Japan on the Upswing

Sound Bite

Japan's "bubble economy" of the late 1980s was one of the most spectacular financial collapses in modern history, wiping out an estimated ¥1,200 trillion — roughly $11 trillion — in combined stock and real estate value between 1990 and 2003. But how did it actually happen, and who were the people caught up in it? <em>Japan on the Upswing</em> by Yoshiyuki Iwamoto answers those questions with the kind of ground-level detail that only comes from decades of living and working inside Japanese business culture.

About the Book

Japan's "bubble economy" of the late 1980s was one of the most spectacular financial collapses in modern history, wiping out an estimated ¥1,200 trillion — roughly $11 trillion — in combined stock and real estate value between 1990 and 2003. But how did it actually happen, and who were the people caught up in it? Japan on the Upswing by Yoshiyuki Iwamoto answers those questions with the kind of ground-level detail that only comes from decades of living and working inside Japanese business culture.

Iwamoto draws on his experience at Dentsu, once the world's largest advertising agency, as a business consultant, and as a longtime reader of the Nihon Keizai Shimbun — Japan's equivalent of the Wall Street Journal — to reconstruct the human story behind the numbers. He explains how "Jyusen" mortgage companies funneled reckless real estate loans, how agricultural co-operatives became unlikely players in a ¥6 trillion bad-loan disaster, and how "Ji-a-ge" land operators — some with organized crime connections — quietly assembled urban land parcels for developers. He also pulls back the curtain on the cozy, corrupt relationship between bank officials and Ministry of Finance inspectors, where lavish entertainment and carefully dropped hints about upcoming inspections were simply standard business practice.

The book does not stop at the wreckage. Its second half examines Japan's genuine recovery, profiling companies that drove the turnaround — Canon's patient development of a copier technology that bypassed Xerox's core patents, Panasonic's aggressive restructuring under President Kunio Nakamura, Sony's simultaneous push into hardware and a vast software library anchored by its MGM acquisition, and the unlikely rise of game software giant Enix, founded by a trained architect with no programming background whatsoever.

Written for readers who want substance without academic jargon, the book also covers promissory note culture, the role of organized crime in land deals, and the political decisions — including the Takenaka reform scheme — that finally forced Japan's major banks to confront their bad loans honestly.

For anyone trying to understand how a sophisticated economy can go badly wrong, and then find its footing again, this is a richly detailed and readable account.