Japan in the 1980s: when Tokyo’s Imperial Palace was worth more than California and golf club membership could cost US$3 million – 5 crazy facts about the bubble economy
From fraud fuelled by a stock market-predicting ceramic frog to the ‘economic Pearl Harbour’ which saw Japanese companies buy up New York’s Rockefeller Center and Hollywood’s Columbia Pictures, East Asia’s economic golden age was one wild time for those at the top
The mid- and late-1980s were the years of Japan’s “bubble economy”, a time when the country was at its economic peak. It was awash with money, fuelling evermore conspicuous consumption, and Western scholars, spurred on by books like Ezra Vogel’s Japan as Number One (1979), sought to predict when Japan would surpass the United States as having the largest economy in the world.
Of course, that story never came to pass. At the end of 1989, the Nikkei 225 stock market reached 39,000, a historic high. Three years later, more than half of that had been wiped out with the market at just 17,000 by the end of 1992.
However, while the good times rolled, Japan enjoyed unprecedented wealth. Here are five crazy facts from that time.
The Imperial Palace in Tokyo was worth more than all of California
Between 1956 and 1986, the price of land increased by as much as 5,000 per cent in Japan. At the peak of the bubble economy, Tokyo real estate could sell for as much as US$139,000 per square foot, which was nearly 350 times as much as equivalent space in Manhattan. By that reckoning, the Imperial Palace in Tokyo was worth as much as the entire US state of California.
The Japanese property market was worth four times more than the US property market
It wasn’t just Tokyo that was super expensive, though. Despite Japan occupying the equivalent of only four per cent of the land mass of the entire US – Japan is about the same size as California – the value of the Japanese property market was four-times greater than that of the USA.
Land-price inflation was so distorted that land constituted 65 per cent of Japan’s national wealth, compared to just 2.5 per cent for the UK at the time.