Japan's stock market has faced a rough month so far, continuing to shed last year's gains as analysts grow disillusioned over the pace of promised reforms.
"They're taking the policy premium out of the market," said Ben Collett, head of Asian equities at Sunrise Brokers.
The Nikkei ended down 1.4 percent at 14,096.59 Friday, bringing May losses to around 1.5 percent. The index has erased more than 13 percent of its value so far this year, making it one of the worst-performing major global indexes, with foreign investors pulling around $14.9 billion out of Japanese funds over the period, according to data from Jefferies.
Investors pushed Japanese shares up more than 50 percent last year on hopes that Abenomics, or the more than one-year-old plan from Japanese Prime Minister Shinzo Abe, would kick-start Japan's long-moribund economy out of its decades-long struggle against the pressures of deflation.
The "first arrow" of Abenomics was aggressive easing from the Bank of Japan, led by Gov. Haruhiko. It was followed by a "second arrow" of ambitious government spending, but the "third arrow" of structural reforms remains elusive.
"The market is pricing in that Abe and Kuroda aren't going to do anything this quarter," Collett said.