Recession, Japanese-Style

Capital is getting more expensive, workers are balking at having to work so hard, and the Golden Age seems to be over

For months the Japanese searched fitfully for the right word to describe what was happening. At the Bank of Japan, the nation's central bank, officials spoke of "an adjustment phase." Prime Minister Kiichi Miyazawa admitted only to "a difficult situation." The Economic Planning Agency, the government's record keeper, referred delicately to a "retreat." Then two weeks ago, for the first time since 1987, the agency dropped its boilerplate reference to the "expansion" from its closely watched Monthly Economic Report, and the word game was over. Japan's economy, the world's second largest, conceded the experts, was in recession.

That admission confirmed the...