The world's second-largest economy should have picked up by now. The tide must surely start to turn for Japan
Government spending packages came and went. Fiscal stimulus was invoked several times over. Corporate reform was meant to herald a new dawn. But nothing has made much impression on the Japanese stock market. It is still 60% below its all-time high in 1989.
The world's second largest economy regularly defies the predictions of both foreign and domestic analysts. It should have picked up by now. In the US and Europe, markets sent reeling after the terrorist attacks in New York on 11 September have bounced back. Some are ending the year on a positively optimistic note. They take the pain and get the gain. In Japan, it seems it is all pain and precious little gain.
Over the last few months, the stock market has shown no real inclination towards sustained recovery. Those companies that have survived the pressures are starting to cave in. Unemployment is edging higher and industrial production is slipping away along with the country's trade surplus.
Prime Minister Koizumi started out in March with every intention of tackling the economy's problems head on, starting with the heavily subsidised quasi-state companies. The population was cheering him all the way. Even his faction-ridden party was persuaded to join in. But a few months down the line, little has changed. Japan is fortunate to have money to throw at its problems, but credit risk is growing. Three international ratings agencies have downgraded the country's debt.
Appetite for reform in Japanese boardrooms is also fading, replaced by deepening gloom. Managers feel the changes they made have had little impact, given the pressures of the economic slump. Business confidence is at a three-year low, not just among small businesses, which were hit early on by the recession, but also among larger corporates in key industries.
In the past few years, big electronics manufacturers like NEC, Toshiba and Fujitsu have all produced restructuring plans that have come to nothing, disappointing international investors. Japanese companies are losing out to more focused rivals, notably from China and South Korea.
The response of Japan's steelmakers has been more proactive, with moves to merge among the sector's biggest players. Nippon Steel is getting together with Sumitomo Metal Industries. Nippon has already done a deal with Kobe Steel, while NKK is shedding foreign subsidiaries. Here, at least, investors can see evidence of tough but effective management.
Once again, Japan is being offered as an unmissable buying opportunity. The country, say some analysts, only responds to mega-pressure ' the kind being applied. Then it rises to the occasion. The market has been lower for longer than anywhere else. It cannot slide further. Once it turns it will rise very fast. International investors are underweight and need to buy.
It has all been heard before. The economy is mired in recession. The ageing population will not spend. The younger generation has to save. The banking crisis is deepening, and sporadic corporate attempts to save the ship are being betrayed by weak leadership.
Joe McDonnell joins as head of portfolio solutions (EMEA)
Adviser of the Year - South East
Fidelity Multi Asset CIO's outlook
Willis Owen report
From 1 March