<P> At the heart of the keiretsu conglomerates' success lay city banks, which lent generously, formalizing cross-share holdings in diverse industries . The keiretsu spurred both horizontal and vertical integration, locking out foreign companies from Japanese industries . Keiretsu had close relations with MITI and each other through the cross-placement of shares, providing protection from foreign take - overs . For example, 83% of Japan's Development Bank's finances went toward strategic industries: shipbuilding, electric power, coal and steel production . Keiretsu proved crucial to protectionist measures that shielded Japan's sapling economy . </P> <P> Keiretsu also fostered an attitude shift among Japanese managers that tolerated low profits in the short - run because keiretsu were less concerned with increasing stock dividends and profits and more concerned about interest payments . Approximately only two - thirds of the shares of a given company were traded, cushioning keiretsu against market fluctuations and allowing keiretsu managers to plan for the long - term and maximize market shares instead of focusing on short - term profits . </P> <P> The Ikeda Administration also instituted the Foreign Exchange Allocation Policy, a system of import controls designed to prevent the flooding of Japan's markets by foreign goods . MITI used the foreign exchange allocation to stimulate the economy by promoting exports, managing investment and monitoring production capacity . In 1953, MITIs revised the Foreign Exchange Allocation Policy to promote domestic industries and increase the incentive for exports by revising the export - link system . A later revision based production capacity on foreign exchange allocation to prevent foreign dumping . </P> <P> During the time of reconstruction and before the 1973 oil crisis, Japan managed to complete its industrialization process, gaining significant improvement in living standards and witnessing a significant increase in consumption . The average monthly consumption of urban family households doubled from 1955 to 1970 . Moreover, the proportions of consumption in Japan was also changing . The consumption in daily necessities, such as food and clothing and footwear, was decreasing . Contrastingly, the consumption in recreational, entertainment activities and goods increased, including furniture, transportation, communications, and reading . The great increase in consumption stimulated the growth in GDP as it incentivized production . </P>

World war ii led to japan emerging as a regional power