On this snowiest of snowy days in Hokkaido, let me send out an excellent writeup from the Japan Times regarding the Japan I first came to know: The Bubble Economy. I first arrived here in 1986 as a tourist, and came to look around for a year in 1987. It was one great, big party. By the time I came back here, married, to stay and work, in 1991, the party was winding up, and it’s been over (especially up here in Hokkaido) ever since. Surprising to hear that it only lasted about five years. Eric Johnston tells us about everything you’d ever want to know in 1500 words about how it happened, how it ended, and what its aftereffects are. If you’re stuck inside today, have a good read. Excerpt:
“Economic historians usually date the beginning of the bubble economy in September 1985, when Japan and five other nations signed the Plaza Accord in New York. That agreement called for the depreciation of the dollar against the yen and was supposed to increase U.S. exports by making them cheaper.
But it also made it cheaper for Japanese companies to purchase foreign assets. And they went on an overseas buying spree, picking off properties like the Rockefeller Center in New York and golf courses in Hawaii and California.
By December 1989, the benchmark Nikkei 225 stock average had reached nearly 39,000. But beginning in 1990, the stock market began a downward spiral that saw it lose more than $2 trillion by December 1990, effectively ending the bubble era…
What was Japan like during those years? For many people, it was one big, expensive party. The frugality and austerity that defined the country during the postwar era gave way to extravagance and conspicuous consumption. Stories of housewives in Nara sipping $500 cups of coffee sprinkled with gold dust or businessmen spending tens of thousands of dollars in Tokyo’s flashy restaurants and nightclubs were legion. One nightclub in particular, Julianna’s Tokyo, become the symbol for the flashy, party lifestyle of the entire era.
Japan’s inflated land prices made global headlines. The Imperial Palace was reported to be worth more than France. A ¥10,000 note dropped in Tokyo’s Ginza district was worth less than the tiny amount of ground it covered…