JAPAN's LENGTHENING REACH - AND A NEW START FOR ME

Since moving back from Curasao to the Amsterdam Head Office in 1979 to take charge of the bank's International Banking Department, I had visited Japan twice. Each visit provided further proof of Japan's impressive recovery from the recession of lhe middle and late 1970s. Far from acting out those dire predictions of inevitable decline I had been hearing during previous visits, Japan seemed embarked on an unstoppable march toward economic greatness.

Why this dramatic turnaround? It was mostly due to its ever-advancing technology and its highly successful export industry. Japan had made astonishing inroads into US markets with sophisticated, well-priced products ranging from cars to computer chips. These incursions had alarmed and riled the industrial establishment there, but rather than questioning their own competitiveness, the affected industries cned foul. Demands for ‘anti-dumping’ measures and quantitative import restrictions were becoming louder, even as the more progressive among business leaders were trying to emulate the secrets of the Japanese success — and not only in the US.

Yet, as Japan's fundamentals hadn't changed much during the past 3 or 4 years, I couldn't help feeling that the new mood of exuberance and unlimited confidence was just as unwarranted as the bottomless pessimism it had replaced. The new boom was, after all, largely the result of the sharp, cyclical upturn in world demand, not of any significant shift in Japanese policies such as a sustained effort to stimulate domestic consumption or measures to alleviate the structural shortage of affordable housing. Without such bold new departures Japan's prosperity would continue to depend heavily on its export markets, most importantly the US. Although Japan's policymakers were of course well aware of this vulnerability to external conditions, little was done to lessen it. The ‘normal’ cyclical gyrations in the economy would therefore likely continue to be accompanied by similar violent swings in the popular mood.

But for now, Japan seemed invincible.

Meanwhile, the scope of my new job in Amsterdam proved much less challenging than expected, and when Pierson's parent organisation, AMRO Bank, asked me if I would like to move to New York to set up the bank's first American branch, I jumped at the opportunity.