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The stock market is roaring, the yen has plunged and Tokyo is jumping into a string of long-delayed trade talks, prompting some to ask a question not heard in years: is Japan back?
Prime Minister Shinzo Abe, who is basking in approval ratings topping 70 percent, marks his 100th day in office on Thursday, with some observers lauding an impressive start.
The conservative ideologue has largely shelved his mantra of tough diplomacy amid territorial spats with China and South Korea, instead focusing on how to make good on a campaign pledge to stoke growth in Japan's deflation-plagued economy, the world's third-largest.
The country has been riding high under a leader who appears willing to challenge the paralysis endemic to Japan's revolving-door political system -- in place since Abe's first one-year run as premier ended in 2007 amid health problems and plunging popularity.
"He has changed the mood in this country. People are optimistic, hopeful for the future for the first time in a very long time," said Gerald Curtis, a politics professor at Columbia University.
But some are already questioning whether so-called "Abenomics" -- a mix of big government spending and aggressive central bank easing -- is all show, a prescription that will saddle Japan with more debt.
Years of tepid growth have left Tokyo with a national debt at more than twice the size of the economy, the worst in the industrialised world, while a rapidly ageing society threatens to exacerbate the problem.
For now, investors seem to have shrugged off the mountain of challenges.
Tokyo's benchmark Nikkei 225 index shot up nearly 20 percent in the first quarter of the year to sit above 12,000 points as the yen tumbled, largely due to speculation Abe's hand-picked team at the Bank of Japan (BoJ) will print money.
All eyes are on a two-day BoJ meeting starting Wednesday as its new governor says he will follow through on a pledge to launch more aggressive easing that could weaken the yen further and help exporters.
Brokerage CLSA's annual conference in Tokyo this year saw a big jump in the number of senior US and European investment managers attending as players turn their focus to long-forgotten Japan.
Nevertheless, "a common question is 'has anything changed apart from the yen?'", said Morten Paulsen, who heads research in CLSA's Japanese equities division.
Japanese companies have tried to slash costs to counter the strong yen -- which makes them less competitive overseas and shrinks the value of foreign income -- but "structurally, nothing has changed", Paulsen said.
"Even if it's just the yen, it's still quite meaningful although Japanese managers are being very cautious. They're not breaking out the champagne."
Domestic investors have reason for caution too, having seen the Nikkei peak at almost 39,000 in the last days of 1989 before Japan's asset bubble popped, sending the index and a powerhouse economy plunging over the next two decades.
"I have benefited from Abenomics," said 47-year-old investor Eiji Shibuya. "But it's too early to say the Japanese economy is back."
Observers point to structural challenges, such as the lack of women in the workforce, the government has gone nowhere near addressing.
But there is movement in some areas -- the cabinet this week approved a plan to open up the country's power sector to more competition.
Meanwhile, Abe has forged ahead on the trade front, entering talks on a Pacific-wide free trade pact with the US, as well as with the European Union and neighbours China and South Korea, despite testy diplomatic relations.
Trade deals, which have been put off for years, would help both Japanese exporters and consumers, who pay high prices especially for agricultural products, analysts say.
"There is an 'it's now or never' kind of feeling," said Ivan Tselichtchev, an economics professor at Japan's Niigata University of Management.
The deals, however, will put Abe on a collision course with Japan's powerful farming lobby, among others, while the US auto industry is vehemently opposed to giving Japanese rivals greater access to the US market.
Key to Abe's success or failure are parliamentary upper house elections this summer which could solidify his power base, analysts say.
But they might also let the premier re-focus on his nationalistic agenda and avoid politically unpopular reforms, said Ryutaro Kono, an economist at BNP Paribas, who added that Abe for now just needs to keep "the economy humming with the monetisation strategy".
Columbia University's Curtis said Abe's post-election moves are critical to knowing if his administration is unique, or more of the same.
After that "we will know whether Abenomics is for real or if it has simply dug Japan's fiscal deficit hole deeper".