Japan is emerging from an economic period that is largely comparable with the US Great Depression. The Bank of Japan has signaled an end to its quantitative easing strategy under which it provided something on the magnitude of 5-6 times the amount of liquidity Japanese banks required. It has slowly begun reducing that excess liquidity.
The gradual normalization of monetary policy, the robust economic performance (5.5% in Q4 05), and the stabilization of real estate prices has given rise to speculation that Japan is back. But the real situation is more complicated and in many ways, rather than herald the return of the Rising Sun, it is just another day in Japan.