THAILAND - Japanese Prime Minister Shinzo Abe got an early sign of how his blueprint to revive Japan's industrial vim and economic vigour was working, when two of his country's biggest carmakers unveiled US$900 million (S$1.1 billion) worth of investments to boost production.
There was one drawback. The new assembly plants and expanded factories announced by Mazda and Honda are not in Japan, but in Thailand, more than 3,200km away.
Since taking office last December, Mr Abe's stimulus efforts have barely curbed a slide in private-sector investment at home, but they have done wonders for accelerating Japanese investment elsewhere in Asia.
Capital expenditure in Japan fell 4 per cent in the first six months of this year, compared with the same period last year.
Japanese investment in Asia, meanwhile, rose 22 per cent, according to the Japan External Trade Organisation, or Jetro.
"Manufacturing investment is still contracting because companies are investing abroad," said Ms Izumi Devalier, Japan economist at HSBC in Hong Kong.
Government spending and a weaker yen cannot conceal the fact that Japan's manufacturers are still forsaking their country's shrinking population, high costs and regulatory barriers in favour of faster-growing, younger economies in Asia.
The prospect of a weakening yen - the currency has fallen roughly 20 per cent against the United States dollar since December - sapping their purchasing power is only encouraging them to speed up investments overseas.
Mr Kenneth Courtis, a former Goldman Sachs Asia vice-chairman who now heads Starfort Investments in Hong Kong, said: "The incentives to invest domestically are underwhelming.
"The long-term demographics, which are very problematic, and the threat that your firepower is going to be diminished with the value of the yen, are driving investment increasingly abroad."
Some economists said it could thus be years before investments reflect the impact of Abenomics.
Others said the yen, which has traded around 95-100 to the US dollar over the past three months, has not weakened enough yet.
South-east Asia also offers something Japan cannot: A growing, increasingly middle-class population. One in four Japanese are aged 65 or older. Japan's population shrank by 284,000, to 127.5 million, last year.
Mr Sotaro Nishikawa, director of Jetro's office in Hanoi, said: "We're now facing an ageing society. If we invest our capital in Japan alone, in the future, we (won't be able to) survive."