Vanderbilt Journal of Transnational Law


Mitsuru Misawa

First Page



Japanese securities exchanges, which were closed at the beginning of the Allied Force occupation in 1945, were permitted to reopen in 1949. During the following two decades, the Japanese economy displayed vigorous growth. An expansion of the operations of the securities markets accompanied the expansion of the economy, but the expansion did not progress evenly. The development of the securities markets in the post-War period can be divided into a number of stages: (1) the period of confusion and frustration (August 1945 to August 1949); (2) the period of reorganization (May 1949 to January 1954); (3) the period of high growth (January 1954 to June 1961);(4) the period of stagnation (July 1961 to January 1968); and (5) the period of internationalization (January 1968 to the present).

A. The Period of Confusion and Frustration (1945-1949)

The defeat in World War II left the Japanese economy in a state of near breakdown. Termination of the War disrupted the control mechanism of the economy and for a while created a chaotic condition. The rate of price increases was alarming. In order to counteract the sharp spiraling of inflation, occupation authorities (SCAP) in 1946 directed the Japanese Government to enforce emergency financial measures. One of these measures was the issuance of a new currency, while old currency in excess of specified amounts was frozen in "blocked" accounts. Since it was permissible to use frozen funds to purchase corporate stocks, there was a notable increase in securities transactions.