Post-war Boom

The Japanese economy suffered greatly from World War II. Allied bombing destroyed many of the nation's factories and nearly leveled most large cities. Many Japanese were forced out of work. Much of the population lived in dire conditions in small rural villages, and they depended on friends and neighbors to survive.

Japan was almost closed off from the outside world because many of its trading ships had been destroyed. The value of its currency, the yen, dropped so low that Japan could not afford to purchase many foreign goods.

Recovering from these losses took about a decade of effort. The United States provided financial assistance, but the Japanese national government played the central role in promoting reconstruction.

After the war, the government began to guide and direct the nation's industries. The government formed the Ministry of International Trade and Industry to identify the industries in Japan that needed to be developed. Then the Ministry of Finance directed investment funds toward these enterprises. The Japanese tradition of working hard, saving money, and investing wisely helped the nation become economically stable. By the mid-1950's, the output of most Japanese industries matched their prewar levels.

From 1955 to 1993, a single conservative party called the Liberal Democratic Party (LDP) dominated national politics. The Liberal Democratic Party consistently won the most seats in the Diet as well as in the prefectural and local assemblies. The LDP strongly advocated Japan's economic growth, and it put into effect many successful policies.

Many social changes occurred during the postwar years. Fewer and fewer people stayed in rural areas to earn a living by farming. Instead, they moved to cities and became workers in manufacturing or service industries. Families saw their incomes doubling and tripling within a generation.

Cooperation and harmony continued to be prized ideals in Japan. But the pressures to conform to society's expectations were less apparent in large cities than in the small villages. Young people felt freer to be individuals than their parents and grandparents had.

Even the imperial family took part in some changes. In 1959, Crown Prince Akihito broke tradition by marrying a commoner, Michiko Shoda, the daughter of a wealthy industrialist. In 1971, Emperor Hirohito and Empress Nagako visited Western Europe. This visit marked the first time that a reigning Japanese emperor had ever left the country.