The Fortunes of Japan
The Fortunes of Japan
"40-year cycle theory"
The Fortunes of Japan are historically characterized by great change through a repetition of a rising phase and a declining phase on a 40-year cycle.
1. Rising phase of the Fortunes of Japan
< Approximately 40 years from 1868 (Meiji Restoration) to 1904 (the beginning of Russo-Japanese War) >
During the approximately 40 years, the Meiji Government, which brought a change in the feudal society in the Edo period, actively introduced Western culture for the civilization and enlightenment, and promoted industries through the policy of encouragement of new industry. Thus, Japan rapidly increased its national power.
2. Declining phase of the Fortunes of Japan
< 40 years from 1905 (the end of Russo-Japanese War) to 1945 (the end of World War II) >
During the 40 years, as a result of the policy of increasing wealth, Western military technologies were introduced in Japan for the enhancement of the national prestige and the military was reinforced. Then, after repeated wars, "Japan lost everything" when the war ended in 1945.
3. Rising phase of the Fortunes of Japan
< 40 years from 1945 to 1985 ("Plaza Accord") >
During the 40 years, the industry rapidly revived after the war, and the Japanese economy, which started from zero at the end of war, grew and progressed to become the world's second largest in 1968, only in 23 years after the war. Then, Japan further experienced great economic prosperity until 1985.
It is said that 1985 was the last year when the Japanese people were positively struggling to achieve a Westernized modern state without any doubt.
4. Declining phase of the Fortunes of Japan
< 40 years from 1985 (after the "Plaza Accord" was signed for promoting appreciation of the yen and depreciation of the dollar) - present (2015) - to 2025 (prospect) >
In 1985, the "Plaza Accord" for promoting cooperative "appreciation of the yen and depreciation of the dollar" was signed by G5 at that time in order to eliminate the US's large trade deficits and fiscal deficits and hinder Japan's solo economic success.
This caused the exchange rate of the yen against the US dollar, which was 235 yen in 1985, to rise by approximately 20 yen on the day after the Plaza Accord was announced, and a year later, the exchange rate reached 150 yen level. Ten years later in 1995, the exchange rate of the yen against the US dollar rapidly rose to 84 yen, and then the exchange rate reached a record high of 75 yen level in 2011.
As a result, Japan suffered from a severe recession induced by a strong yen, and it caused, for example, a serious blow to the export industry, successive bankruptcies of corporations and banks, and issues of non-performing loans of financial institutions. Thus, Japan lost its competitiveness of economy at once. Meanwhile, the bubble economy was caused immediately after the Plaza Accord was signed.
At least 20 years from 1985 to 2005, during which a deflationary spiral was caused and which includes the bubble economy from 1986 to 1991 and its collapse, is called "lost two decades" suffered from long-term depression.
*[Information on bubble economy]
The Nikkei Stock Average reached the highest value 38,957 yen in 1989, and the Japan's national income per person exceeded that of the US at that time. The land price dramatically rose (Only with the price of land inside the Yamanote Line in Tokyo, it was possible to purchase the entire land of the US).
5. Rising phase of the Fortunes of Japan (prospect)
< 40 years from 2025 to 2065 >
According to the 40-year cycle theory, the Fortunes of Japan will greatly change from the declining phase to the rising phase in around 2025, in approximately 10 years from the present (2015), and during approximately 40 years after that, Japan will experience great economic prosperity again.