Tokyo―Once again, Japan appears to have flirted with disaster, and won. Just over a month ago, stocks were at 18-year lows and many analysts were saying the country's banks and businesses were in such bad shape that the economy could face a systemwide crisis―perhaps by March 31, the end of the fiscal year. Since then, government stopgap measures have helped push the stock market up 20%, the business cycle has shown signs of picking ap, and Japanese officials-such as Vice Economy Minister Yuzo Kobayashi―have declared the chance of an economic or financial crisis occurring "close to zero." But most long-time Japan watchers are still wary, because they have seen this happen before. Time and again during the past few years, problems in Japan's banking system or financial markets have threatened to spin out of control, only to be reined in at the last moment by the government. Last year around this time, Japanese policymakers helped reverse a similar stock-market fall by promising a faster cleanup for banks' bad loans.
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