From the late 1980s through the 1990s, Japan experienced significant economic and political shifts. The 1989 economic boom marked the pinnacle of rapid economic growth, driven by low-interest rates and an investment frenzy. This bubble burst by the early '90s, leading to a period of economic stagnation known as the "Lost Decade."^[99] During this time, the long-dominant Liberal Democratic Party (LDP) was briefly ousted from power, although it returned quickly due to the coalition’s lack of a unified agenda. The early 2000s also marked a changing of the guard in Japanese politics, with the Democratic Party of Japan briefly taking power before scandals and challenges like the 2010 Senkaku boat collision incident led to their downfall.

Japan's relationship with China and Korea has been strained due to differing perspectives on its wartime legacy. Despite Japan making over 50 formal apologies since the 1950s, including the Emperor's apology in 1990 and the Murayama Statement of 1995, officials from China and Korea often find these gestures inadequate or insincere.^[100] Nationalist politics in Japan, such as denial of the Nanjing Massacre and revisionist history textbooks, have further inflamed tensions.^[101]

In the realm of popular culture, the 1990s saw a surge in the global popularity of Japanese anime, with franchises like Pokémon, Sailor Moon, and Dragon Ball gaining international fame. However, the period was also marred by disasters and incidents such as the 1995 Kobe earthquake and the sarin gas attacks in Tokyo. These events led to criticisms of the government's handling of crises and spurred the growth of non-governmental organizations in Japan.

Internationally, Japan took steps to reassert itself as a military power. While the nation's pacifist constitution restricted its involvement in conflicts, Japan did contribute financially and logistically to efforts like the Gulf War and later participated in Iraq's reconstruction. These moves were sometimes met with international criticism but indicated a shift in Japan's post-war stance on military engagement.

Natural disasters, notably the devastating 2011 Tōhoku earthquake and tsunami, as well as the ensuing Fukushima Daiichi nuclear disaster, had profound impacts on the country.^[102] The tragedy triggered a national and global reevaluation of nuclear energy and exposed weaknesses in disaster preparedness and response. This period also saw Japan grappling with demographic challenges, economic competition from rising powers like China, and a host of internal and external challenges that continue to shape its trajectory into the current decade.