ABSTRACT
Having analyzed the events of the past, and having criticized where critique is due, this chapter is addressed to investors and businesspeople who are interested in identifying the implications of our findings for investment strategy. The conclusion first: Contrary to popular opinion, Japan's recession is not the result of deep problems with its system. It has been artificially created by the Bank of Japan to implement its structural change agenda. This also means that whenever the princes at the central bank decide to reflate, a recovery could be far stronger than many observers would expect. Moreover, in terms of sectoral investment allocation, the structural reform agenda implies that the ongoing changes in Japan are significant, they are likely to continue and they offer historic business opportunities for overseas companies. The upshot is that Japan must not be written off. To the contrary, it presents an unusually attractive prospect. The second largest economy of the world, so far largely closed to foreign businesses, is now significantly opening up. Moreover, the recession has reduced prices in Japan, rendered rents and real estate affordable by international comparison, and has artificially damaged the health of Japanese competitors. Not to take advantage of such a rare opportunity would be a grave mistake from the viewpoint of overseas businesses and investors.
