Analisis Japon

Japan is one of the most industrialized economies in the world, before the United States. Japan’s geographical area is composed of various mountainous forests and of thousands of islands in which Honshu, Hokkaido, Kyushu and Shikoku are the four most important. Its high technological advances, strong work ethics and its small defence allocation have triggered a rapid expansion of Japan’s economy.However, in the 1990`s, Japan suffered several recessions that slowed its aggregate demand, because of a low capital, foreign and domestic investments, its prices and interest rates decreased. This essay will analyze an over all idea of Japan, based on the history since 1960’s, what happened back then that led to one of the biggest economies in the world, as well as an overall study of Japan’seconomy and its stock market.


In the decade of the 1960`s, Japan experienced a period of rapid expansion often referred as the "The Golden Sixties". Japan’s investment in its infrastructure, the liberalization of trade and "income doubling" plan raised the Japanese economy to achieve its highest peak in economical growth. Another aspect of Japan’s rapid economical advance was also due togovernment policies that lowered interest rates and induced private companies to spend. Japan has had a spectacular growing trend due to its well educated work force, its high promotion of industrialization, its high saving rates, and foreign trade.


This rapid expansion started after World War II, when the government of Japan applied various interventions such as increasing theirexports in its industry and international trades to help the economy grow. Also, the increasing foreign investments, especially from the United States, propelled the expansion of Japan’s economy. American contribution of the Japanese economical expansion after World War II include the financial support for their military forces that contributed to a 27 percent of Japan’s total export trade as well asthe admittance of The General Agreement on Tariffs and Trade that aimed to decrease and subsidise agreements on international trade[1].


Another industry policy was implemented that promoted heavy capital loans by the Bank of Japan which in turn, made other loans to city banks that would give loans to large companies (conglomerates). This gave rise to the term known as "over-loan", aproblem borrowers find themselves in a situation in which their credit exceeds their ability to pay a loan. At this period, loosen anti-monopoly and over-lending laws gave rise to business groups that had substantial control over large companies. These groups called Keiretsu, protected Japan’s economy by not allowing foreign companies to take-over important, strategic industries like steel, coal andelectric power industries. During this time, Keiretsu groups aimed more to a long term economical growth, instead of short term profits

Japan’s dramatic growing trends of the post-war era throughout the following three decades reached a dead end to enter a period of several recessions. Through out the three decades following World War II, Japan increased its trade with the United States aswell as investment loans with foreign countries that strengthen Japan’s economy. The main aspects that lead the Japanese growing economy to reduce its country’s gross domestic product, increase unemployment rates, collapse of national as well as foreign investments, deflation of Japanese Yen, amongst others, portray a Japanese economy entering a decade of downward economical drift. One of the mainaspects for the Japanese recession phase, starting at the beginnings of the 1990`s, was commonly known as the burst of the economical bubble that was characterized by increasing prices on real-estate and low interest rates. One of the main factors that lead the Japanese economy to encounter this bubble was the fact that during the "economical miracle", Japan encouraged its nation to increase...