I’ve lived in Japan on-and-off for the last 23 years, and can still remember the dynamism of the whole culture when i first came. Osaka’s skyline was like a huge erector-set, with tall cranes furiously putting up new buildings everywhere. The people walked quickly and while the natural Japanese mood of “melancholy” was abundant, there was a looking-forward to the future, where anyone could do just about anything they set their minds to. One of my English students was a normal guy – jazz drummer, and told me how his friend spent around 700,000usd on a new condo, and wasn’t even planning to live in it! He was a speculator, planning to sell it higher later. This student himself borrowed over 300,000usd to start up his tiny jazz studio/cafe in the nightclub area of Osaka. Wonder what happened with that?
I can still remember the day around 6 months after i arrived when the stock market crashed. The standard response was “It will come up again.” There were magazine articles explaining how Japan was “unique”, and different from other countries, so the economy would dip a bit, and then come back stronger than ever, and be number one in the world. Of course a few years before that there was a man in America who wrote a book something along the lines of “The Japanese Century”, referring to how the 21st century would see Japan become the dominant power in the world. Funny thing happened tho, that same man is now studying Chinese – ha!
Anyway, very few industries in Japan are really efficient, but the export-driven companies are usually tops in their fields. Especially in electronics and automobiles have they been world-beaters. So they have amassed a huge foreign reserves, second only to China’s. Japan’s reserves
It is a good thing, as that is about the only bright spot in Japan’s financial picture. The demographic problem is the biggest, with the population aging rapidly, and the young choosing not to get married, or married much later, many unborn killed, and a fear of allowing many foreigners in. The 1990s is called even in Japan a “wasted decade”, as the government continued to throw good money after bad on public works projects to somehow “ignite” the economy. Of course that didn’t do much good, as current stories of a huge govt. recreation centers etc. being sold for as little as $1 in some cases, because really no one wants them! So Japanese govt. debt ballooned to where it is now way higher than any other major country’s. Public debt per GDP is twice as bad as America’s, yet there is little angst about it, as most of the holders of the debt are not foreigners, but domestic. list of countries by public debt
Today Japan announced the first red ink in international trade in 31 years. 2011 Japan’s red ink. The stated reasons are the cleanup from the tsunami, tsunami cleanup pics and even bigger – the shutdown of many nuclear plants after the Fukushima problems, with the slack in electricity production being taken up by importing more oil and coal. This is ominous, as the export sector has been propping up the economy, and if Japan loses its reserves, there is basically nothing left financial wise.
Which leads to a big question – what will happen to the yen? The yen has been on a tear over the last few years, rising against all the other major currencies. When i left Japan in 2005, it was around 110jpy/1usd, but now that is 76/1. That is great for earning in yen, and sending to other countries to help people, but what will happen if Japan self-implodes?
Three years ago a pastor at a Seventh-day Adventist church here in Japan prayed for a better economy, but i told some of the members afterwards that it might be better for the economy to collapse totally, so that the people would be forced to consider eternal realities. As long as things go along somehow, people will not consider what is important in life, and will continue to reject God’s gift of salvation in Jesus Christ.