The crisis of the Japanese economy in the 90s: impacts of the speculative bubble

ABSTRACT From 1953 to 1992, Japan reached the highest economic growth rates among industrialized countries. This performance was achieved despite two oil shocks and the endaka - the continuous rise of the yen vis-à-vis the dollar. This long-term growth cycle came to a sudden halt in early 90’s. Japanese economy stagnated while other industrialized countries continued growing. This was mainly due to the “economic bubkle” burst. From 1990 to 1992, the value of urban land and of the stock market index were cut to almost half. As a result, Japanese banks accumulated US$ 800 billion performing assets. This paper intends to analyse the Japanese “bubble economy crisis” and its long-term impacts on the Japanese economy, on its financial system and on its bilateral relations with the United States.