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The Plaza Accord and the endaka turn

18 events 1 source 1981 to June 1988 published 23 Jul 2026, 01:01

The hinge before the bubble: US pressure, market opening, the Plaza Accord yen surge, endaka recession, and the Maekawa reports that push Japan toward domestic-demand and structural reform.

The hinge before the bubble: US pressure, market opening, the Plaza Accord yen surge, endaka recession, and the Maekawa reports that push Japan toward domestic-demand and structural reform.

Figures Richard Werner

Linked to

this parallel The world trade and money order this part of Princes of the Yen: Japan built, bubbled, and broken this parallel 1973: the postwar order breaks this part of Production and labor

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    U.S.-Japan Wise Men's Group calls for open Japanese markets

    also in Princes of the Yen: Japan built, bubbled, and broken

    In 1981 the U.S.-Japan Wise Men's Group reported that Japan needed to make much greater efforts to open its domestic markets to goods, services, and capital to a degree equal to the United States.

    • The so-called U.S.-Japan Wise Men’s Group reported in 1981 that there was a need for Japan to make much greater efforts to open its domestic markets to the inflow of goods, services, and capital to a degree equal to that of the United States.11
      Princes of the Yen
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    Sasaki calls for a five-year plan to transform Japan's economy

    also in Princes of the Yen: Japan built, bubbled, and broken

    In January 1983 former BoJ governor Tadashi Sasaki, as head of the Keizai Doyukai, called for a five-year plan for transforming and liberalizing the Japanese economy, titled 'Toward Consciousness and Behavior of a World Nation.'

    • Having handed the BoJ baton on to Prince Maekawa, Sasaki had become head of the Keizai Dōyūkai (Japan Association of Corporate Executives), and as such, in January 1983 he called for a five-year plan for transforming and liberalizing the Japanese economy, entitled “Toward Consciousness and Behavior of a World Nation.”45
      Princes of the Yen
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    Deposit interest rate deregulation begins

    also in Princes of the Yen: Japan built, bubbled, and broken

    Gradual deregulation of Japanese deposit interest rates began in October 1985 as part of broader financial liberalization.

    • Liberalization of capital flows in December 1980, gradual deregulation of deposit interest rates from October 1985, increased creation of debt markets, and the introduction of more short-term money market and general open market operations by the central bank all meant that other monetary policy tools could be used by the central bank to achieve its goals, while there was the possibility that window guidance itself would become less effective in such an environment.
      Princes of the Yen
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    Nakasone forms the Maekawa advisory group

    also in Princes of the Yen: Japan built, bubbled, and broken

    Prime Minister Yasuhiro Nakasone created the Advisory Group on Economic Structural Adjustment for International Harmony and appointed Haruo Maekawa to head it, charged with studying how Japan's economic and social structure should change.

    • On October 31, 1985, Japan’s prime minister, Yasuhiro Nakasone, formed the Study Group on Adjusting the Economic Structure for International Cooperation, officially translated into English as the Advisory Group on Economic Structural Adjustment for International Harmony.
      Princes of the Yen
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    Maekawa report submitted to the prime minister

    also in Princes of the Yen: Japan built, bubbled, and broken

    After nineteen meetings over five months, Maekawa's advisory group submitted its recommendations on April 7, 1986, calling for a historical transformation of Japan's economic structure toward domestic demand-led growth and deregulation.

    • Over the coming five months, the Advisory Group met nineteen times, and on April 7, 1986, it submitted its recommendations to the prime minister.53
      Princes of the Yen
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    Japanese capital floods world markets

    also in Japan's asset bubble: credit orders, land, stocks, and the Nikkei, Princes of the Yen: Japan built, bubbled, and broken

    From around 1986 until 1990, unprecedented Japanese overseas investment flowed into real estate and corporate takeovers worldwide; in 1987 net long-term foreign investment was almost twice the record current account surplus.

    • From around 1986 until 1990, Japanese money flooded the world. From real estate in New York, Hawaii, and Australia to corporate takeovers in the United States, Europe, and Asia, Japanese money seemed to buy up the planet.
      Princes of the Yen
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    Second Maekawa report announced

    also in Princes of the Yen: Japan built, bubbled, and broken

    An updated Maekawa report, expanded from eleven to forty-one pages, reiterated the first report's goals with detailed concrete changes and a timetable for structural transformation by the year 2000.

    • In May 1987, a new, updated Maekawa report was announced. This report had been expanded from eleven pages to forty-one and basically reiterated the points of the first report but included a much more detailed set of concrete changes that Japan should undertake.
      Princes of the Yen
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    Fukui endorses continued monetary easing to implement structural reform

    also in Japan's asset bubble: credit orders, land, stocks, and the Nikkei, Paper money, central banks, and credit creation, Princes of the Yen: Japan built, bubbled, and broken, The Bank of Japan's window-guidance machine

    In July 1987, shortly after the second Maekawa report, Toshihiko Fukui, head of the department implementing window guidance, said the right central bank policy for structural transformation was to continue monetary easing and expand bank loans.

    • We saw above that the head of the department that implemented window guidance credit controls, Toshihiko Fukui, had said in July 1987, soon after the publication of the second Maekawa report, that suitable central bank policy to implement the structural transformation of Japan’s economy was to “continue with the monetary easing policy” and, explicitly, for “bank loans to expand.”
      Princes of the Yen
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