The Bank tried to print more money against Dodge’s recommendation when the recession was felt really hard in Japan. Similar to many other nations who tried to stop the inflation, the nation faced a recession due to the shock on the economic activity. Note that he focused on privatizing industries and reduced the government’s involvement in the economy. The main points were to balance the national budget by reducing debt and lower inflation, come up with a more efficient tax collection plan, dissolve the Reconstruction Finance Bank due to its uneconomical loans, decrease the scope of government intervention, and to fix the exchange rate to 360 yen to 1 US dollar to keep Japanese export prices low. By 1948, a US banker, Joseph Dodge came up with an economic reform called the 1948 Dodge Line. The United States occupation of Japan’s goal shifted from demilitarizing to helping their economy as Japan was in such desperate needs economic stability. Even the black market suffered from inflation as the government kept printing money. Unemployment and inflation became a huge problem in Japan. Soldiers who returned home were not only starving from the lack of food, but there was a lack of jobs for them as well. There were reports that people who did not go to the black market died of starvation. Food was rationed for everyone in families and there were black markets that popped up everywhere. In 1946, a year after Japan surrendered, there was a food shortage. The surviving factories and railroads were defunct from the aerial bombings, and with the lack of input as well, it was doomed for an economic shortage. The atomic bombs did not affect the Japanese production capacity as much as it had impacted its national psychologically. It costed almost as much damage as the two other atomic bombs.
One of the largest air raids was conducted in Tokyo near the end of the war where 100,000 people were trapped in the fire and killed within a few hours. had also bombed most of the Japanese major cities. This was one of the most effective ways to lead Japan to the loss of its war. Japan was determined to emerge as an economic success after its humiliating defeat reluctantly allying itself with the very nations that defeated them during the war.ĭuring the war, the United States had sunk all of the Japanese military and commercial ships in a sea lane blockage, leading Japan to have lost the means to transporting energy and materials between the island to its colony and occupied areas.
Right after the surrender of the Empire of Japan, the United States occupying led by General MacArthur led the Allies in the occupation and rehabilitation of Japan with widespread military, political, economic, and social reform, and unlike Germany, the US occupation of Japan was indirect, meaning that the Japanese government still existed as a puppet government. It wasn’t until after the second atomic bomb in Hiroshima did Hirohito decided to surrender during World War 2. During WW2, it even stretched its empire all across Southeast Asia occupying Singapore, Philippines, Dutch Indies, and Burma. However, the isolated island was running out of resources to grow its empire and started its invasion of neighboring countries such as the Korean Peninsula and China. Hence, it quickly industrialized to catch up with the West and became the first country from the East to defeat a Western power in the Russo-Japanese War. The trading with the West led to Japan wanting to prove itself to the world. Japan’s westernization, military growth, defeat, and economic growth were products of interaction with the United States since Matthew Perry showed up at its pier on the very day of July 8th, 1853 forcing isolated Japan to open up to trade with the United States. (continued) Looking at Japan’s economic growth, it is hard to imagine that it once suffered from being on the losing side of WW2 with most citizens of its nation barely had their basic needs met.
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