This chapter discusses the main elements of Japan’s political and economic system which underpin and can either promote or inhibit its international role as well as the crucial perceptional issues of how the Japanese feel about themselves and the outside world. It examines the state of the vital US- Japanese relationship, Japan’s regional aspirations, its defence posture, and its non-military contributions to the international order. The chapter considers how far the Japanese are able and willing to move into a more balanced and proactive role in the “new world order”. Japan is a major trader and overseas investor, the world’s largest creditor nation and provider of development aid, and increasingly an innovator in new technologies. The Japanese tended to see threats coming by economic means rather than military, being indirect rather than direct, and arising from Third World disputes rather than superpower confrontation.