Japan has been plagued since the mid-1990s with deeply entrenched economic challenges. Stratfor described the basic problem with the postwar approach to economics in Japan as that it “purposefully favored turnover and maximum employment as opposed to profitability” (March 27). That may be fine when a nation is rebuilding and redeveloping after its economy has been ravaged by war. But there is a limit to the extent that such an economic strategy may be effectively employed.

The wash-up, as the Japanese market reached full capacity, was an increasing tendency for banks to bear the brunt of a rash of bad loans. Corporate failures, increased unemployment, a wobbly yen, a stagnant economy and a plummeting Nikkei stock index ensued. Japan, the world’s second-largest national economy, simply marked time for 10 years.

Then, some months ago, having gotten used to the ticker showing a daily drop in the Nikkei, gradually the stock index moved into positive territory, indicating that investors were tentatively reaching out to test the economic waters. Then the pace quickened. By the end of June, unemployment in Japan had dropped to an eight-year low. Concurrently, consumer prices rose at their fastest rate in eight years for the seventh consecutive month. It appears Japan is finally turning the corner and beginning to emerge from its economic slough.

This is all good news for Japan’s ruling Liberal party (ldp). The incumbent ldp leader, Prime Minister Junichiro Koizumi, is slated for replacement in September. If Japan’s economy remains on the up and up through the third quarter of this year, then the odds would certainly favor the dlp maintaining the country’s political leadership, for the foreseeable future, under the new dlp president as prime minister.

There is, however, another factor, this one on the foreign-policy front, that may play at least as heavily in favoring the incumbent party’s retention of the reins of government in Japan.

Prime Minister Koizumi has led Japan to increasingly adjust to breaking out of its postwar, pacifist cocoon. He has led the nation in the expansion of its military capabilities, increased the involvement of its forces beyond the shores, waters and skies of Japan, and worked to facilitate changes in the Japanese Constitution to allow for an offensive capability in keeping with the image of a First World power. Through cooperation with the United States, Koizumi’s government has increased Japan’s integration into America’s Pacific defense initiatives, taking advantage of the U.S.’s need for support of its security initiatives in the Far East. Added to this—and akin to Germany, its old Axis partner in war—Japan has also lobbied aggressively for a permanent seat on the UN Security Council.

In all these initiatives, Washington has readily encouraged, aided and abetted the Koizumi government.

It is interesting to note that, at the same time in their mutual postwar history, both Germany and Japan, having rebounded to become first-rate political and economic entities in their own right, are now intent on throwing off the shackles of enforced postwar pacifism. Each maintains that it has paid its dues for the suffering of multiple millions under the world war in which they were the chief aggressors. Each is now emerging in the early 21st century as an aspiring military power, coveting a say at the forefront of UN forums on the international scene. Each is intent on contributing to the construction of a post-9/11 world order in which it will be treated at least on equal terms with the United States. And, as we have noted repeatedly, the U.S. is the willing arbiter on their behalf in these initiatives.

So much for our memory of history.

There is one factor of which we should not lose sight in this whole equation. Both Germany and Japan are, increasingly, but very carefully at present, moving to assert a role in foreign policy quite separate and distinct from that of the U.S. Take the Japanese prime minister’s recent round of visits to the U.S. and the Middle East on his way to the g8 talks in Russia.

The White House and press hacks cooed at the sight of Koizumi visiting Graceland with President Bush and keened at his orientally inflected renditions of Elvis Presley’s ditties. But shortly after this play to the cameras, during his following visits to the Israeli and Palestinian leaders, Koizumi demonstrated to the world that Japan will go its own way in areas of policy, even at odds with U.S. interests.

Visiting Israeli Prime Minister Ehud Olmert on July 12, the Japanese prime minister declared his belief that in the present Israeli/Palestinian imbroglio, “Israel should exercise restraint and return to peace talks ….” He also touted for four-party peace talks involving Israel, the Palestinian National Authority and Jordan in concert with Japan.

Then on July 13, Koizumi openly showed his support for a Palestinian state when he met with Palestinian National Authority President Mahmoud Abbas in Ramallah. He reinforced this with a promise of $30 million in aid to keep Palestinian basic services intact. These gestures can hardly be considered friendly to either Israel or its main supporter, the U.S. Again, they are akin to gestures made by Germany and its lackey, the European Union, in the past.

But there is one other event currently being acted out on the world scene that is also playing to the Koizumi government’s advantage, particularly considering Koizumi’s efforts to remove pacifist clauses from the Japanese Constitution. That is the belligerence presently being demonstrated by North Korea.

For some time, the editor in chief of the Philadelphia Trumpet has maintained that Iran’s foreign-policy push will serve to motivate Germany, in response, into taking on an overtly militaristic role. Similarly, North Korea’s aggressive foreign policy is presently having an identical effect on Japan.

Stratfor noted recently, “Pyongyang’s Nodong missiles have the capability of reaching most of Japan, including U.S. bases in Okinawa. North Korea has more than 100 of these mobile missiles, making them an extremely valuable commodity. And its short-range Hwasong series can strike anywhere in South Korea and potentially parts of Japan” (July 11).

North Korea’s recent multiple testing of such weaponry prompted Japan to publicly declare that it was considering mounting a pre-emptive strike against that country. This met with immediate reaction from South Korea. In another article, Stratfor stated, “South Korea on July 11 criticized Japan for suggesting a pre-emptive strike against North Korea. A spokesman for President Roh Moo Hyun said Japan’s actions reveal the country’s expansionist nature. Japan has been assessing whether a pre-emptive strike on North Korea would violate its constitution” (July 11).

It seems that the South Korean leadership has a far better grasp than that of the U.S. on the high risk of the history of the 1940s repeating itself in the event of Japan morphing into a formidable, imperialistic military power.

The scene is right now being set, not only for a change in Japan’s pacifist constitution, but, in reaction to perceived security threats on its very doorstep in the Sea of Japan, for a rise in nationalism and militarism within that nation. This will lead to a firing up of the furnaces, once again, for a retooling of Japanese industry in preparation for the mass production of a wide range of weaponry. The Japanese and U.S. governments will be at pains to publicize that this Japanese industrial initiative is not only to shore up Japan’s own defenses, but also to contribute significantly to America’s Pacific defense capability. It is this militarily inspired industrial revival in Japan that will provide the stimulus to rocket the Japanese economy into a powerhouse economy once again.

The fact is, any astute observer can most readily see that all of these events are setting the scene for a rise in nationalism and militarism within Japan. This is a phenomenon that will have catastrophic effect on future events stretching from the Far East, through Europe and climaxing in the Middle East, in the not too distant future. Once again, as Herbert W. Armstrong consistently predicted, the U.S. is willingly aiding and abetting the rise of its old enemies to prominence in the roles of belligerents in preparation for the third, great—and final—round of world war that started way back in 1914. Japan is destined to play a powerful role in those cataclysmic events.

But, unlike that First World War, billed as the “war to end all wars,” this third and final round of world war will, in fact, fulfill that goal!