Just over two years after Japan's PM Shinzo Abe launched an economic policy blitz, the latest inflation and consumer demand figures suggest his spendthrift measures have led to nothing but higher government debt.
New economic data coming out of Japan on Friday showed that annual inflation fell back to zero in July in spite of massive amounts of cheap cash that had been pumped into the world's third largest economy by the country's central bank.
Consumer spending also declined, falling 0.2 percent year-on-year and marking the second monthly drop after slumping 2 percent in June.
The disappointing data are the latest indication that the Japanese economy, which contracted 0.4 percent in the second quarter, was likely to continue struggling.
Flash in the pan
The slowdown comes more than two years after Prime Minister Shinzo Abe launched his new economic policy, dubbed Abenomics, to kickstart anemic growth and rein in more than a decade of deflation. The program called for big government spending, massive monetary easing by the Bank of Japan (BOJ) and reforms to free up Japan's highly-regulated economy.
In 2013, the BoJ launched an asset-buying program worth 80 trillion yen ($640 billion, 586 billion euros) annually. Speculation is mounting now that the central bank will expand the purchases to boost the inflation rate to the desired target of 2 percent.