Many of the recent studies on the Japanese economy focus on its decade-long slump and the economic policies that may help end it. In contrast, this paper focuses on two specific developments during this period that have largely been overlooked in the literature: the continuous growth of foreign investments and strong Japanese exports despite the gradual loss of comparative advantage in some products. The study concludes that when these developments and their ramifications are taken into account, the overall performance of the Japanese economy during the last decade is not as bad as it first appears. Rather, the past ten years for the Japanese economy may be considered a period of transition, from an economy of high growth to one of lower but more mature growth.