TOKYO—At its core, Prime Minister Shinzo Abe’s economic-revitalization plan was a bet that a committed central bank could jolt Japan out of decades of decline. But the failure of the bank to generate a sustained upswing, even after its most radical step yet in cutting interest rates to negative territory, suggests the “Abenomics” program has reached an impasse.

With the economy stumbling, Tokyo shares fell 2.3% Wednesday, erasing nearly all the gains since the Bank of Japanratcheted up its easing program in October 2014. And...