The world is moving ever faster toward a truly globalized economy. International trade in goods and services is expanding at exponential rates, financial markets are becoming ever more integrated, and multinational companies with operations around the globe are ubiquitous. Few corners of the world have been left unaffected by these trends, and how nations respond to the opportunities and challenges posed by globalization is a key determinant of their future economic prosperity.

Although globalization has been greeted with a mixture of excitement and apprehension in most places, few developed countries appear as ambiguous toward it as Japan. On the one hand, the island nation has greatly benefited from the opportunities provided by access to world markets. Exports played a significant role in the country's stellar economic rise during the postwar period and external demand propped up the economy when domestic demand collapsed during the 1990s. In addition, Japanese firms have actively invested overseas, purchasing real estate and movie studios in the United States and setting up production facilities in the United States, Europe, and the rest of Asia. Yet, throughout most of its history, Japan has been wary of granting access to its own domestic market. During the early postwar period, government policies placed tight controls on imports and inward investment, and even after many regulations were lifted during the 1960s and 1970s, exports to and investment in Japan continued to face various informal obstacles that severely limited the presence of foreign firms in the Japanese market.