japan travel guide | history of japan part IV | part of luketravels.com

In January 1995 a massive earthquake struck Kobe: government reactions were slow and confused, shattering Japan's much vaunted earthquake preparedness. To top it all off, just a couple of months later a millennial cult with doomsday ambitions engineered a poison gas attack on the Tokyo subway system.

Observers agree that Japan is changing: international market forces and a savvy electorate are impinging on the once cozy system of political kickbacks and backroom deals that characterized business and government. A stalled economy, huge losses by Japanese banks, sinking share prices and regional instability have all taken the shine off Japan Inc - in early 1998 Japan's banks were in such a bad state that they had to be bailed out by the US government. Voter backlash against the state of Japan's economy severely shook the ruling LDP in mid-1998, and Prime Minister Hashimoto stood down as a result. He was replaced by Keizo Obuchi, an LDP stalwart - observers predict no great changes in the way the country is run.

As an island nation shut off from the rest of the world for a long time, Japan is very homogeneous, with around 98% of the population ethnically Japanese. The largest minority are Koreans, around 1 million strong, many in their 3rd or 4th generations. There are also sizable populations of Chinese, Filipinos and Brazilians. Indigenous ethnic minorities include the Ainu, driven north over the centuries and now found only on Hokkaido, numbering around 50,000 (although the number varies greatly depending on the exact definition used), and the Ryukyuan people of Okinawa.