May is a crucial month for the world's third-largest economy, with three key risk events on the calendar that could sway investor confidence.
Within the month, Prime Minister Shinzo Abe is expected to make a decision on a consumption tax hike scheduled for April 2017, unleash a slew of fiscal policies linked to his "Abenomics 2.0" program and host the Group of Seven (G7) Leaders' Summit.
"We expect clarity on all three issues in the coming weeks," Izumi Devalier, HSBC economist, said.
All this takes place against the backdrop of a shaky economic recovery and jittery financial markets.
Abe's four-year quest to end Japan's near 20-year deflationary history has hit some new speed bumps; In March, consumer prices dropped 0.3 percent on-year, their fastest pace in three years, while household spending fell an annual 5.3 percent to a one-year low.
Meanwhile, the yen has strengthened 9 percent against the dollar since the Bank of Japan (BOJ) introduced negative interest rates at the end of January, according to DBS. A stronger currency tends to shave off repatriated earnings for export-centric companies and can result in lower capital investment. On Tuesday, the yen was trading at 109 per dollar.