Change is occurring on all fronts. Japan's big companies are finally moving to restructure and cut costs, Japan's stock market is behaving as it never has before, and Japan's government will take some action next year to deal with a budget deficit larger proportionately than the U.S. deficit was in the early '90s.
Nothing is without hidden problems.
Companies are pushing workers into early retirement, but often they don't have funds available for the customary lump-sum pension payments. That may further drive up a market that has risen 38 percent since September 1998, in terms of the Nikkei average. Japan's stock market now has start-up companies and hot Internet issues, such as Softbank, the company that owns 28 percent of the U.S. firm Yahoo and many other Web companies. Softbank stock has risen more than 500 percent this year. Legendary stability not lost Yet government action on the public debt may well spark inflation and higher interest rates next year, threatening the stock market, financial experts point out.