While one rarely hears it mentioned today, from the 1980s to the mid-1990s, high prices in Japan, that is, the need to address the difference between domestic and foreign prices, were frequently identified as a major issue with regard to Japan’s economy. Rationalization of the distribution system and deregulation were implemented to address the issue.
Rationalization of the distribution system, together with globalization, led to an increase in low-priced imports. Moreover, deregulation exerted downward pressure on prices by reducing margins in industries and of firms that were protected by regulation in the past.