Japanese foreign policy on Southeast Asia

Japanese foreign policy toward Southeast Asia, the diverse region stretching from South Asia to the islands in the South Pacific Ocean, was in part defined by Japan's rapid rise in the 1980s as the dominant economic power in Asia. The decline in East-West and Sino-Soviet tensions during the 1980s suggested that economic rather than military power would determine regional leadership. During the decade, Japan displaced the United States as the largest provider of new business investment and economic aid in the region, although the United States market remained a major source of Asia-Pacific dynamism.

Following the rise in value of the yen relative to the US dollar in the late-1980s (after the Plaza Accord), Japan's role as a capital and technology exporter and as an increasingly significant importer of Asian manufactured goods made it the core economy of the Asia-Pacific region.

Japan remains the largest donor of economic aid to the region.^[1]