Economic history of Japan

The fall of the Tokugawa Shogunate and ensuing abandonment of the isolationist stance catalysed development in Japanese society in the Meiji Period, where Japan began rapid industrialization and westernization.

[20] The Middle Jōmon period (3520–2470 BCE) saw a rise in complexity in the design of pit-houses, the most commonly used method of housing at the time,[21] with some even having paved stone floors.

[35] Much of the material culture of the Kofun period demonstrates that Japan was in close political and economic contact with continental Asia (especially with the southern dynasties of China) via the Korean Peninsula; bronze mirrors cast from the same mould have been found on both sides of the Tsushima Strait.

[41][42][43] Inspired by the Chinese Tang dynasty coinage Kaiyuan Tongbao, the Wadōkaichin began being produced following the discovery of large copper deposits in Japan during the early 8th century.

By the mid-eighth century, shōen (landed estates), one of the most important economic institutions in prehistoric Japan, began to rise as a result of the search for a more manageable form of landholding.

[58] During the period, some of Japan's most representative art forms developed, including ink wash painting, ikebana flower arrangement, the tea ceremony, Japanese gardening, bonsai, and Noh theater.

Wanting to improve relations with China and to rid Japan of the wokou threat, Ashikaga Yoshimitsu accepted a relationship with the Chinese that was to last for half a century.

The Dutch also engaged in piracy and naval combat to weaken Portuguese and Spanish shipping in the Pacific, and ultimately became the only westerners to be allowed access to Japan from the small enclave of Dejima after 1638 and for the next two centuries.

Economic development during the Edo period included urbanization, increased shipping of commodities, a significant expansion of domestic and, initially, foreign commerce, and a diffusion of trade and handicraft industries.

At the beginning of the Edo period, Japan built her first ocean-going Western-style warships, such as the San Juan Bautista, a 500-ton galleon-type ship that transported a Japanese embassy headed by Hasekura Tsunenaga to the Americas, and then continued to Europe.

[82][83] In 1868 Thomas Blake Glover, a Scottish merchant, was responsible for bringing the first steam locomotive, "Iron Duke", to Japan, which he demonstrated on an 8-mile track in the Ōura district of Nagasaki.

However, in 1891 the failure of a company proposing to build a line from Gotenba to Matsumoto ended the 'mania', and the Government realized a more planned approach to the network expansion it desired was required.

The Ou line from Fukushima to Yamagata, Akita and Aomori, serving the poorer northern Sea of Japan coastal prefectures, was seen as a priority for national development that was commercially unattractive.

[98] Of the many aspects of the revolution from above, the reforms extending the right to vote to women, strengthening labor unionization, and liberalizing the economy were some of the most enduring changes that stand to this day.

[99] In addition to the dissolution of the landlord class, the massive business conglomerates known as zaibatsu that had effectively controlled the Japanese economy for almost 100 years were also broken up and faced market competition.

[71] Until 1945, however, the labor movement had remained weak, impeded by lack of legal rights,[105] anti-union legislation,[71] management-organised factory councils, and political divisions between "cooperative" and radical unionists.

[106] At the encouragement of occupation authorities, a Trade Union Law allowing workers to organize, strike, and bargain collectively for the first time was passed by the Diet on 22 December 1945.

The early post-war years were devoted to rebuilding lost industrial capacity: major investments were made in electric power, coal, steel, and chemicals.

In 1978, Japan's Ministry of International Trade and Industry provided subsidies, which was illegal under international law, to help Japanese semiconductor companies sell their chips at artificially low prices in the United States while keeping prices high in Japan, a trade practice known as dumping[115] The net result of these adjustments was to increase the energy efficiency of manufacturing and to expand knowledge-intensive industries.

The buildup of industry during the Meiji period to the point where Japan could vie for world power was an important prelude to post-war growth from 1955 to 1973, and provided a pool of experienced labor.

Before and immediately after World War II, the transfer of numerous agricultural workers to modern industry resulted in rising productivity and only moderate wage increases.

[citation needed] As late as 1955, some 40% of the labor force still worked in agriculture, but this figure had declined to 17% by 1970 and to 7.2% by 1990 and under 5% in the 21st century as Japan imported more and more of its food and small family farms disappeared.

During the 1980s, jobs in wholesaling, retailing, finance, insurance, real estate, transportation, communications, and government grew rapidly, while secondary-sector employment remained stable.

Foreign and domestic demand for Japanese electronics also declined, and Japan seemed on the way to losing its leadership in the world semiconductor market to the United States, Korea and Taiwan.

[123] During the 1980s, the Japanese economy shifted its emphasis from primary and secondary activities (notably agriculture, manufacturing, and mining) to processing, with telecommunications and computers becoming increasingly vital.

This allowed local companies to invest in capital resources more easily than their overseas competitors, which reduced the price of Japanese-made goods and widened the trade surplus further.

The easily obtainable credit that had helped create and engorge the real-estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid.

[126] Once the near-zero interest rates failed to stop deflation, some economists, such as Paul Krugman, and some Japanese politicians spoke of deliberately causing (or at least creating the fear of) inflation.

However, in early April, Japanese Prime Minister Shinzo Abe announced that he declared state of emergency,[144] citing gave the nation its worst economic crisis since the end of World War II.

[148] In the year ending of March 2021 despite COVID-19 spreading, SoftBank Group made a record net profit of 45.88 billion, which is largely due to the debut of e-commerce company Coupang.