Japan’s return from financial oblivion

The financial carnage of the past fortnight may seem like a once-in-a-lifetime nightmare for most Americans and Brits, but for the Japanese it has eerie parallels with their own gigantic bubble of the late 1980s, the inevitable crash, and the slow upward path to recovery. Cheap money and lax regulation fed an unsustainable property boom: at the height of the bubble, Japanese would tell you the land of the Imperial Palace in central Tokyo was "worth" more than the state of California.

Japanese bankers and investors who snapped up Manhattan skyscrapers, Hollywood studios, Pacific resorts and countless hotels and golf courses were no strangers to excess. Gold leaf topped the dishes at fashionable nightclubs. Japanese bidding pushed prices of Impressionist and Picasso paintings to world records.

One Japanese industrialist, Ryoei Saito,

stunned the art world not once but twice, first by paying world records for a Van Gogh and Renoir, and then announcing that he wished to be buried with the paintings.

When boom tuned to bust, credit dried up as Japanese banks hoarded cash, and recriminations duly followed over who was to blame, be it greedy and irresponsible bankers, or lax and complicit regulators. Japanese newspapers and politicians fumed over rewarding private failure with public money; and there were plenty of spectacular bankruptcies, bank nationalisations and shotgun mergers.

The good news is that after what Japanese call ushinawareta junen, or the 'lost decade' of the 1990s, the world's second-biggest economy is now firmly back on its feet. In Tokyo, clusters of new skyscrapers have sprung up like mushrooms from dead wood. There are new department stores, new luxury hotels, and new underground lines.

Arriving at Tokyo Station, where high-speed shinkansen trains fan out across the archipelago, I could hardly move in the vast subterranean concourse for the crush of