Japan's early history is lost in legend. The divine design of the empire—supposedly founded in 660 b.c. by the emperor Jimmu, a lineal descendant of the sun goddess and ancestor of the present emperor—was held as official dogma until 1945. Actually, reliable records date back only to about a.d. 400. In the first centuries of the Christian era the country was inhabited by numerous clans or tribal kingdoms ruled by priest-chiefs. Contacts with Korea were close, and bronze and iron implements were probably introduced by invaders from Korea around the 1st cent. By the 5th cent. the Yamato clan, whose original home was apparently in Kyushu, had settled in the vicinity of modern Kyoto and had established a loose control over the other clans of central and W Japan, laying the foundation of the Japanese state.

From the 6th to the 8th cent. the rapidly developing society gained much in the arts of civilization under the strong cultural influence of China, then flourishing in the splendor of the T'ang dynasty. Buddhism was introduced, and the Japanese upper classes assiduously studied Chinese language, literature, philosophy, art, science, and government, creating their own forms adapted from Chinese models. A partially successful attempt was made to set up a centralized, bureaucratic government like that of imperial China. The Yamato priest-chief assumed the dignity of an emperor, and an imposing capital city, modeled on the T'ang capital, was erected at Nara, to be succeeded by an equally imposing capital at Kyoto.

By the 9th cent., however, the powerful Fujiwara family had established a firm control over the imperial court. The Fujiwara influence and the power of the Buddhist priesthood undermined the authority of the imperial government. Provincial gentry—particularly the great clans who opposed the Fujiwara—evaded imperial taxes and grew strong. A feudal system developed. Civil warfare was almost continuous in the 12th cent.

The Minamoto family defeated their rivals, the Taira, and became masters of Japan. Their great leader, Yoritomo, took the title of shogun, established his capital at Kamakura, and set up a military dictatorship. For the next 700 years Japan was ruled by warriors. The old civil administration was not abolished, but gradually decayed, and the imperial court at Kyoto fell into obscurity. The Minamoto soon gave way to the Hojo, who managed the Kamakura administration as regents for puppet shoguns, much as the Fujiwara had controlled the imperial court.

In 1274 and again in 1281 the Mongols under Kublai Khan tried unsuccessfully to invade the country (see kamikaze). In 1331 the emperor Daigo II attempted to restore imperial rule. He failed, but the revolt brought about the downfall of the Kamakura regime. The Ashikaga family took over the shogunate in 1338 and settled at Kyoto, but were unable to consolidate their power. The next 250 years were marked by civil wars, during which the feudal barons (the daimyo) and the Buddhist monasteries built up local domains and private armies. Nevertheless, in the midst of incessant wars there was a brisk development of manufacturing and trade, typified by the rise of Sakai (later Osaka) as a free city not subject to feudal control. This period saw the birth of a middle class. Extensive maritime commerce was carried on with the continent and with SE Asia; Japanese traders and pirates dominated East Asian waters until the arrival of the Europeans in the 16th cent.

The first European contact with Japan was made by Portuguese sailors in 1542. A small trade with the West developed. Christianity was introduced by St. Francis Xavier, who reached Japan in 1549. In the late 16th cent. three warriors, Nobunaga, Hideyoshi, and Ieyasu, established military control over the whole country and succeeded one another in the dictatorship. Hideyoshi unsuccessfully invaded Korea in 1592 and 1596 in an effort to conquer China. After Hideyoshi's death, Ieyasu took the title of shogun, and his family ruled Japan for over 250 years. They set up at Yedo (later Tokyo) a centralized, efficient, but repressive system of feudal government (see Tokugawa). Stability and internal peace were secured, but social progress was stifled. Christianity was suppressed, and all intercourse with foreign countries was prohibited except for a Dutch trading post at Nagasaki.

Tokugawa society was rigidly divided into the daimyo, samurai, peasants, artisans, and merchants, in that order. The system was imbued with Confucian ideas of loyalty to superiors, and military virtues were cultivated by the ruling aristocracy (see bushido). Oppression of the peasants led to many sporadic uprisings. Yet despite feudal restrictions, production and trade expanded, the use of money and credit increased, flourishing cities grew up, and the rising merchant class acquired great wealth and economic power. Japan was in fact moving toward a capitalist system.

By the middle of the 19th cent. the country was ripe for change. Most daimyo were in debt to the merchants, and discontent was rife among impoverished but ambitious samurai. The great clans of W Japan, notably Choshu and Satsuma, had long been impatient of Tokugawa control. In 1854 an American naval officer, Matthew C. Perry, forced the opening of trade with the West. Japan was compelled to admit foreign merchants and to sign unequal treaties. Attacks on foreigners were answered by the bombardment of Kagoshima and Shimonoseki. Threatened from within and without, the shogunate collapsed. In 1867 a conspiracy engineered by the western clans and imperial court nobles forced the shogun's resignation. After brief fighting, the boy emperor Meiji was "restored" to power in the Meiji restoration (1868), and the imperial capital was transferred from Kyoto to Tokyo.

Although the Meiji restoration was originally inspired by antiforeign sentiment, Japan's new rulers quickly realized the impossibility of expelling the foreigners. Instead they strove to strengthen Japan by adopting the techniques of Western civilization. Under the leadership of an exceptionally able group of statesmen (who were chiefly samurai of the western clans) Japan was rapidly transformed into a modern industrial state and a great military power.

Feudalism was abolished in 1871. The defeat of the Satsuma rebellion in 1877 marked the end of opposition to the new regime. Emissaries were sent abroad to study Western military science, industrial technology, and political institutions. The administration was reorganized on Western lines. An efficient modern army and navy were created, and military conscription was introduced. Industrial development was actively fostered by the state, working in close cooperation with the great merchant houses. A new currency and banking system were established. New law codes were enacted. Primary education was made compulsory.

In 1889 the emperor granted a constitution, modeled in part on that of Prussia. Supreme authority was vested in the emperor, who in practice was largely a figurehead controlled by the clan oligarchy. Subordinate organs of government included a privy council, a cabinet, and a diet consisting of a partially elected house of peers and a fully elected house of representatives. Universal manhood suffrage was not granted until 1925.

After the Meiji restoration nationalistic feeling ran high. The old myths of imperial and racial divinity, rediscovered by scholars in the Tokugawa period, were revived, and the sentiment of loyalty to the emperor was actively propagated by the new government. Feudal glorification of the warrior and belief in the unique virtues of Japan's "Imperial Way" combined with the expansive drives of modern industrialism to produce a vigorous imperialism. At first concerned with defending Japanese independence against the Western powers, Japan soon joined them in the competition for an Asian empire. By 1899, Japan cast off the shackles of extraterritoriality, which allowed foreign powers to exempt themselves from Japanese law, thus avoiding taxes and tariffs. It was not until 1911 that full tariff autonomy was gained.

The First Sino-Japanese War (1894-95) marked the real emergence of imperial Japan, with acquisition of Taiwan and the Pescadores and also of the Liao-tung peninsula in Manchuria, which the great powers forced it to relinquish. An alliance with Great Britain in 1902 increased Japanese prestige, which reached a peak as a result of the Russo-Japanese War in 1904-5. Unexpectedly the Japanese smashed the might of Russia with speed and efficiency. The treaty of Portsmouth (see Portsmouth, Treaty of), ending the war, recognized Japan as a world power. A territorial foothold had been gained in Manchuria. In 1910, Japan was able to officially annex Korea, which they had controlled de facto since 1905. During World War I the Japanese secured the German interests in Shandong (later restored to China) and received the German-owned islands in the Pacific as mandates. In 1915, Japan presented the Twenty-one Demands designed to reduce China to a protectorate. The other world powers opposed those items that would have given Japan policy control in Chinese affairs, but China accepted the rest of the demands.

In 1918, Japan took the lead in Allied military intervention in Siberia, and Japanese troops remained there until 1922. These moves, together with an intensive program of naval armament, led to some friction with the United States, which was temporarily adjusted by the Washington Conference of 1921-22 (see naval conferences).

During the next decade the expansionist drive abated in Japan, and liberal and democratic forces gained ground. The power of the diet increased, party cabinets were formed (see Seiyukai), and despite police repression, labor and peasant unions attained some strength. Liberal and radical ideas became popular among students and intellectuals. Politics was dominated by big business (see zaibatsu), and businessmen were more interested in economic than in military expansion. Trade and industry, stimulated by World War I, continued to expand, though interrupted by the earthquake of 1923, which destroyed much of Tokyo and Yokohama. Agriculture, in contrast, remained depressed. Japan pursued a moderate policy toward China, relying chiefly on economic penetration and diplomacy to advance Japanese interests.

The moderate stance regarding China as well as other foreign policies pursued by the government displeased more extreme militarist and nationalist elements developing in Japan, some of whom disliked capitalism and advocated state socialism. Chief among these groups were the Kwantung army in Manchuria, young army and navy officers, and various organizations such as the Amur River Society, which included many prominent men. Militarist propaganda was aided by the depression of 1929, which ruined Japan's silk trade. In 1931 the Kwantung army precipitated an incident at Shenyang (Mukden) and promptly overran all of Manchuria, which was detached from China and set up as the puppet state of Manchukuo. When the League of Nations criticized Japan's action, Japan withdrew from the organization.

During the 1930s the military party gradually extended its control over the government, brought about an increase in armaments, and reached a working agreement with the zaibatsu. Military extremists instigated the assassination of Prime Minister Inukai in 1932 and an attempted coup in 1936. At the same time Japan was experiencing a great export boom, due largely to currency depreciation. From 1932 to 1937, Japan engaged in gradual economic and political penetration of N China. In July, 1937, after an incident at Beijing, Japanese troops invaded the northern provinces. Chinese resistance led to full-scale though undeclared war (see Sino-Japanese War, Second). A puppet Chinese government was installed at Nanjing in 1940.

Meanwhile relations with the Soviet Union were tense and worsened after Japan and Germany joined together against the Soviet Union in the Anti-Comintern Pact of 1936 (see Comintern). In 1938 and 1939 armed clashes took place on the Manchurian border. Japan then stepped up an armament program, extended state control over industry through the National Mobilization Act (1938), and intensified police repression of dissident elements. In 1940 all political parties were dissolved and were replaced by the state-sponsored Imperial Rule Assistance Association.

After World War II erupted (1939) in Europe, Japan signed a military alliance with Germany and Italy, sent troops to Indochina (1940), and announced the intention of creating a "Greater East Asia Co-Prosperity Sphere" under Japan's leadership. In Apr., 1941, a neutrality treaty with Russia was triumphantly concluded. In Oct., 1941, the militarists achieved complete control in Japan, when Gen. Hideki Tojo succeeded a civilian, Prince Fumimaro Konoye, as prime minister.

Unable to neutralize U.S. opposition to its actions in SE Asia, Japan opened hostilities against the United States and Great Britain on Dec. 7, 1941, by striking at Pearl Harbor, Singapore, and other Pacific possessions. The fortunes of war at first ran in favor of Japan, and by the end of 1942 the spread of Japanese military might over the Pacific to the doors of India and of Alaska was prodigious (see World War II). Then the tide turned; territory was lost to the Allies island by island; warfare reached Japan itself with intensive bombing; and finally in 1945, following the explosion of atomic bombs by the United States over Hiroshima and Nagasaki, Japan surrendered on Aug. 14, the formal surrender being on the U.S. battleship Missouri in Tokyo Harbor on Sept. 2, 1945.

The Japanese surrender at the end of World War II was unconditional, but the terms for Allied treatment of the conquered power had been laid down at the Potsdam Conference. The empire was dissolved, and Japan was deprived of all territories it had seized by force. The Japanese Empire at its height had included the southern half of Sakhalin, the Kuril Islands, the Ryukyu Islands, Taiwan, the Pescadores, Korea, the Bonin Islands, the Kwantung protectorate in Manchuria, and the island groups held as mandates from the League of Nations (the Caroline Islands, Marshall Islands, and Mariana Islands (see Northern Mariana Islands). In the early years of the war, Japan had conquered vast new territories, including a large part of China, SE Asia, the Philippines, and the Dutch East Indies. With defeat, Japan was reduced to its size before the imperialist adventure began.

The country was demilitarized, and steps were taken to bring forth "a peacefully inclined and responsible government." Industry was to be adequate for peacetime needs, but war-potential industries were forbidden. Until these conditions were fulfilled Japan was to be under Allied military occupation. The occupation began immediately under the command of Gen. Douglas MacArthur. A Far Eastern Commission, representing 11 Allied nations and an Allied council in Tokyo, was to supervise general policy. The commission, however, suffered from the rising tension between the USSR and the Western nations and did not function effectively, leaving the U.S. occupation forces in virtual control.

The occupation force controlled Japan through the existing machinery of Japanese government. A new constitution was adopted in 1946 and went into effect in 1947; the emperor publicly disclaimed his divinity. The general conservative trend in politics was tempered by the elections of 1947, which made the Social Democratic party headed by Tetsu Katayama the dominant force in a two-party coalition government. In 1948 the Social Democrats slipped to a secondary position in the coalition, and in 1949 they lost power completely when the conservatives took full charge under Shigeru Yoshida.

Many of the militarist leaders and generals were tried as war criminals and in 1948 many were convicted and executed, and an attempt was made to break up the zaibatsu. Economic revival proceeded slowly with much unemployment and a low level of production, which improved only gradually. In 1949, however, MacArthur loosened the bonds of military government, and many responsibilities were restored to local authorities. At San Francisco in Sept., 1951, a peace treaty was signed between Japan and most of its opponents in World War II. India and Burma (Myanmar) refused to attend the conference, and the USSR, Czechoslovakia, and Poland refused to sign the treaty. It nevertheless went into effect on Apr. 28, 1952, and Japan again assumed full sovereignty.

The elections in 1952 kept the conservative Liberal party and Premier Shigeru Yoshida in power. In Nov., 1954, the Japan Democratic party was founded. This new group attacked governmental corruption and advocated stable relations with the USSR and Communist China. In Dec., 1954, Yoshida resigned, and Ichiro Hatoyama, leader of the opposition, succeeded him. The Liberal and Japan Democratic parties merged in 1955 to become the Liberal Democratic party (LDP). Hatoyama resigned because of illness in 1956 and was succeeded by Tanzan Ishibashi of the LDP. Ishibashi was also forced to resign because of illness and was followed by fellow party member Nobusuke Kishi in 1957.

In the 1950s Japan signed peace treaties with Taiwan, India, Burma (Myanmar), the Philippines, and Indonesia. Reparations agreements were concluded with Burma (Myanmar), the Philippines, Indonesia, and South Vietnam, with reparations to be paid in the form of goods and services to stimulate Asian economic development. In 1951, Japan signed a security treaty with the United States, providing for U.S. defense of Japan against external attack and allowing the United States to station troops in the country. New security treaties with the United States were negotiated in 1960 and 1970. Many Japanese felt that military ties with the United States would draw them into another war. Student groups and labor unions, often led by Communists, demonstrated during the 1950s and 1960s against military alliances and nuclear testing.

Prime Minister Kishi was forced to resign in 1960 following the diet's acceptance, under pressure, of the U.S.-Japanese security treaty. He was succeeded by Hayato Ikeda, also of the LDP. Ikeda led his party to two resounding victories in 1960 and 1963. He resigned in 1964 because of illness and was replaced by Eisaku Sato, also of the LDP. Sato overcame strong opposition to his policies and managed to keep himself and his party in firm control of the government throughout the 1960s.

Opposition to the government because of its U.S. ties abated somewhat in the early 1970s when the United States agreed to relinquish its control of the Ryukyu Islands, including Okinawa, which had come under U.S. administration after World War II. All of the Ryukyus formally reverted to Japanese control in 1972. In that same year, Sato resigned and was succeeded by Kakuei Tanaka, also a Liberal Democrat. For his efforts in opposing the development of nuclear weapons in Japan, Sato was awarded the Nobel Peace Prize in 1974. Later that year, Tanaka resigned and was replaced as prime minister by Takeo Miki, another Liberal Democrat. Miki, who became embroiled in a scandal over his personal finances, was replaced by Takeo Fukuda. Though Fukuda was considered to be an expert in economic policy, he had difficulty in combating the economic downturn of the late 1970s. He was replaced by Masayoshi Ohira, who died in office in 1980 and was replaced by Zenko Suzuki.

In 1982, the more outspoken Yasuhiro Nakasone took office. He argued for an increase in Japan's defensive capability, extended his second term by an extra year, and appointed his own successor, Noboru Takeshita. The terms of both Takeshita and his replacement, Sosuke Uno, were cut short by influence-peddling and other scandals that shook the LDP and caused a public outcry for governmental reform. In the general election of 1989, the LDP lost in the upper house of the parliament for the first time in 35 years; nonetheless, LDP president Toshiki Kaifu became prime minister later that year. He drew much criticism for pledging $9 million to the United States for military operations in the Persian Gulf, and in 1991 he was succeeded as prime minister by Kiichi Miyazawa.

After the LDP split over the issue of political reforms in 1993, the Miyazawa government fell. None of Japan's political parties managed to win a majority in the subsequent elections. An opposition coalition formed a government and Morihiro Hosokawa became prime minister. Hosokawa resigned in 1994 and was succeeded by fellow coalition member Tsutomi Hata, who resigned after just two months in office. In June, 1994, Tomiichi Murayama was named prime minister of an unlikely coalition of Socialists (who later became the Social Democrats) and Liberal Democrats, thus becoming the nation's first Socialist leader since 1948.

During 1995, Japan was shaken by two major disasters. The worst earthquake in Japan in more than 70 years struck the Kobe region on Jan. 17, killing more than 6,400 people. On Mar. 20, lethal nerve gas was released through plastic bags left in the Tokyo subway system by members of the Aum Shinrikyo religious group; 12 people were killed, and about 5,000 others suffered ill effects.

Murayama resigned as prime minister early in 1996 and was succeeded by LDP leader Ryutaro Hashimoto. In 1997, Japan suffered a major economic crisis resulting from the failure of stock brokerage firms and banks. The financial industry was rocked by scandals, leading to a number of prosecutions and, in early 1998, the resignation of the finance minister and the governor of the Bank of Japan, the nation's central bank. Although Prime Minister Hashimoto announced a program of tax cuts and spending to spur the economy, Japan slipped into its deepest recession since the end of World War II. The country's bad debt was estimated at near $1 trillion when Keizo Obuchi was elected head of the LDP and succeeded Hashimoto as prime minister in mid-1998. In Oct., 1998, the parliament approved legislation to allow the government to nationalize failing banks and to commit more than $500 billion to rescue the nation's banking system. By the time Japan's economy began to revive somewhat in 1999, the government had spent more than $1 trillion in a series of economic stimulus packages that included numerous public works projects.

In Jan., 1999, the LDP agreed to form a coalition government with the Liberal party, and the New Komeito party (a Buddhist-influenced party) later joined the coalition. The Liberals withdrew from the government in Apr., 2000. Shortly afterward, Obuchi was incapacitated by a severe stroke and was replaced as prime minister by Yoshiro Mori, secretary-general of the LDP. lower-house elections the LDP-led coalition lost seats, but it retained control of the house and Mori remained prime minister. A series of political blunders undermined Mori, who was replaced by Junichiro Koizumi, an insurgent supported by the LDP rank and file, in Apr., 2001; the same month the New Conservative party joined the governing coalition. An LDP victory in upper-house elections in July, which the party had earlier been expected to lose, was regarded by Koizumi as a mandate for his government. Reform was resisted, however, by entrenched government bureaucrats as well as by LDP factions that would be affected by it, and Koizumi's government has tended to avoid difficult choices and largely has continued the status quo.

Despite that mandate and his initial popularity, Koizumi had difficulty passing more than superficial economic reforms, as powerful and entrenched bureaucratic and LDP interests resisted change. The stagnant economy, hindered by a domestic deflationary spiral that began in the early 1990s and did not clearly end until 2006 and by contraction overseas, experienced its fourth recession in 10 years in 2001. In November unemployment reached 5.5%, a postwar high. In part because of already high levels of government debt, Koizumi's government adopted a 2002 budget that reduced expenditures, instead of increasing spending to stimulate the economy. The economy improved beginning in 2002, but the government continued to fail to make any significant economic reforms. Also in 2002, Koizumi made a landmark visit to North Korea, which led to an agreement to establish diplomatic relations between Japan and North Korea.

Elections in 2003 resulted in large gains for the opposition Democratic party of Japan (DPJ), but the LDP-led coalition retained a significant majority in parliament. Following the election, the New Conservatives merged with the LDP. The LDP and New Komeito party largely held onto their majority in the July, 2004, upper house elections, but the DPJ made solid gains at the expense of smaller parties.

In 2005, Koizumi sought to win passage of a plan to privatize Japan Post, which includes Japan's largest savings and insurance systems in addition to the postal system, but failed to win support for it in the upper house when a sizable number of LDP members voted against it. Calling a snap lower-house election, Koizumi gained (Sept., 2005) a huge victory in which the LDP took 60% of the seats, and the following month secured passage of legislation to privatize Japan Post over the decade beginning in 2007. A 2006 proposal by Koizumi to allow women, and children through the maternal line, to succeed to the Japanese throne (because the current emperor has no grandsons) brought protests from Japanese conservatives. That opposition and the birth of a son to the emperor's younger son led the prime minister to shelve the proposed change.

Koizumi retired as prime minister in Sept., 2006; newly elected LDP-leader Shinzo Abe succeeded him in the post. The agency responsible for overseeing Japan's self-defense forces was upgraded to a ministry in Dec., 2006, and the forces' mandate was expanded to include international peacekeeping and relief. At the same time the Abe government enacted legislation designed to promote patriotism in Japanese schools. A series of financial scandals involving cabinet officials and electoral losses (July, 2007) that ended the LDP's control of the Diet's upper house led to Abe's resignation as prime minister in Sept., 2007. Liberal Democrat Yasuo Fukuda, a former chief cabinet secretary and the son of former Prime Minister Takeo Fukuda, was chosen as Abe's successor.

Fukuda's term in office turned out to be as brief as his predecessor's. An economic downturn and series of scandals hurt undermined his prime ministership, although there was an improvement in Japan's relations with China, including the first visit to Japan by a Chinese head of state (May, 2008) and an agreement (June, 2008) to develop jointly a contested natural gas field in the East China Sea. However, the opposition's control of the Diet's upper house enabled it to stymie the passage of significant legislation, including an economic stimulus package, and Fukuda resigned in Sept., 2008.

Taro Aso, an outspoken conservative and former foreign minister, became LDP party leader and prime minister. A series of stumbles and Japan's slide into recession in 2008 soon undermined Aso's government as well. The recession, which developed into the worst downturn since World War II as demand for Japanese exports plunged, led the government to propose stimulus packages cumulatively worth $27.4 trillion yen by Apr., 2009. Beginning in Mar., 2009, Japan also experienced a new round of deflation. Also that year, Japan joined the antipiracy forces off the Somali coast and in June expanded the powers of the self-defense forces to allow them to protect vessels of any nation from piracy.

After the LDP suffered losses in local elections in Tokyo in July, Aso moved to call parliamentary elections for late August. The DPJ subsequently won control of the Diet's lower house in a landslide, ending the LDP's postwar dominance of Japan's government; DPJ leader Yukio Hatoyama became prime minister. The DPJ assured control of the upper house as well by forming a coalition with two smaller parties, but one of the parties quit the coalition in May, 2010, after the government agreed to continue basing U.S. forces on Okinawa despite DPJ campaign promises to the contrary. Hatoyama subsequently resigned as DPJ leader and prime minister, and in June Naoto Kan, the finance minister, succeeded him; the new government did not change Hatoyama's decision concerning Okinawa. The DPJ subsequently lost control of the Diet's upper house in the July, 2010, elections, but in September Kan survived a DPJ leadership challenge from Ichiro Ozawa.

Funding scandals involving Ozawa and the foreign minister led (Mar., 2011) to calls for Kan to step down, but that was soon eclipsed by the effects of a 9.0 offshore earthquake and subsequent tsunami, which devastated many areas of the NE Honshu coast on March 11. More than 20,000 were killed or missing, mainly as a result of the tsunami, which overtopped many seawalls and reached as far as 5 mi (8 km) inland in some places. Damage was estimated at $210 billion, and the nation's economy suffered a slowdown as a result. Japan's worst natural disaster since the 1923 Tokyo earthquake also led to cooling failures at a nuclear power plant in Fukushima that resulted in meltdowns and the release of radioactive material into the air and sea.

In June, Kan, who had become to be regarded as indecisive in the aftermath of the disaster, survived a no-confidence vote and a rebellion by members of his own party by promising to step down after the worst of the nuclear crisis had passed. When he resigned in August, Finance Minister Yoshihiko Noda succeeded him as DPJ leader and prime minister. Passage of an increase in the sales tax in June, 2012, led Ichiro Ozawa and his faction to quit the DPJ. In the elections of Dec., 2012, the LDP won a resounding victory, winning a sizable majority and, with its coalition partner New Komeito, securing two thirds of the lower house seats. Shinzo Abe, who had led Japan in 2006-7, again became prime minister.

As the world's second largest national economy, Japan has struggled to define its international role. Its postwar foreign policy was aimed at the maintenance and expansion of foreign markets, and the United States became its chief ally and trade partner. In the early 1970s, however, U.S.-Japanese relations became strained after the United States pressured Japan to revalue the yen, and again when it began talks with Communist China without prior consultation with Japan. Partly in response, the Tanaka government established (1972) diplomatic relations with Communist China and announced plans for negotiation of a peace treaty. Relations also became strained with South Korea and Taiwan. Japan did not sign a peace treaty with the USSR because of a dispute over territory in the Kuril Islands formerly held by Japan but occupied by the USSR after the war. The two countries did, however, sign (1956) a peace declaration and establish fishing and trading agreements. The unresolved issue of the Kuril Islands remained a source of friction in Japan-Russia relations into the 21st cent.

Beginning in late 1973, when Arab nations initiated a cutback in oil exports, Japan faced a grave economic situation that threatened to reduce power and industrial production. In addition, a high annual inflation rate (19% in 1973), a price freeze, and the instability of the yen on the international money markets slowed Japan's economy; in the late 1970s, however, the continued growth of foreign markets brought Japan out of its slump.

In the 1980s many Japanese firms invested heavily in other countries, and Japan had a surplus with virtually every nation with which it traded. The high level of government involvement in banking and industry led many other countries to accuse Japan of protectionism. The United States in particular sought to reduce its huge trade deficit with Japan. Japan also had to deal with growing economic competition within its own region from such countries as South Korea, Taiwan, and (beginning in the 1990s) China. Japan's emphasis on exports also caused it to neglect its domestic markets.

In addition to these economic pressures, great political pressure was put on Japan to assume a larger role in world affairs. Although its constitution forbids the maintenance of armed forces, Japan has a sizable military capability for defensive warfare. The United States has increasingly pressed Japan to assume a larger share of responsibility for the defense of its region. The first Persian Gulf War caused great dissension in Japan. The government, which felt tremendous pressure to contribute to the UN effort in accordance with its economic power, also had to address the decidedly antimilitaristic bias of the Japanese people. In 2001, Japan provided refueling support in the Indian Ocean to U.S. naval forces involved in the invasion of Afghanistan. After the U.S. invasion of Iraq, Japan also contributed (2004-6) forces to reconstruction efforts. That deployment was opposed by most Japanese, despite its noncombat nature.

Meanwhile, by 2003 concern over North Korea's pursuit of nuclear weapons and missiles and over China's growing power led to the removal of some legal restrictions on the government's ability to respond militarily to an attack, and the Liberal Democrats proposed amending the constitution's limits on its defense forces. Late in 2004 relations with North Korea became especially strained when Japan suspended food aid to it after the remains it returned to Japan of a woman who had been kidnapped by Korea turned out to be not hers. The issues of North Korean missile development and the abduction of Japanese citizens increasingly worsened bilateral relations into 2006.

Relations with South Korea and China soured in the spring of 2005. Both nations were upset by school history textbooks that minimized aspects of Japan's role in World War II. In addition, South Koreans objected to the reassertion of Japanese claims to the Liancourt Rocks, which Korea occupies, while Chinese demonstrated against a plan that called for giving Japan a permanent seat on the UN Security Council and both nations contested the ownership of an exclusive economic zone in the East China Sea. The annual visits of the Prime Minister Koizumi to the Tokyo shrine honoring Japan's war dead also strained relations with South Korea and China, as did Prime Minister Abe's remarks (early 2007) denying that Japan's military had forced Asian women to serve in its brothels during World War II. Abe nonetheless managed to improve relations with China, in part by not visiting the Tokyo shrine.

North Korea's announcement of a nuclear weapons test in Oct., 2006, brought a quick and strong response from Japan, which imposed new, much tighter sanctions on North Korea. All trade with North Korea was banned, and most travel from the North was was as well. Japan also pushed for strong UN sanctions to be imposed on the North. Although Japan supported the Jan., 2007, six-party agreement that called for closure of North Korea's reactor, it maintained a harder line in its bilateral relations with the North, concerned over unresolved abduction issues and North Korean missiles (which led to the installation of ballistic missile interceptors in 2007). Relations with North Korea remained difficult in subsequent years.

When DPJ came to power in 2009, it adopted a more assertive relationship with the United States, especially with respect to U.S. bases in Japan, and sought to improve relations with South Korea and China. The new government reviewed the proposed realignment of U.S. forces on Okinawa, which was opposed by elements within the DPJ-led government and on Okinawa that preferred to see U.S. forces there reduced even further, but in May, 2010, the government announced it would honor the 2006 relocation agreement. That decision catalyzed the resignation of Prime Minister Hatoyama. Japan also ended its naval refueling mission in support of U.S. forces in the Indian Ocean.

In Sept., 2010, relations with China were strained after a Chinese trawler collided with Japanese patrol boats near the Senkaku Islands, an island group controlled by Japan but claimed by China. Japan accused the captain of intentionally crashing into the Japanese vessels, and when he was not released when his ship and crew was, China demanded his release, canceled high-level intergovernmental meetings with Japan, and was reported to have halted the export of industrially important rare earths to Japan. The captain subsequently was released, but the events undermined public support for the Japanese government, and frictions between the two nations remained. A revised agreement on the realignment of U.S. forces on Okinawa was reached in Apr., 2012; it did not change the number of U.S. forces that would remain after the realignment. Tensions over the Senkaku Islands, with both China and Taiwan, flared up again in the second half of 2012, and affected sales of Japanese products in China.