillion yen between 2012 and 2015. Sicne the second week of January, overseas investors have pulled 5 trillion yen from the market.

iShares MSCI Japan ETF

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