A New Japan?

The collapse of the bubble economy, increased foreign influence, and the Internet may finally bring about real change

It was a chilling moment, a throwback to the days before the crisis. On Oct. 5, Hakuo Yanagisawa, Japan's point man for financial reform, was abruptly removed. In his place: Michio Ochi, a 70-year-old ex-bureaucrat from the Ministry of Finance (MOF). Yanagisawa, in his brief tenure, had actually acted like a regulator, calling Japan's wayward banks to task, forcing mergers, and opening the sector to foreign investment. Now the markets fear that Ochi, an insider, will lead the forces of reaction to undo Yanagisawa's work.

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