Japan

Many ways, Japan is still reeling from the devastating earthquake and tsunami of March 11, 2011, and the nuclear crisis and huge leaks of radiation it set off.

The disaster led to soul searching in a nation already worn down by two lost decades of economic growth, a rapidly aging and shrinking population, and the rapid rise of its longtime rival, China.

Years of political paralysis continued after the disaster, with Naoto Kan resigning as prime minister in August 2011. He was replaced by Yoshihiko Noda, who became the country’s fifth new leader in six years. Just over a year later, Mr. Noda dissolved the lower house of Parliament, setting the scene for elections in December 2012.

With his approval ratings sliding, Mr. Noda is unlikely to score a victory in December. The opposition Liberal Democratic Party, headed by the nationalist former prime minister Shinzo Abe, was leading in opinion polls at the time the election was called.

The pressure on Mr. Noda to call elections intensified after he brokered a deal with opposition parties in August for an early vote if they cooperated with a major tax-increase initiative. The move in November to dissolve Parliament was prompted by more dealings with the opposition, this time for help with a much-needed debt financing bill and changes to Japan’s electoral system. Mr. Abe said his party was ready to cooperate in return for elections.

The elections could return the Liberal Democrats to power three years after the Democratic Party defeated them. Before 2009, the Liberal Democrats had held almost uninterrupted power for over a half-century.

Neither side is expected to return a majority to Parliament, so the next government most likely will be built on a shaky coalition or cooperation with splinter parties.

It was unclear which other players might make inroads in the December elections. Toru Hashimoto, the outspoken and populist mayor of Osaka and head of a new party, the Japan Restoration Association, has pledged to field a candidate in every voting district.Another party was formed in mid-November by Shintaro Ishihara, a former governor of Tokyo, who told reporters that he vowed to create “a stronger and tougher Japan.”

The campaign is likely to focus on the planned increase in the consumption tax, negotiations for a contentious trans-Pacific free-trade agreement and the future of Japan’s nuclear policy. But policy differences between major parties are murky at best, and often there are splits within parties, which could mean a confusing choice for Japanese voters.

The Liberal Democrats could take a bolder stance in monetary easing to pull Japan out of deflation, however. Mr. Abe has pushed for legislative changes that would give the government greater control over the central bank, including the power to fire the bank’s governor if it does not bend to the government’s will.

The nationalist leanings of Mr. Abe and of the splinter parties led by Mr. Hashimoto and Mr. Ishihara have raised concerns that Japan’s foreign policy could shift more to the right, further damaging the country’s relations with its Asian neighbors. Tokyo has already demonstrated a stronger willingness to face off with China over a set of disputed islands in the East China Sea, despite the damage to Japan’s exports to a major trading partner.

Cautiously Raising Its Profile

At the same time, after years of watching its international influence eroded by a slow-motion economic decline, pacifist Japan has been trying to raise its profile in a new way, offering military aid for the first time in decades and displaying its own armed forces in an effort to build regional alliances and shore up other countries’ defenses to counter a rising China.

Japan crossed a little-noted threshold in 2012 by providing its first military aid abroad since the end of World War II, approving a $2 million package for its military engineers to train troops in Cambodia and East Timor in disaster-relief and skills like road building. Japanese warships have not only conducted joint exercises with a growing number of military forces in the Pacific and Asia, they have also begun making regular port visits to countries long fearful of a resurgence of Japan’s military.

And after stepping up civilian aid programs to train and equip the coast guards of other nations, Japanese defense officials and analysts say, Japan could soon reach another milestone: beginning sales in the region of military hardware like seaplanes, and perhaps eventually the stealthy diesel-powered submarines considered well suited to the shallow waters where China is making increasingly assertive territorial claims.

These steps, while modest, represent a significant shift for Japan, which had resisted repeated calls from the United States to become a true regional power for fear that would move it too far from its postwar pacifism. The country’s quiet resolve to edge past that reluctance and become more of a player comes as the United States and China are staking their own claims to power in Asia, and as jitters over China’s ambitions appear to be softening bitterness toward Japan among some Southeast Asian countries trampled last century in its quest for colonial domination.

Rising Tension With China Over Territorial Dispute

Prime Minister Noda provoked Beijing with a move in July to defend Japan’s claims to islands in the East China Sea that China and Taiwan also claim. China apparently responded by sending three fishery patrol ships into waters around the uninhabited islands, between Okinawa and Taiwan, which are known as the Senkaku in Japan and the Diaoyu in China.

Mr. Noda announced plans for the central government to buy three of the uninhabited islands, which are owned by a Japanese citizen, after Tokyo’s rightist governor announced that he wanted to buy them. China says Japan seized the islands after winning a late-19th-century war between the two nations. Virtually worthless in their own right, the islands are near rich fishing grounds and possible undersea oil and natural gas deposits.

On Aug. 17, 2012, Japan announced it deported 14 Chinese citizenswho were arrested on or near the Senkaku Islands in the East China Sea, a group that is claimed by Japan, China and Taiwan. 

Japanese Prime Minister Noda and members of his cabinet decided to send the Chinese back rather than pursue criminal charges, quickly defusing a potentially damaging standoff with China.

The 14 Chinese, who included activists and journalists based in Hong Kong, were arrested a few days earlier after seven of them arrived by boat on Uotsuri, part of an uninhabited island chain called the Senkakus by Japan and Diaoyu by China. Five of the Chinese were arrested on Uotsuri, and the other nine on the boat, including two who had stepped ashore.

The group staged the landing to protest Japanese plans for the central government in Tokyo to buy the islands, most of which are currently owned by a private Japanese citizen. When questioned by Japanese police, the 14 denied breaking any law, saying they did not need Japanese permission to land on what they called Chinese territory.

By deporting the 14 so soon after their arrest, Japan appeared to be trying to end a potential diplomatic crisis. Chinese officials also appeared interested in keeping the episode from growing into a full-blown spat, demanding the immediate release of the 14 but seeming to avoid an escalation of harsh words.

In the wake of the deportations, anti-Japanese protests spread across China in August. Some protests turned violent, with demonstrators attacking sushi restaurants or other businesses perceived to have a Japanese connection.

In September, anti-Japanese demonstrators took to the streets againin cities across China, with the government offering mixed signals on whether it would continue to tolerate the outbursts. There were protests in Beijing, Shanghai, Guangzhou, Qingdao and in more than 50 cities.

On Oct. 11, a senior Chinese diplomat made a secret visit to Tokyo to hold talks aimed at defusing tensions between the two countries, according to a Japanese government spokesman. The spokesman, Osamu Fujimura, said Luo Zhaohui, who leads the Chinese Foreign Ministry’s Asian Affairs Department, met with Shinsuke Sugiyama, the director general of the Asian and Oceanic Affairs Bureau at Japan’s Foreign Ministry.

According to a statement from the Japanese ministry, the diplomats “exchanged opinions” on the dispute and held preparatory talks for a higher-level meeting between the two nations to take place at an unspecified date.

In December, a Chinese military surveillance plane entered what Japan considers its airspace near the disputed islands, the Japanese Defense Ministry said. Japan scrambled fighter jets in response, but the Chinese plane left before they arrived, according to Japanese authorities.

The ministry said the plane’s incursion was the first known violation of Japanese airspace by a Chinese plane since they began keeping records some 50 years ago. China considers the airspace its own, because it is laying claim to the islands that Japan has controlled for decades.

Tokyo lodged a formal protest with Beijing, which swiftly retorted that it was the Japanese who had encroached.

Dispute Reflects Japanese Fear of China’s Rise

As a result of the Senkaku Island dispute, a small number of Japanese nationalists have been pushing their country to boldlycounter China and South Korea’s economic rise and China’s quickly evolving territorial ambitions.

The nationalists have gained traction for their cause by taking advantage of the government’s political weakness, forcing the governing party to take a tougher stand on the island dispute.

The activists are also tapping into a widespread anxiety over China, which intensified two years ago during the last major flare-up over the Senkakus. China retaliated then for Japan’s arrest of a fishing captain by starving Japan of the rare earths needed for its already struggling electronics industry. That anxiety became more pronounced in recent months as China expanded its claims in the nearby South China Sea, challenging Vietnam, the Philippines and others over more than 40 islands in a vast area, and backing its statements with aggressive moves that included sending larger patrol boats to disputed waters.

There is still little appetite in pacifist Japan for a full-blown confrontation with China. But analysts say consensus is growing on the need to stand up to China as power in the region appears to slip further from economically fading Japan and the United States.

A dispute over territory in the South China Sea has received more international attention than the Senkakus in the East China Sea. But, experts say, the increasingly shrill war of words between Japan and its neighbors, including China and South Korea, over the East China Sea islands is potentially more explosive. Unlike the South China Sea islands, where the frictions center on competition for natural resources, the East Asian island disputes are more about history, rooted in lingering — and easily ignited — anger over Japan’s brutal dominance decades ago.

The ramifications for the United States are also potentially more troubling, analysts said. The United States has been urging Japan and South Korea to pick up more of the burden of defending against China and North Korea, but the countries’ latest standoff over islets that sit between them, known as Takeshima in Japan and Dokdo in Korea, contributed to South Korea’s decision to back out of an agreement to share military intelligence with Japan.

An even bigger, though remote, risk for the United States, some analysts said, is that it could be dragged into an armed conflict between China and Japan, which it is obligated by treaty to defend.

Background

The Liberal Democrats have governed Japan for most of its postwar history, but in recent times the party appeared unable to adapt to a changing era. Disgruntled voters increasingly blamed them for failing to outgrow traditional pork-barrel politics and find an end to the nation’s seemingly intractable political paralysis and its economic decline in the recession.

In August 2009, the Liberal Democrats were roundly defeated by the rival Democratic Party, and the Democrats’ leader, Yukio Hatoyama became prime minister in September.

With the ascendancy of the archrival Democrats, major changes appeared to be on the horizon. But the Democrats’ tenure has been a disappointment so far, at least in the opinion of the Japanese electorate: the Democrats suffered a stinging setback in midterm elections in July 2010 that showed growing voter disappointment with the party’s apparent inability to deliver on promises to revamp the country’s sclerotic postwar order.

Mr. Hatoyama, who came to office with bold promises to revamp the country, announced only eight months later that he would step down after faltering over campaign pledges to remove an American base from Okinawa. In June 2010, the party elected Naoto Kan, a plain-spoken finance minister with activist roots, as prime minister.

Mr. Kan’s time in office followed an all-too familiar pattern: after a strong start with approval ratings above 60 percent, support quickly began to slip and fall as he faced rising criticism for failing to show leadership. In August 2011 he resigned, making him the sixth Japanese prime minister to step down in the five years.

He was succeeded by Yoshihiko Noda, who had been running a distant third before the internal vote by the Democratic Party. During the campaign, Mr. Noda ran largely on economic issues, presenting himself as a pro-business, fiscal conservative who could rein in Japan’s ballooning national debt while taming the soaring yen and battling crippling deflation.

Although Mr. Noda’s August 2011 victory was a surprise, political analysts said much of it was about seeking a fresh start for the Democratic Party.

The Economy

Even before the earthquake and tsunami, the Japanese economy was struggling. It was a big comedown from the nearly five decades following World War II.

During that time, Japan’s economy grew steadily through policies that closely aligned government and large manufacturers. That formula reached its peak in the late 1980s, but a real estate bust brought growth to an end, and was followed by a long intractable slump that lasted through the 1990s and into the 21st century.

Deflation has left a deep imprint on the Japanese, breeding generational tensions and a culture of pessimism, fatalism and reduced expectations. While Japan remains in many ways a prosperous society, it faces an increasingly grim situation, particularly outside the relative economic vibrancy of Tokyo.

In the 1980s, a mighty — and threatening — “Japan Inc.” seemed ready to obliterate whole American industries, from automakers to supercomputers. With the Japanese stock market quadrupling and the yen rising to unimagined heights, Japan’s companies dominated global business, gobbling up trophy properties like Hollywood movie studios (Universal Studios and Columbia Pictures), famous golf courses (Pebble Beach) and iconic real estate (Rockefeller Center).

In 1991, economists were predicting that Japan would overtake the United States as the world’s largest economy by 2010. In fact, Japan’s economy remains the same size it was then while the United States economy doubled in size.

The decline has been painful for Japan, with companies and individuals having lost the equivalent of trillions of dollars in the stock market, which is now just a quarter of its value in 1989, and in real estate, where the average price of a home is the same as it was in 1983

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Recovering From the Dual  Disasters

The road to recovery from the tsunami has been a long one. The northern coastal towns that were flattened by waves have cleaned up millions of tons of debris and are beginning to rebuild.

But it is the nuclear accident at the Fukushima Daiichi Nuclear Power Station that is likely to have a more lasting impact, even though it has yet to claim a single life. Japan is just beginning what promises to be a decades-long radiation cleanup of the evacuated areas around the plant, where nearly 90,000 residents lost their homes. The nation is also groping to find effective ways to monitor health and protect its food supply from contamination by the accident, which government scientists now say released about a fifth as much radioactive cesium as the 1986 Chernobyl disaster.

The crisis began when an earthquake struck off the east coast of Japan, churning up a devastating tsunami that swept over cities and farmland in the northern part of the country and prompting warnings as far away as the West Coast of the United States and South America. Recorded at 9.0 on the Richter scale, it was the most powerful quake ever to hit Japan. The tsunami killed as many as 20,000 people.

As the nation struggled with a rescue effort, it also faced the world’s worst nuclear crisis since Chernobyl. Explosions and leaks of radioactive gas took place in three reactors at the Fukushima Daiichi nuclear plant that suffered partial meltdowns, while spent fuel rods at another reactor overheated and caught fire, releasing radioactive material directly into the atmosphere.

Japanese officials turned to increasingly desperate measures, as traces of radiation were found in Tokyo’s water and in water pouring from the reactors into the ocean.

The ensuing crisis led to a change in leadership, as Japan’s governing Democratic Party elected Mr. Noda as the new prime minister in August 2011. Mr. Noda, a former finance minister, became the sixth person to hold the post in five years. He replaced Naoto Kan, who had failed to galvanize Japan after the disaster and was forced to resign.

Throughout the crisis, both the Fukushima Daiichi plant’s operator, Tokyo Electric Power, or Tepco, and the government were accused of playing down the dangers posed by the meltdown. Subsequent disclosures that the event was indeed far more severe than they let on have badly damaged their credibility, to the point that almost any statement from the authorities is now regarded as suspect by a dubious Japanese public.

For more on the Fukushima disaster and nuclear energy in general,

Turnabout on Plans to Abandon Nuclear Power by 2030s

In September 2012, in its first comprehensive energy review since the Fukushima disaster, Japan said that it would seek to phase out nuclear power by the end of the 2030s — but only after a longer-than-expected transition that would give power companies decades to recoup their investments and brace for a nonnuclear future.

The energy strategy, which would call for a 40-year life span for reactors and limit the construction of nuclear plants, reflected a historic shift away from nuclear power since the accident.

But it was abandoned less than a week later after vehement protests from business groups and communities that host the country’s nuclear plants.

Mr. Noda’s cabinet instead said only that the government would take the 2040 goal “into consideration,” and instead endorsed a vague promise to “engage in debate with local governments and international society and to gain public understanding” in deciding Japan’s economic future.

Before the accident, Japan depended on its reactors for about 30 percent of its electricity needs. It had planned to raise that share to more than 50 percent by 2030.

Fukushima Plant Still Poses Danger

In March 2012, an internal investigation showed that the damage to the core of at least one of the meltdown-stricken reactors at Fukushima could be far worse than previously thought, raising fresh concerns over the plant’s stability and gravely complicating the post-disaster cleanup.

The results of the inquiry, released by the operator of the Fukushima Daiichi Nuclear Power Plant, also cast doubt over the Japanese government’s declaration that the ravaged site is now under control.

Officials at Tepco had previously said that damaged fuel rods were safely submerged in water. But an examination at one of the reactors showed the water level at its core to be far lower than levels previously estimated, raising fears that the broken-down remnants of the uranium fuel rods there may not be completely submerged and in danger of heating up again.

The low water levels also raised concerns that radioactive water may be leaking out of the reactor at a higher rate than previously thought, possibly into a part of the reactor known as the suppression chamber, and into a network of pipes and chambers under the plant — or into the ocean. At the No. 2 reactor, workers still pump about 9 tons of water an hour into the core to keep it cool.

An Agreement on Okinawa

One chronic irritant in relations between the United States and Japan has been the presence of American forces on the island of Okinawa, where many residents are fiercely opposed to their presence.

At the end of April 2012, both countries reached an agreement that calls for the American military to reduce the number of Marines on Okinawa by 9,000 and begin returning land to the government there.

The deal was presented by senior American officials as a victory for both sides: it offers the prospect of removing a chronic source of Japanese resentment and, in keeping with the Obama administration’s new focus on Asia, allows the Defense Department to free up ground forces for rotating deployments across the Pacific region, officials said.

No time frame was announced for the redeployment, which would leave about 10,000 Marines on Okinawa. About 5,000 of those leaving will go to Guam, an American territory in the western Pacific, and a smaller number to Hawaii.

The agreement on removing the Marines was made possible by separating those negotiations from another thorny issue. The Japanese have demanded that the United States move the Marine Corps Air Station Futenma from an urban part of Okinawa to a less-populated spot in the north, at Camp Schwab. Okinawa would still remain host to Kadena Air Base, the largest American airfield in the region.

Signing of Military Pact With South Korea Postponed

In June 2012, Japan and South Korea were ready to sign their first military cooperation pact since World War II. The pact would have provided a legal framework for the two countries to share and protect classified military data so they could deal more effectively with the threats posed by North Korea’s nuclear and missile programs and China’s growing military influence.

But the signing was postponed after the pact set off an uproar in South Korea, where resentment of Japan’s early 20th-century colonization remains raw and the public regards any sign of Japan’s growing military role with deep suspicion. The political opposition accused South Korean president Lee Myung-bak of succumbing to American pressure and called him “pro-Japanese.”

The fate of the agreement remains uncertain, even though it had been signed by Japanese cabinet, with Japan’s foreign minister calling the agreement a “Historic event.”

Cabinet Reshuffled in Push for Tax Bill

Also in June 2012, facing dissension within his own governing party, Mr. Noda reshuffled his cabinet in what appeared to be a desperate gambit to win the backing of the largest opposition party for his unpopular bill to double the national sales tax.

Mr. Noda has proclaimed that he is staking his “political life” on Parliament’s passing tax increase legislation, maintaining that it is needed to cover the swelling costs of pension and social security for the nation’s rapidly aging population. Nevertheless, he has faced firm resistance from his Democratic Party’s largest faction. Mr. Noda apparently decided to seek the necessary votes by reaching out to the opposition Liberal Democrats, who have proposed a similar tax increase.

The cabinet reshuffling, which replaced 5 of 18 ministers but left the most influential members of the government in place, was seen as a concession to the opposition. The tactic was convoluted even by the standards of Japan’s obtuse political world. It was also unclear whether it would work.

Political analysts said the move could also backfire on Mr. Noda by adding to the public perception that the Democrats are too divided and indecisive to lead Japan’s recovery from the earthquake and nuclear disaster.

Most Japanese Oppose Restarting the Ohi Plant

Mr. Noda’s decision in June 2012 to restart the Ohi plant ended the temporary freeze of Japan’s nuclear power industry, when all 50 of the country’s functional reactors were idled after the triple meltdown at the Fukushima Daiichi plant. Despite Mr. Noda’s vows to strengthen the Ohi plant against the same sort of huge earthquake and tsunami that knocked out the Fukushima plant in 2011, the Japanese people have remained deeply divided on the safety of nuclear power.

Opinion polls showed that more Japanese opposed restarting the Ohi plant than supported it. Mr. Noda urged the nation to return to nuclear power to avoid electricity shortages that could cause blackouts and cripple industry at a time of rising competition with China and the rest of Asia. Instead, he has supported a slow phasing out of nuclear plants over several decades, as energy alternatives are found.

Mr. Noda’s decision was seen as a victory for the still-powerful nuclear industry and its backers in the business world, whose political support has been crucial to Mr. Noda. Many Japanese already believe that Mr. Noda has rushed to proclaim the Ohi plant safe despite the fact that a new earthquake-resistant control center and other safety measures at the plant are years from completion.

A Preventable Disaster, Says Inquiry

Since the crisis began, Japan has grappled with the question: Was the accident simply the result of an unforeseeable natural disaster or something that could have been prevented?

Japan’s nuclear regulators and Tepco have said that the earthquake and tsunami were far larger than anything that scientists had predicted. That conclusion has allowed the company to argue that it was not responsible for the triple meltdown.

But some insiders from Japan’s tightly knit nuclear industry have stepped forward to say that Tepco and regulators had for years ignored warnings of the possibility of a larger-than-expected tsunami in northeastern Japan, and thus failed to take adequate countermeasures, such as raising wave walls or placing backup generators on higher ground.

They attributed this to a culture of collusion in which powerful regulators and compliant academic experts looked the other way while the industry put a higher priority on promoting nuclear energy than protecting public safety.

In early July 2012, a report released by an independent parliamentary commission concluded that the crisis was a preventable disaster rooted in government-industry collusion and the worst conformist conventions of Japanese culture. The report also warned that the plant may have been damaged by the earthquake in March 2011, even before the arrival of the tsunami.

In August, Tepco released recordings of teleconferences between the Tokyo headquarters of the Fukushima plant and the plant’s managers in the early days of the accident that offered a firsthand account of the last-ditch — and ultimately unsuccessful — attempts to avert multiple meltdowns in the disaster. Tepco released the recordings as part of an effort to counter suspicion among the public and local news media that it has still not offered a full account of the events that unfolded at the site in March 2011.

In October, Tepco admitted for the first time that it had failed to take stronger measures to prevent disasters for fear of inviting lawsuits or protests against its nuclear plants. The admission, an apparent bid to inspire confidence, also seemed to confirm one of the main arguments of the company’s critics: that it refused to recognize and fix problems because it did not want to jeopardize the so-called safety myth that Japan’s nuclear technology was infallible.

Diplomatic Flare-Ups

In mid-July, Japan temporarily recalled its ambassador to China,Uichiro Niwa, in response to renewed friction over a disputed island group in the East China Sea, while it faced fresh discord with its allies South Korea and the United States over women forced to work in Japanese brothels during World War II.

Though minor, the diplomatic flare-ups underscored howdisagreements over history and territory continue to isolate Japanfrom the rest of Asia. They come after several years of relative calm in which Tokyo seemed to mend fences with neighbors still traumatized by Imperial Japan’s brutal, early-20th-century march across Asia.

The dispute over Asian women forced to have sex with Japanese soldiers in wartime brothels has even put Tokyo at odds with its postwar protector, the United States. Unconfirmed reports that Secretary of State Hillary Rodham Clinton has banned the use of the Japanese euphemism “comfort women” in favor of the more direct “sex slaves” prompted a curt retort in the Japanese Parliament by the foreign minister, Koichiro Gemba, who called the latter term “a mistaken expression.”

Under Mr. Noda, Japan has tried to challenge some of the assertions about the women, who many historians say were forced into sexual slavery by the Japanese military but who many Japanese say were willfully working as prostitutes. Those assertions have drawn angry reactions in South Korea, where they are seen as signs that Tokyo remains unrepentant for its harsh colonization of the Korean Peninsula.

Strong Yen Reinforced by Generation Gap

As Japan has ceded dominance in industry after industry that once lifted this nation to economic greatness, there has been plenty of blame to go around. A nuclear disaster that raised energy costs. A lack of entrepreneurship. China’s relatively cheap work force.

Increasingly, however, business leaders point to a punishing threat that is at least partly within the government’s power to control: a high yen that has made Japanese exports, from televisions to memory chips, prohibitively expensive abroad. In an echo of a debate that raged in the United States in the 1980s, the government faces growing criticism for doing almost nothing to rein in the yen, despite alarm that the record-high currency is dealing crippling blows to the country’s once all-important export machine.

One big reason, analysts and some politicians say, is simple, if generally left unsaid: A high yen benefits Japan’s rapidly expanding population of elderly residents, even if it hurts other parts of the country.

By speeding the flood of cheaper imported products into Japan, the strong yen is contributing to a broader drop in the prices of goods and services that have helped retirees stretch their pensions and savings. The resulting inaction on the yen, according to a growing number of economists and politicians, reflects a new political reality, with already indecisive leaders loath to upset retirees from the postwar baby boom who make up nearly a third of the population and tend to vote in high numbers.

The problem, many economists warn, is that victory comes at a high price, hastening the hollowing out of Japan’s industrial base as companies continue to move abroad, exacerbating the nation’s two-decade-long relative economic decline. It may also, ultimately, be self-defeating by undermining the very industries that created the huge trade surpluses that sustained Japan’s still comfortable living standards.

In July 2012, the government released the final draft of a new economic strategy that it contends will help break what it described as a vicious cycle of a strong yen and deflation. But even though the long-awaited plan identifies the heart of the problem as Japan’s aging population and declining export prowess, analysts said the government’s approach is vague, failing to take on any of the entrenched interests, including the elderly, that have long stood in the way of fundamental change.

Growth Slows to a Crawl

Japanese economic growth slowed to an annual rate of 1.4 percent in the second quarter of 2012, the government said in August, as cooling global demand weighed on the nation’s exports, while domestic demand, which had helped Japan outperform other Group of 7 industrialized countries, appeared to lose steam.

The slowdown highlighted economic worries days after Prime Minister Yoshihiko Noda won his bid to double the Japanese sales tax to tackle swelling public debt, with the upper house of Parliament passing the increase on August 10. The last sales tax increase, in 1997, snuffed out any hope of a strong recovery from the Japanese banking crisis of the 1990s, and opponents of Mr. Noda have warned that the latest increase in the tax could lead to a similar slowdown.

Japan Angered by South Korean Visit to Disputed Islets

President Lee Myung-bak of South Korea flew to a set of islets locked in a territorial dispute with Japan in August 2012, dismissing protests from Tokyo. Japan called Mr. Lee’s visit “unacceptable” and recalled its ambassador from Seoul in protest.

Although South Korean cabinet ministers and national legislators had previously visited the barely inhabitable volcanic outcroppings in the sea between Korea and Japan, Mr. Lee was the first South Korean president to travel there to highlight his country’s territorial control. A squadron of armed South Korean police officers have manned the islets, called Dokdo in Korea and Takeshima in Japan, since the 1950s. An elderly fishing couple also lives there with government support.

Mr. Lee’s trip came after Japan angered South Koreans by reconfirming its territorial claim to the islets in a defense white paper published in late July. The islets are surrounded by rich fishing grounds and natural gas deposits.

Beginning Talks With North Korea

Japan and North Korea ended their first direct talks in four years on Aug. 31, 2012, with an agreement to meet again, apparently in a sign of the North’s desire to reduce tensions with Japan, and by extension, the United States.

Japanese analysts have said that the talks in Beijing, which began on Aug. 29, may be a signal that the North’s new ruler, Kim Jong-un, wants to improve his nation’s destitute economy by reaching out to Japan, America’s most important Asian ally. They said Mr. Kim might also be trying to reduce his country’s economic dependence on China, which supplies the North with fuel and food.

Disagreements over issues like the fate of Japanese citizens abducted by North Korean agents decades ago had led Japan to cut off all trade and ties with the North. The top Japanese government spokesman, Chief Cabinet Secretary Osamu Fujimura, said the abduction issue would be on the agenda when the two nations meet again.

While the North’s overtures might represent a new openness, North Korea has reached out to countries it considers adversaries before, only to break agreements and lash out in anger.

The talks began as a meeting to discuss Japan’s retrieval of the remains of some of the 21,000 Japanese who died at the end ofWorld War II in what is now North Korea, which at the time was part of a Japanese colony. But the meeting broadened into a discussion of an agenda for future talks between the two nations.

Anger in Okinawa Over Violent Episodes

On Nov. 2, 2012, Japanese leaders reacted angrily after the police on Okinawa said an American Air Force serviceman was suspected of breaking into an apartment while drunk and punching a 13-year-old boy, just weeks after two American sailors were accused of raping a woman on the same island.

The airman was apparently in violation of a curfew imposed in October by the American military on all of its roughly 50,000 military personnel in Japan following the rape accusation. The police did not release the name of the 24-year-old airman, who was in the hospital after apparently falling from a third-story window.

The back-to-back episodes stirred outrage on Okinawa, the southern island that hosts three-quarters of the American bases in Japan. The episodes also threaten to complicate ties between the United States and its closest Asian ally at a time when both nations are trying to work together to face an increasingly assertive China.

The episodes have added to the increasingly vocal opposition on Okinawa to carrying what many residents see as a disproportionate burden in hosting so many of the American troops in Japan. Japanese officials fear Okinawan anger could grow strong enough to disrupt their nation’s overall security alliance with the United States, on which Japan has relied for its defense since the end ofWorld War II.

Opposition Party Picks Nationalist Ex-Premier as Leader

Shinzo Abe, a nationalist former prime minister, won the race to lead Japan’s main opposition party in September 2012, giving him a chance of regaining the nation’s top job — a prospect that could exacerbate Tokyo’s tense relations with China and its other Asian neighbors.

Mr. Abe’s Liberal Democratic Party is poised to make gains in nationwide elections expected soon, due in part to the unpopularity of Prime Minister Noda. Poll ratings for Mr. Noda and his Democratic Party have languished, thanks to the party’s handling of the disasters that struck Japan in 2011 and gridlock in Parliament that has crippled policy making.

It is a striking return to the spotlight for Mr. Abe, who called for a stronger and unapologetic Japan when he took office in 2006, but stepped down just a year later following a series of scandals and gaffes, citing an unspecified health problem.

During his brief term, he managed to anger China and South Korea with moves to change Japan’s pacifist Constitution, denials that Asian women were forced into sexual slavery for the Japanese military during World War II, and efforts to alter school textbooks to present what critics called a whitewashed version of Japan’s wartime history.

At the time, Mr. Abe’s nationalist agenda seemed off the mark for a public that was more interested in jobs and economic recovery. And in some ways, he kept tensions with China from getting too far out of hand, picking Beijing for his first official trip overseas and refraining from visiting a contentious Tokyo war shrine.

But with emotions running high between Japan and China over a set of disputed islands, a return to office by Mr. Abe could help fuel more tension. Mr. Abe has veered further to the right since his stint as prime minister, suggesting that he intends to visit the Yasukuni war shrine if he becomes prime minister again and may even seek to nullify some of Japan’s war apologies.

Speaking to reporters on Sept. 26, Mr. Abe promised to take a strong stand in the dispute with Beijing over the islands if he became prime minister, even as he referred to Japan’s strong economic ties with China. He said he would also seek to strengthen Japan’s defense cooperation with the United States by taking a more active military role.

Political analysts had all but written Mr. Abe off after his abrupt resignation, which triggered much ridicule and greatly weakened the long-ruling Liberal Democrats. The party eventually lost to the Democrats in 2009, a historic defeat that ended a half-century of almost uninterrupted single-party rule.

But the Democratic Party has lost much of its support, having fallen short on many of their promises to change Japan’s postwar order by wrestling power away from the country’s powerful bureaucrats. The public has become increasingly disillusioned with what is seen as a directionless reconstruction effort following the 2011 tsunami and nuclear crisis, as well as the party’s failure to kick-start Japan’s moribund economy.

Those woes have put Mr. Noda under increasing pressure to call elections soon, though he could still push them back as far as summer 2013 while he tries to restore his party’s popularity