Does Japanese turbulence imply Abenomics has failed?

Japan's Nikkei 225 is now resembling a Christmas tree, as sharp gains since early April have been eradicated in recent weeks. It's now officially a bear market and that doesn't bode well for European markets or the US open.

It's not just the plunge that is interesting, but the huge rise followed by the dramatic collapse. Things were looking up for Japan, but now the world's most heavily indebted developed country (by debt to GDP ratio) could head back to stagnation.

SocGen's Kit Juckes suggest this may now be more than a temporary correction:

Central bankers may have viewed the pick-up in market volatility as 'normal' or 'a blip' until today but after Japanese foreign asset flow data showed continued repatriation of money (sales of foreign bonds and equities) the Nikkei has suffered an awful session. My lame strategy (yen, NKY and JGBs are all untradeable) stays in place. Abenomics is doing better in econ data than in markets now.