Pax Nipponica

Why Japan is best positioned to lead a changing world.

Japan is in a unique position to emerge as a true 21st-century global leader. Clearly, the world is becoming increasingly polarized, confrontational, and uncertain. Who will write the rules governing our future? In my view, no nation is better placed than Japan to mediate between the two current superpowers, the United States and China. This is true for all aspects of policy leadership, not just trade, finance, and economy but also diplomacy and global security. 

The primary lesson of the 21st century so far is that neither Pax Americana nor Pax Sinica is an acceptable solution for much of the world. Yes, there is intensifying rivalry between the two, but for different reasons. Neither Washington nor Beijing offers a credible answer to the aspirations of the Global South or the problems facing old-world Europe. And the more both Washington and Beijing leaders insist on a with-us-or-against-us approach to their allies, the greater the resentment against the hegemon will grow. Trust is eroding fast. In contrast, a Pax Nipponica would almost certainly be welcomed by the world. Japan has what it takes to mediate and moderate a new world order. Japan is the honest broker the world can trust.

To be sure, my vision of a Pax Nipponica is a next step evolution from the Pax Britannica (1815–1914) and the Pax Americana (1945–???). Both Britain and America ruled the world by brute force: Their currencies were the undisputed anchor currencies of the global financial system; their leading companies were the undisputed innovators and oligopolistic leaders of global commerce; their universities attracted and educated the best and brightest from all over the world; and their armies were the most advanced and dominant. Today’s Japan has none of this. There is literally no area in both hard and soft power where Japan dominates the world. And that’s precisely why Pax Nipponica is possible.

Japan is not threatening, not feared; but it is admired. Japan is the world’s only true post-industrial society, a frontrunner in many areas. It is a role model for having engineered the fastest and most successful economic development ever, for having a socio-economy resilient enough to survive the biggest deflation cycle in history without suffering social unrest and disruptive inequality. It is now teaching the world how to age gracefully and how to maintain and create equitable prosperity by enhancing asset income rather than relying primarily on employment income.

All over the world, Japan is admired for its exemplary balance between intense economic modernization and solid perseverance of national traditions and social norms; for having not just imported Western culture, but perfected and improved upon it in so many areas—from architecture and fashion to food and video games, and even sports such as male and female figure skating, golf, and baseball.

Make no mistake: Viewed from a global perspective, Japan is the most highly respected nation and culture in the East, West, North, and South of this world. Japan has what it takes to lead a global Pax Nipponica.

What’s Next for Japan?

What about the domestic perspective? Is Japan’s elite ready to lead and orchestrate a global Pax Nipponica? It is, of course, not quite right for a non-Japanese to answer this question. I personally think the answer should be yes. This is because the world desperately needs a trusted and honorable mediator, now more than ever. More importantly, in my view, the country stands at a historic inflection point—Japan needs to embrace and rally behind a new goal. Post-war, post-bubble, post-deflation, post-lost decades—Japan knows what’s behind it, but doesn’t quite know where to go from here.

It is not a coincidence, in my view, that the Liberal Democratic Party (LDP) has once again lost control of parliament, just as they did in the early 1990s when Japan had a similar breakpoint in the zeitgeist once the overarching post-war goal of catching up to the United States had been achieved. Now the overarching post-bubble goal of ending deflation and, at the same time, gracefully restructuring the baby boomer salarymen-based corporate culture has also been completed. Then as now, the LDP has no answer to “What’s next for Japan?”

Beyond the Settlement

When I arrived in Tokyo almost 40 years ago, then-Prime Minister Yasuhiro Nakasone was promoting his Comprehensive Settlement of the Post-War Accounts (Sengo Seiji no Sokessan). To me, as a German national, a lot of Nakasone’s arguments and reasoning made sense. To this day, I very much admire his central demand that there must be more to Japan’s national ambitions than economic centrism (keizai chushin shugi), and that Japan should unmark itself as a defeated country and build a post post-war system.

However, I have always been puzzled by how inward-looking, how narrowly focused on only Japan the elite’s call to settle post-war accounts has been. No global aspirations, no vision, and no demands on Japan’s elite to leverage the country’s strength and wisdom to build a better world and promote a better humanity.

Forty years ago, this was perhaps understandable, because Japan’s elite still needed to muster strength to say no to America: it was a big deal when Sony founder Akio Morita and then LDP heavyweight Shintaro Ishihara published an article by that title—「NO」と言える日本—in 1989 in Japanese. The English version was released in 1991. Was Japan’s elite really ready to revolt against their US masters, or was this just a sign of bubble-empowered hubris? Either way, it was all “no” with zero insights or vision of the new “yes” for which Japan should strive.

But that was then. In 2026, Japan has a unique opportunity to reset national ambitions and goals. It’s not about saying yes or no to America (or China). The world is waiting for Japan to say, “We propose to do it this way.” Japan has what it takes to be a global rulemaker and mediator between East and West, North and South. Pax Nipponica is an ambition the world is waiting for, and one Japan’s elite should embrace. As a Japan optimist, I hope they will.