Why Is The Yen So Devalued Now? Japanese Economy Explained

History Documentaries

After WW2, Japan transitioned to a state-controlled economy, shifting production from weapons to consumer goods. The Bank of Japan managed credit allocation, which played a central role in Japan’s success. From 1985-1989, the country experienced a credit-fuelled bubble, with real estate and stock prices soaring. The 1990 stock market crash led to land and asset price collapses, bankruptcies, and economic stagnation. Critics accused the Ministry of Finance and the Bank of Japan of mismanaging the economy during the bubble and subsequent recession.

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