Thus, Japan became a so-called processing trade country, leveraging strong price competitiveness to drive exports and acquiring foreign currency. The driven exports increased corporate profits and household income, which were eventually poured into financial institutions as deposits and then passed on to firms, mainly to be used for fixed and R&D investments. Consequently, a virtuous cycle operated in the Japanese industry.
With this in place, firms and employees built a "win-win" relationship, in which firms gave employees a sense of assurance that their wages would rise constantly based on lifetime employment and seniority-based wages, and employees contributed to improving business performance with a sense of loyalty to their firms.