As a consequence, a "bubble" developed in relation to asset prices·land, securities, and practically everything else. Eventually, the "bubble" burst·in 1991·following a four-year spiraling increase in asset prices.
The profitability of Japan's leading corporations have been severely deflated by the collapse of the bubble (Rowley, 1993, pp. 42-43). High volumes of debt were incurred during the speculative period when interest rates were high. Subsequent to the collapse of the speculative bubble, the high interest debt remained while operating margins shrunk. These corporations also suffered losses because of participation in arbitrage and high-risk investments. The securities markets in Japan collapsed in the wake of the deflation of the bubble. The bubble was finally punctured when the Finance Ministry of the Japanese central government and Bank of Japan Governor Yasushi Mieno refused to prop-up the over-inflated asset prices any longer.
The Japanese economy functions differently to a significant extent from most of the
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