The Tokyo and Osaka stock markets, which had been climbing with heady abandon for more than a year, plummeted at news of a possible Korean truce. Speculative issues such as Nippon Heiwa Sangyo (Japan Peace Industry), which had soared to 400 yen in early February, toppled to 82. Even blue chips like Mitsuokoshi department store tumbled from 670 to 495 yen. Last week the market recovered slightly, but was still far down from its peak.

Long ago, a few farsighted Japanese warned that, but for U.S. spending on the Korean war, Japan's economy would be in perilous shape. But...

Want the full story?

Subscribe Now


Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!