Japan elections - second chance Shinzo Abe has the potential to be Japan's most successful prime minister so far this century. At least, the stock market thinks so: the Nikkei 225 Average has gained 14 per cent since Yoshihiko Noda, ousted at the weekend, called the election a month ago. That beats the 13 per cent rally that accompanied the longer run-up to Japan's last election landslide in 2009. But markets frequently buy the rumour and sell the fact. Mr Abe will have his work cut out persuading investors to stick around. Since Mr Abe left office in 2007, the Nikkei has fallen by two-fifths compared with a drop of a quarter for the crisis-battered FTSE Eurofirst 300. Even during his year as leader, Japanese stocks performed only half as well as their European and US peers, gaining 5 per cent. A sustained pick-up for the world's second-largest equity market by capitalisation would be something to cheer. It won't be easy. Entrenched deflationary expectations have driven investors to bonds. Caution dominates stocks: secondary offerings have raised more capital than new listings each year for the past decade, according to Macquarie. That changed this year, but then, not much was raised at all. Big business in Japan is at its gloomiest in two years, while doing anything at all is hard: Japan ranks only 24th in the World Bank's ease of doing business survey. That puts it behind Macedonia and Saudi Arabia, and far below South Korea, in eighth. Mr Abe's victory came from voter disillusionment with the outgoing government's inability to revive the economy. Broadly, deflation must end, the yen needs to weaken, and public debt must be curbed. But real progress will be slow beyond boosts from any rise in spending on infrastructure and other such voter-friendly pledges. The International Monetary Fund expects Japan's net debt to increase, relative to the economy, for at least five more years. That burden will limit the Abe government's room to be as bold in its actions as in its electioneering - assuming Mr Abe lasts longer than his predecessors.