It’s been a devastating few months for Abenomics, the bold scheme long-advertised as Japan’s way back to economic greatness.

Exports dropped for an eighth straight month in July and real wages are down a seventh consecutive month as trade war headwinds rock Tokyo’s world. The only thing rising is the yen – signaling more hits to come for exporters.

But the most damning metric may be found in the port city of Yokohama. That is where a steady drip-drip-drop of dismal news at Nissan Motor headquarters is undermining what was perceived to be a big reform win for Japan: a corporate governance “Big Bang.”

Shenanigans by any one company, of course, don’t speak for an entire economy. But the nature of Nissan’s drama encapsulates so many of the reasons Prime Minister Shinzo Abe’s revival plan is going off the road.

From hero to zero

Nissan first burst into the zeitgeist last November, when Carlos Ghosn was arrested for underreporting his compensation. That itself was bad enough: The Brazilian-born, Lebanese-raised Frenchman is by far Japan’s most fabled and splashiest modern chieftain, for it was he who pulled off one of Japan Inc’s most audacious turnarounds.

In 1999, Ghosn, then 45, arrived in Yokohama to address a debt-ridden corporate disaster veering toward irrelevance. He cut debt, pushed engineers to restore Nissan’s global standing and returned it to profitability.

The unlikely feat – by a gaijin (foreigner) no less! – inspired “The True Life of Carlos Ghosn” manga series. Ghosn then went on to oversee the broader Nissan-Renault-Mitsubishi alliance.

Given his many achievements, his downfall shocked Japan. The torrent of disturbing news since has been shocking the world.

At first, Nissan tried to dismiss Ghosn as an aberration. He’d essentially let his glowing press — and manga series — go to his head. And, clearly, he went too far with his off-the-books pay schemes, private-jet fleets and Nissan-funded properties around the globe.

But now we know, it was not just Ghosn.

Last week, we learned Ghosn’s protege and successor, Hiroto Saikawa, harbored his own compensation scandal. Days after news broke that Saikawa improperly received the equivalent of US$443,000 as part of a performance-based bonus scheme, he resigned.

Saikawa’s downfall, and Ghosn’s before him, was the financial equivalent of flipping on the kitchen light switch only to find an assortment of critters scurrying about.

The trouble is, those critters are turning up in all too many of Japan Inc’s biggest companies — companies that Abenomics was supposed to have pulled into the 21st century.

Not just Nissan…

In 2014 Abe had rolled out a UK-like stewardship code. In 2015, Tokyo took steps to give shareholders a greater voice in corporate decisions. Since then, policies aimed at increasing the number of outside directors and publishing data on cross-shareholdings relationships.

Yet the last 24 months have served up reminder after reminder that Japan Inc. still answers to no one.

From Kobe Steel to Mitsubishi Materials to earthquake shock absorber maker KYB, Japan has seen an explosion in quality-control scandals.

Suruga Bank, a regional Shizuoka lender, ran afoul of regulators. Mazda, Nissan, Subaru, Suzuki, Yamaha and others were embroiled in emissions-data snafus. Olympus and Toshiba, the sources of two of Japan’s biggest accounting scandals in recent years, stayed in the headlines.

The chaos in Yokohama is going further to prove Abe’s reforms lack teeth. Too much of what he’s done since 2014 is voluntary. It means that for all the hype about Japan moving forward, all too many of the bad old corporate ways remain.

To many global investors, Nissan’s opacity seemed to have more in common with China Inc. than the new Japan punters hoped Abe was creating. Odd, too, is how reticent Abe’s team and top business lobby officials are about calling out Nissan’s role in tarnishing the Japan brand.

On the one hand, Ghosn’s treatment by prosecutors and the police belied Abe’s spin that Japan wants to welcome more foreign talent.

Initially, for example, Ghosn was detained for 108 days for questioning with little access to lawyers or family. Once released in March, he was re-arrested for 21 days. He’s now under house arrest.

Ghosn’s incarceration sparked international outrage over Japan’s “hostage justice” system – which hardly looks either foreign-friendly, or, indeed, up to global standards.

On the other hand, Ghosn’s ouster had all the hallmarks of a palace coup. Once gone, top Nissan officials, including Saikawa, attacked him in the media. The spectacle highlighted how Abe’s corporate reforms are more cosmetic than substantive.

Japan Inc. stuck in a rut

In this, things look little different to the broader restructuring shock therapy Abenomics promised.

If companies were acting more creatively and internationally, Japan’s domestic investment rates would be skyrocketing. Executives might embrace merit-based pay and promotion policies and boost productivity. They might take risks to rekindle Japan’s innovative mojo.

A corporate sector stuck in the past makes it hard for the broader economy to step forward. Or to get Abe’s revival roadmap out of first gear.

Events in Yokohama remind us that unless Tokyo raises its reform ambitions, Asia’s No. 2 economy will find itself going into reverse.