THE year 2014 was already going to be a trial for the economic programme designed by Shinzo Abe, prime minister of Japan. But recent weeks have added a particularly worrisome handful of bad tidings to the cauldron. At the start of April the government will raise the consumption tax, Japan’s version of value-added tax, from the current low rate of 5% to 8%. The worry is that the tax rise could choke off an ongoing recovery in consumer sentiment and spending. After the most recent such hike, in April 1997, the Asian financial crisis rolled around and amplified the negative effect—as did a sharp fall in government spending on public works. The combined effect was to send the economy back into a slump. The first unwelcome surprise so far this year has been a spell of turmoil in emerging markets, which itself brought eerie echoes of 1997. Although the volatility has been more dispersed geographically than it was in 1997 and 1998, investors tend to sell their shares in Japan’s stockmarket as risk aversion and the yen rise in tandem. More than half of the country’s exports go to emerging-market countries, including China.

The second jolt was a disappointing announcement on February 17th. GDP in the fourth quarter of 2013 now looks like 1.0% on a real, annualised basis; far below the 2.8% that economists had expected. After lacklustre growth of 1.1% in the third quarter, the fresh result put an end to the glad news from earlier in 2013, which had it that that Japan was expanding more rapidly than any other G7 economy. Real GDP had grown by an annualised 4.5% in the first quarter, and by a ruddy 3.6% in the second.

The chief explanation for the fourth-quarter setback was poor exports. While robust domestic demand and government spending together boosted growth by 3%, a steep fall in the trade surplus subtracted 1.8%. This in turn called into question one of the main planks of Mr Abe's economic plan, the devaluation of the yen.

A shutdown of the country’s nuclear power plants and the higher cost of extra imported energy due to a weak yen partly explains the worsening trade deficit. It rose to ¥2.79 trillion in January ($22.4 billion), the highest level since records began, and our third bit of gloomy news. The Japanese are buying more foreign gadgets in preference to domestic electronics, which is part of the story. According to the Nikkei newspaper, the economy ministry calculates that the success of foreign smartphones has worsened Japan’s trade balance by as much as ¥2.3 trillion, or a fifth of the overall trade deficit in 2013. Apple’s iPhones made up nearly 70% of all smartphone sales in the fourth quarter of 2013.

Then there is the phenomenon of “hollowing out”, whereby local firms set up facilities overseas. Japanese firms have moved to “offshore” production to cheaper locations; to be closer to overseas customers; and to escape the pressure of a yen that used to be costly. They had stood by loyally for years before following the example set by American and European companies, but now the trend is in full swing. With production costs measured in other currencies, the yen’s devaluation has not been able to boost export volumes direct from Japan in the way it used to.

For the time being, investors are shrugging off the bad news. That is mainly because a second round of monetary easing by the Bank of Japan (BOJ) is expected soon, and the disappointing news about the fourth quarter’s GDP should, if anything, bring it forward. This week the BOJ said it would double and extend its loan-support programme for banks, which the governor, Haruhiko Kuroda, said would increase the “ripple” effects of its monetary easing. The effect is likely to be limited, but markets took the announcement as a sign that the BOJ is ready and waiting to do far more.

Yet with exports weak, the economy will rely heavily on the engine of domestic consumer demand, which is vulnerable to the coming consumption-tax hike. The structural-reform part of Mr Abe’s agenda, which should help spur growth in the longer term, is unlikely to take large steps forward before the summer. The government has now turned its attention to Mr Abe’s national-security agenda, while the economy sits back on the burners. Mr Abe's visit in December 2013 to Tokyo’s controversial Yasukuni shrine, which contains the spirits of notorious war criminals, alongside those of Japan’s ordinary war dead, has had the effect of distracting precious attention from the economy. At the same time, someone had better be minding the auguries.

(Picture credit: AFP)