Episode 3: The Sparkling Era! High Economic Growth and the Soaring Nikkei Average 🚀 (Mid-1950s - Early 1970s)
Last time, we talked about the tough post-war era when the Nikkei Stock Average was born and how the Korean War special procurement boom revitalized the Japanese economy. (For details, check out "The Origin Story (Post-War Reconstruction Era)"!)
Now, let's time-slip into the era of "High Economic Growth," when Japan grew rapidly like a rocket, propelled by that procurement boom! What happened to the Nikkei Stock Average during this time?
Japan's Rapid Growth! What was "High Economic Growth"? (Approx. 1955 - 1973)
"High Economic Growth" refers to the period when Japan's economy expanded at an incredible pace. It lasted for about 20 years, from around 1955 to 1973.
A 1956 government economic white paper famously stated, "The 'post-war' period is over," signaling that Japan had recovered from the ravages of war and entered a new stage of development.
Why such rapid growth? 🤔
- Foundation from Korean War Boom: Factories and technology had already leveled up due to the previous boom.
- Adoption of New Technologies: Japan actively imported new technologies and machinery from countries like the U.S. (e.g., transistors!).
- Efforts of the People: Everyone worked hard with the desire for a better life and a prosperous Japan.
- Government Support: In 1960, Prime Minister Hayato Ikeda announced the "Income Doubling Plan," aiming to double national income in 10 years – a goal they impressively achieved!
Lifestyles Transformed! The Dream "Three Sacred Treasures" ✨
As the economy grew, people's lives became progressively richer. There were home appliances that everyone yearned for.
The Three Sacred Treasures (Late 1950s~)
Black-and-white TVs, electric washing machines, and electric refrigerators. Owning these was a status symbol.
The New Three Sacred Treasures (The "3 Cs") (Mid-1960s~)
Color TVs, air conditioners (Coolers), and automobiles (Cars). Also known as the "3 Cs." Owning a car for family drives was a dream!
With each new appliance, life became more convenient and enjoyable.
Nikkei Average Soared! 📈 Japan was on a Roll!
When the economy does this well, company profits soar. Consequently, more people want to buy those companies' stocks, and stock prices rise. During this era, the Nikkei Stock Average was on a clear upward trend! Of course, there were occasional pauses or slight dips, but overall, it grew significantly.
This period of prosperity had several named booms:
- Jinmu Boom: Around 1954-1957. Said to be the best boom since Emperor Jinmu.
- Iwato Boom: Around 1958-1961. Named after a myth where prosperity returned.
- Olympic Boom: Around 1962-1964. Driven by construction for the Tokyo Olympics.
- Izanagi Boom: Around 1965-1970. The longest post-war boom, lasting 57 months, named after a creator deity.
However, it wasn't all smooth sailing. Around 1965, there was a tough period called the "Securities Recession" (or Showa 40 Recession) when stock prices fell sharply. But Japan overcame this and continued its strong growth.
Nationwide Excitement! A Lineup of Big Events!
🗼 1964 Tokyo Olympics 🎌
Asia's first Olympic Games! It showcased Japan's recovery and growth to the world. The Tokaido Shinkansen (bullet train) and a network of expressways were built for this, rapidly developing Japan's infrastructure. The whole nation was thrilled!
☀️ 1970 Osaka World Exposition (Expo '70) 🌸
With the theme "Progress and Harmony for Mankind," people from all over the world flocked to Osaka. The exhibition of moon rocks drew massive queues!
These major events further boosted the Japanese economy. Around the time of Expo '70, the Nikkei Stock Average had risen to over 2,000 yen (a huge increase from its starting point of just over 100 yen!).
The Bright Side and the Dark Side of Growth...
While Japan was becoming increasingly prosperous, rapid industrialization also led to "pollution problems" (kougai mondai) such as air and water contamination. This is an important aspect of this era that shouldn't be forgotten and became a challenge for the next era.
Wow, what an incredible era! It might seem like a fairytale, but these events happened in Japan just a few decades ago.
However, this period of unrestrained growth couldn't last forever. Next, Japan faced an unexpected major crisis…! On the next page, we'll look at the "Oil Shock" that shook the world and how it affected the Nikkei Stock Average!