askchapo

The main thing is that Japan was an export-oriented economy, that was growing at a rapid rate all throughout the 70s and 80s, and it was seen as a threat to the US, particularly the U.S. manucturing companies. Japan was able to do this in part because their currency was kept at a low value, which meant that japanese products were cheap to import to the US, and due to Japan having heavy public investment in making sure that their products were cheap (they were world-leading in manufacturing automation for a long while) this meant that American companies couldn't compete against Japanese products. Then the Plaza-Accords happened, which, among other things, meant that Japan could no longer keep the value of their currency low, and along with some relaxations on real-estate speculation, meant that Japanese companies could no longer compete on price with the US, which meant that a shitload of their excess money went into real estate speculation instead, which caused the largest property bubble in Japanese history (I think at one point the Imperial Palace in Tokyo was technically worth more than the entirety of the GDP of the state of California). The bubble then naturally burst, but since Japan could no longer export their goods to the West to the same degree that they previously had, and with China taking up all the lower levels of the manufacturing chain, there was nothing for the japanese economy to actually produce, leading to the current stagnation.

A lot of people, particularly on the left, believes that the Plaza Accords were such a monumentally stupid decision by the Japanese government, because it didn't benefit Japan in any way and basically worked as an economic death sentence, leading us to conclude that the agreement must have been signed under some form of duress, which would be easy to do for the country that basically has an army occupying part of it.