Pop! Goes the Bubble

Japan gropes for its confidence as the yen falters and the stock market plunges

Japan: land of the rising yen, unstoppable economic growth and perpetual bullishness. That was the image that emerged in the 1980s, as Japan's financial juggernaut rolled forward with seldom a pause or a setback. The most striking symbol was Tokyo's stock market, which consistently scaled heights that seemed unattainable by any global standard. Property values rose astronomically, yet inflation was virtually nonexistent. The money machine kept churning, as if powered by some magic force, difficult to fathom and nearly invulnerable to financial stresses and strains in the rest of the world.

Suddenly Japan is caught in a powerful downdraft of pessimism....