Heisei Period - Events

Events

1989 marked the culmination of one of the most rapid economic growth spurts in Japanese history. With a strong yen and a favorable exchange rate with the US$, the Bank of Japan kept interest rates low, sparking an investment boom that drove Tokyo property values up 60 percent within the year. Shortly before New Year's Day, the Nikkei 225 reached its record high of 39,000. By 1991, it had fallen to 15,000, signifying the end of Japan's famed "bubble economy". Subsequently, Japan experienced the "Lost Decade", which actually consisted of more than ten years of price deflation and largely stagnant GDP as Japan's banks struggled to resolve their bad debts and companies in other sectors struggled to restructure.

The Recruit scandal of 1988 had already eroded public confidence in the Liberal Democratic Party (LDP), which had controlled the Japanese government for 38 years. In 1993, the LDP was ousted by a coalition led by Morihiro Hosokawa. However, the coalition collapsed as parties had gathered only to overthrow LDP, and lacked a unified position on almost every social issue. The LDP returned to the government in 1994, when it helped to elect Japan Socialist (later Social Democrat) Tomiichi Murayama as prime minister.

In 1995, there was a large 6.8 earthquake in Kobe, and sarin gas terrorist attacks were carried out on the Tokyo Metro by the doomsday cult Aum Shinrikyo. Failure of the Japanese government to react to these events promptly led to the formation of non-government organisations which have been playing an increasingly important role in Japanese politics since.

During this period, Japan reemerged as a military power. In 1991, Japan pledged billions of U.S. dollars for the Gulf War but constitutional arguments prevented a participation in actual war. Iran criticised Japan for just pledging money and did not appreciate the way Japan co-operated in the Gulf War. Minesweepers were sent after the war as a part of the reconstruction effort. Following the Iraq War, in 2003, Prime Minister Junichiro Koizumi's Cabinet approved a plan to send about 1,000 soldiers of the Japan Self-Defense Forces to help in Iraq's reconstruction, the biggest overseas troop deployment since World War II without the sanction of the UN.

On 23 October 2004, the Heisei 16 Niigata Prefecture Earthquakes rocked the Hokuriku region, killing 52 and injuring hundreds (see 2004 Chūetsu earthquake).

After an election defeat, Prime Minister Shinzō Abe resigned suddenly, and in Autumn 2007 Yasuo Fukuda became Prime Minister. Fukuda in turn resigned on September 2008 citing political failings, and Taro Aso was selected by his party.

In August 2009, for the first time, the Democratic Party of Japan (DPJ) won 308 seats in the lower house election, which ended 50 years of political domination by the LDP. As a result of the election, Taro Aso resigned as leader of the LDP, and Yukio Hatoyama, president of DPJ became Prime Minister on 16 September 2009. However, DPJ soon became mired in party financing scandals, particularly involving aides close to Ichirō Ozawa. Naoto Kan was chosen by the DPJ as the next Prime Minister, but he soon lost a working majority in the House of Councillors election, and the 2010 Senkaku boat collision incident caused increased tension between Japan and China. The 2009–2010 Toyota vehicle recalls also took place during this time.

In 2011 a Sumo tourney was cancelled for the first time in 65 years over a match fixing scandal, while the Kuril Islands dispute remained unresolved.

On 11 March 2011, Japan suffered the strongest recorded earthquake in its history, affecting places in the northeast of Honshū, including the Tokyo area. The quake's magnitude of 9.0 surpassed that of the severe 2004 megathrust earthquake. A tsunami with waves of up to 10 meters (32.5 feet) flooded inland areas several kilometers from shore, causing a large number of considerable fires. The epicenter of the quake lay so close to coastal villages and towns that thousands could not flee in time, despite a tsunami warning system. At the Fukushima Daiichi (Fukushima I) and three other nuclear power plants, there occurred serious problems with the cooling systems, ultimately leading to the most serious case of radioactive contamination since the Chernobyl disaster (see 2011 Tōhoku earthquake and tsunami, Fukushima I nuclear accidents), as well as ongoing electric power shortages. Following the earthquake, for the first time, the Emperor addressed the nation in a pre-recorded television broadcast.

In August 2011, Kan resigned, and Yoshihiko Noda became Prime Minister. Later that year Olympus Corporation admitted major accounting irregularities. (see Tobashi scheme). Noda pushed for Japan to consider joining the Trans-Pacific Strategic Economic Partnership.