May 25, 2002

U.S. views on Japan changed a lot from the second half of the 1990s. Some people shares an extreme view of Japan such that Japan is ruined and goes (a dying country).

I often discuss with a U.S. university researcher. During discussions,  I refer to macro indexes such as GNP, GDP, foreign trade surplus, R&D expenditures and patent, saving rate and etc. I also refer to qualitative indexes such as an educational level,  culture, a degree of societies' maturity, a quality of life and etc. There is no index indicating that Japan is behind to the U.S.

The unemployment rate has increased in recent years by factory relocation to China which has  huge number of low-wage workers. The bad-loans held by Japanese banks is another problem to be solved by Japan. I understand that Japan, as well as other countries, needs to reform her economic structure continuously in order to adapt herself to the changing environment. However it might damage Japan's national interests if such policy is taken in a manner that makes  companies go bankrupt. A reform should be performed constructively.

 One should understand that Japanese economic structure is far stronger and healthier than that of U.S. Japan is the largest creditor country in the world, and the U.S. is the largest debtor country. Japan has been enjoying huge trade surpluses in the past several decades, but U.S. has been suffering from huge trade deficits during the same period. The facts indicate a Japanese economic competitive advantage. One should not be confused by biased information that intentionally draw negative and pessimistic images of Japan.  
　

The homepage was prepared to brew  correct understanding on Japan.
　

  "Japan as No.1" is a phrase that was frequently used in the 1980s. Japanese economy swept over the world at the decade. However Japan encountered political confusion and economic stagnation in the 1990s. The anti-Japanese fear of the U.S. of the 1980s turned to the tendency despising Japan. Japan is considered as a country which does not become in any way. Americans now believe that China is a sole American competitor/partner. Such a view spread to the U.S. Government and among the U.S. people. Moreover, Americans are indifferent to Japan. A visit of the China' important person is greatly reported by American newspapers and air. On the other hand, a visit of Japan's prime minister or ministers have not taken up. An Indifference to Japan among U.S. people might be a reflection of the posture taken by the US media.

Are Japanese government  bond buyers thick as two planks? 

Japanese Government Bond were down-rated to the level Botswana on May 2002 by Moody’s. Standard and Poor’s and Fitch also downgraded to a similar level.

Economic theory says that both time value of money and risk are reflected to an interest rate. Japanese government bond yields just 1.335%., the lowest interest rate among the world and is still attractting enough demand even after the down-rating. Furthermore, Yen was ironically appreciated against dollar immediately after the down-rating.

 Is the economic theory wrong, or are the bond buyers thick as two planks? 

It may be a fads to write misleading and skimming articles and papers on Japanese economy and business practices recently (e.g., Harvard Prof.'s article that appeared on Foreign Affairs, 2002).　However most of them are wrote by such authors who have superficial or no knowledge and no competence in Japanese language.