NEW YORK (TheStreet) -- Japanese Prime Minister Shinzo Abe was once heralded as the white knight who would defeat Japan's prolonged deflation. His grand scheme, however, may be diverging off course.

The issue revolves around Japan's immense debt load. The country's current percentage of debt to gross domestic product stands at around 211%. Sales tax hikes were planned for 2014 in order to reform fiscal policy and cut into the astounding level of debt.

But in recent weeks, reports have surfaced that Abe is considering scrapping the tax hikes in an effort to keep consumer spending and GDP on the rise. Japan's most recent retail sales underperformed expectations, further evidence consumers may be vulnerable to tax hikes.

All of this uncertainty has pushed domestic equities lower and the yen higher.

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The first chart below is of

iShares MSCI Japan Index

(EWJ) - Get Report

over

Vanguard Total World Stock Index ETF

(VT) - Get Report

. This pair measures a basket of Japanese equities versus world equities. Around mid-July, the price action dove toward yearly lows.

The risk is that the Abe's policies will never come to fruition. Bondholders believed their investments would be kept safe through sweeping monetary and fiscal reforms. With the fiscal side now in question, instability could cripple investor sentiment and push riskier assets lower.

The inverse trade is a stronger yen. The chart below is of

CurrencyShares Japanese Yen Trust

(FXY) - Get Report

over

CurrencyShares Swiss Franc Trust

(FXF) - Get Report

. Both the yen and franc are bought during times of market duress. The yen, however, is outperforming due to the additional monetary policy questions.

The market questions whether Abe will come through on his promises and whether his policies will be effective.

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The yen has been considerably depreciated up to this point, and further question marks from Japan will continue to reverse the desired policy effects of Abe's original plan for reform.

At the time of publication the author had no position in any of the stocks mentioned.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Andrew Sachais' focus is on analyzing markets with global macro-based strategies. Sachais is a chief investment strategist and portfolio manager at the start-up fund, Satch Kapital Investments. The fund uses ETF's traded on the U.S. stock market to gain exposure to both domestic and foreign assets. His strategy takes into consideration global equity, commodity, currency and debt markets. Sachais is a graduate of Georgetown University, where he earned a degree in Economics.