Trends in Japan’s recent capital accumulation regime can be classified into three phases: the bubble period (1986-91), the first half of the bubble bust period (1991-97), and the latter half of the bubble bust period, i.e. the malfunctioning period (1998 until now). With a focus on the last period, this chapter analyzes the mechanisms of the malfunctioning of Japan’s capital accumulation regime since the watershed year of 1998, and gives perspectives for countermeasures.