Conclusion

Abstract

In the long march of Japan’s postwar economic development there had been periodic dips in economic performance, but the overall picture was one of increasing wealth and prosperity. This came to a halt in the early 1990s, and since then the Japanese economy has been relatively stagnant. Large fiscal measures and public works projects failed to lift it out of stagnation, and added only to the debt burden of the public sector. Amid this economic drift, the Asian financial crisis of 1997 had a sharp, painful impact on economic conditions in Japan. Spreading economic gloom and the collapse of large banking and securities companies prompted the government to rethink its policy strategies and take more active measures in resolving the festering banking crisis in order to restore economic growth. Reform of the financial sector was only one of the many necessary tasks that confronted the government, but in his short time in office Prime Minister Obuchi failed to implement any comprehensive solution to the economic crisis.