Standard & Poor’s recently cut its long-term credit rating of Japan one level, down to A+, and markets do not seem to have reacted much, if at all. A key reason is that many Japanese bonds are owned by Japanese banks and other Japanese institutions, “which are not going to sell in large numbers,” says Wharton finance professor Franklin Allen.

But the move is one more straw in the wind pointing to how ineffective so-called Abenomics has been, he adds. It also comes at a time when there is other negative news for Japan. Wage growth bogged down in August along with industrial production, which fell half a point following a nearly identical drop in July.…