■ The invisible second occupation
As of the end of 2025, postwar Japan is facing an unprecedented crisis. The number of births in 2024 fell below 700,000, about a quarter of the number during the first baby boom (1947-49) immediately after the war. The population is estimated to fall below 120 million in 2026 and to reach 86.74 million by 2060. Even if people marry, they cannot expect to earn enough to raise children, leading to a sharp increase in the unmarried rate. The natural decline in birth rates and population continues unabated. As a result, Japan is experiencing an aging population and a rapid decline in the labor force. Meanwhile, over the 30 years since 1996, real wages for Japanese workers have fallen by approximately 20%, making it the country with the worst wage decline in the world. While Japan had the highest nominal gross domestic product (GDP) per capita in 2000 , by 2024 it had fallen to 38th place, overtaken by South Korea and Taiwan. This type of information is now common knowledge.
People call this the "Lost Thirty Years." So what was the primary cause of Japan's decline that began in the early 1990s? It was US retaliation against Japan. Following the Pacific War, the US neutralized Japan, which had once again become a threat , and restructured Japan's military, economic, and political systems solely to benefit the US . This US control of Japan can be called an "invisible American occupation," in contrast to the US military occupation of Japan from 1945 to 1952. Following the 1945 defeat, Japan was forced into a second defeat at the hands of the US following the collapse of the bubble economy in 1991.
Thirty years have passed since the second defeat, and yet this time, no miracle has occurred. It seems that, except for extreme nationalists, few people dream of repeating the success stories of Japan's rise to become one of the "five great powers" during the prewar Taisho period and its postwar period of high economic growth, which was hailed as "Miracle Japan." Prime Minister Sanae Takaichi, who assumed the guise of a far-right politician in October 2025, declared her determination to "push Japan to new heights and make it shine once again at the center of the world." Perhaps this is because a society that once felt it had reached the height of prosperity but continues to stagnate for a long time has robbed people of their hunger for success, and people implicitly feel that they are aboard a drifting ship.
It is no exaggeration to say that Japan is once again being occupied by the United States. However, this has been happening invisibly to the general public. What is clear is that over the past 30 years, Japan's international standing has declined, large corporations have accumulated unprecedented amounts of internal reserves, and foreign shareholders have been given preferential treatment, while workers' incomes have not increased, the population is rapidly aging and declining in birthrate, and social security systems such as nursing care, medical care, and welfare are on the verge of crisis. Society is shrouded in a stagnant mood and vague anxiety, but there is no sign of American manipulation in this regard.
So how was the "invisible second occupation" carried out as a result of retaliation against Japan ? First, I will provide an overview of the economic friction between Japan and the United States and its intensification from the 1970s to the 1980s, the 1985 Plaza Accord (adjustment of the strong yen), the bubble economy and its collapse, and the events that led to "retaliation against Japan and the remodeling of Japan (the second occupation)," before moving on to the main topic.
■ US retaliation against Japan and the reshaping of Japan
Postwar Japan's "Success" and the Beginnings of Friction
After World War II, Japan was democratized under the US occupation policy, and the special procurement demand generated by the Korean War gave impetus to economic recovery, leading to a period of rapid economic growth from the 1950s. Japanese-style management, characterized by bureaucratic-led industrial policy, cross-shareholding structures between companies, and long-term, stable employment practices, was recognized as a "success model" that attracted global attention from the 1970s to the 1980s.
However, this success also posed the seeds of friction with the United States. In the 1980s in particular, Japan's export offensive in sectors such as automobiles, semiconductors, and steel put pressure on American industry, and Japan's significant trade surplus exacerbated the "trade imbalance." Troubled by twin deficits, the United States viewed the closed nature of the Japanese market, bureaucratic regulations, and opaque corporate governance as "unfair practices," and intensified calls for structural reform.
During this period, criticism of Japan, known as "Japan bashing," increased in the United States, and economic friction went beyond mere trade issues to become an institutional and cultural conflict for the United States, as seen in the argument that Japan was different.
The Structure of Retaliation against Japan: From the Plaza Accord to the Annual Reform Requests
The 1985 Plaza Accord was a turning point in the friction between Japan and the United States. The United States led the way in currency adjustments, leading to a rapid appreciation of the yen. This dealt a blow to Japan's export industry, and triggered the domestic bubble economy, which was accompanied by a reduction in interest rates.
After the collapse of the bubble economy in the early 1990s, Japan fell into a long-term economic stagnation . The United States, as if waiting for this, began to implement its plan to weaken Japan. In 1994, the United States began to present the Japanese government with the "US Japan Regulatory Reform Initiative," continuously and systematically demanding institutional reforms. This document presented a blueprint for "reforming Japan" for the United States, covering a wide range of areas, including the liberalization of the financial system, the elimination of cross-shareholdings, shareholder-oriented corporate governance, deregulation, and transparency in public works projects.
Japan's bureaucrats and other political and business elites obediently complied with these demands while securing their own interests. The Japanese government, as seen in the Koizumi Junichiro administration, used the word "reform" to gloss over the US-led transformation of Japan. "Reform" promoted the restructuring of Japan's domestic political and economic systems, accelerating the transition from the traditional bureaucratic-led model to a market-based system. The US demands on Japan were not simply to resolve economic friction, but to reconstruct Japan's institutional framework itself.
In security and military affairs, Japan is integrated with the United States
During the "lost 30 years" that began with the end of the Cold War, the abrogation (abolishing) of the Japan-US Security Treaty was removed from the national election agenda . Under the 1955 system, the Japan Socialist Party, which advocated peace and constitutional protection and the abolition of the security treaty, was effectively dissolved in the 1990s, and Japan's security and foreign policy moved toward absorption and integration with the United States.
The enactment of Japan's new security legislation in 2015, which allowed the exercise of the right of collective self-defense, subordinately integrated the Self-Defense Forces under the command of the U.S. military. The Japan-U.S. Security Treaty was altered, making Japan a country capable of fighting overseas alongside the United States. China's rise has given rise to a new Cold War of U.S.-China conflict. Japan is the only Asian country to be involved in the U.S. strategy to contain China as a secondary player, along with the United Kingdom and Australia , and military tensions with China over the sovereignty of the Senkaku Islands have been hyped in the media in connection with a Taiwan crisis .
If the opposition parties were to call for the abolition of the security treaty in a national election , they would not even be able to work together, and the Japanese Communist Party, the only party that includes the abolition of the security treaty in its party platform, is pandering to the times by saying in the general election that "in the coalition government we are aiming for, we will not seek to agree on the abolition of the security treaty."
For Japanese voters, the Japan-US Security Treaty is now a given, and calling for its abolition is out of the question. However, the security treaty system is undoubtedly a chronic disease of postwar Japan, and is the root cause of Japan's economic stagnation and relative poverty that has continued for nearly 35 years since the end of the Cold War and the collapse of the bubble economy . This will be discussed in more detail later in the "bottle cap" argument.
Institutional background of the "Lost 30 Years"
The so-called "lost decade" eventually came to be known as the "lost 30 years," and it had a serious impact on society as a whole, with slowing economic growth, stagnant wages, the decline of rural areas, and instability among young people.
This stagnation should not be seen as a mere cyclical failure, but as a side effect of institutional and structural reform. In the process of introducing American-style market principles, Japan's long-term employment system, corporate communities, and the stability of local economies were shaken, and traditional social foundations were weakened.
Furthermore, reforms to the political funding system (changing the routes for corporate donations) and changes in the media structure have prompted a restructuring of the legitimacy of the traditional elite, transforming the very framework of the narrative of "postwar Japan."
Media and the Structure of Memory: Untold Conflicts and Reforms
This process of retaliation against Japan and institutional reform has been barely mentioned in the Japanese media. In English-speaking countries, US demands on Japan and institutional intervention are explicitly discussed, but in Japan, "friction" and "reforms" are often treated as economic and technical issues, and the political and institutional context is diluted.
The background to this is the "sovereign structure dependent on the United States" that has existed since the San Francisco Peace Treaty. Although Japan is technically an independent country, it has relied on the United States for much of its security, economy, and institutional design. However, the media has refrained from discussing how friction with the United States has changed Japan's structure, and has instead played a role in concentrating the "postwar" narrative on "recovery from defeat."
The "Lost Thirty Years" should be redefined as the result of friction with the United States and institutional reform. The long-term stagnation experienced by Japan is the combined result of institutional transformation due to external pressure and the resulting social disconnection, and is not simply a failure of economic policy. We should redefine the "postwar" narrative and expand it from "post-defeat" to "post-reform." Based on this, we should seek to break away from the invisible occupation that forced "reform" upon us.