TEc Kabuki economics - On Japan 2010

Most news out of Japan say perhaps in the last 15-20 years sound like the country is mired in some sort of trouble.
This, however, may be a little unfair on a society that attained a fully mature developed economy and generally high levels of performance all-round.
True many of Japan's current woes are rooted in underlying trends across the developed world to which a number of specific factors may be added.

Despite its geographic location - the farthest of the Far East - Japan has up until recently been mostly tied to and regarded as a Western bloc developed country.
However, its growing economic ties with China, ASEAN countries, Australia, and India particularly strong trade flows with the first two probably represent an increasingly Asian-bound Japan.
As long as Western markets remain flat or sluggish most opportunities for the country's renowned exporting powerhouse will arise in the Asia-Pacific region.
That astonishing surge in exports to China is quite telling indeed.
A fallback adjustment will only reflect a more stable at high levels two-way trade between the world's 2nd. and 3rd. biggest economies whose spots now look interchangeable.

Japan's strengths may yet disprove those who dwell excessively on the 'lost decades' - while we may agree on the first,the second is open to question.
Before the financial meltdown the country had been picking up speed.
There is less room for expansion when an economy reaches maturity - a stable home market no longer able to generate first-time new demand from public and private sources.

In my view Japan will continue to seek and gain advantage from the buoyant regional markets closest to its borders.
These will provide a major contribution to enhancing growth, much harder to achieve in highly developed mature economies.