The Bubble Bursts - Today (late 1980s - 2000s)

Tokyo

Postwar Japan was booming up until the late 1980s. The Japanese yen grew very strong. Real estate and labour costs were at their highest. All of this meant Japanese goods were priced very high for foreign customers as well as manufacturing companies competing severely with other low cost newly developing nations.

Banks, who distributed large loans to people in the 1980s suffered as soon as house prices fell in the 1990s Such bad debts encouraged a recession. Japan was not alone globally as many other nations were suffering economically. So in terms of global positioning, Japan did not look as if it was suffering too much. However, on the inside, consumer spending dropped, unemployment rate rose, average household incomes came to a halt, and general economic anxiety spread.

Japan today enjoys a thriving economy and ranks second in the world to that of the United States in terms of its GDP. On average Japanese families earn a relatively high income and are still very fond of saving which made their assets and savings the largest in the world. Manufacturing and trade are the key industries for Japan's economy. With few natural resources, it imports raw materials and exports extremely high quality manufactured goods.