At least in TVs Japan is still seriously competing, but for mobiles, they've completely missed out. Ten years ago, Japanese mobiles were the best around, with features like e-mail, color screens, Java apps ets years before the West had them... yet today, not a single Japanese company makes it into the top 10. (Joint venture SonyEricsson is still in there, but they lost nearly half their market share in a year and are now trying to arrest their slide by piggybacking on Google's Android OS.)

And re: the pension issue, the problem is that the aging majority has a strong short-term vested interest in keeping pensions high, and no incentive to do anything to change the system. They won't be around to see the Japanese government bankrupted...

Speaking of which, what's the FT opinion on how long the yen will continue to be as strong as it is at the moment? It seems to me that the only way out both for debt repayment and deflation is that sooner or later the Japanese government will have to start printing money ("quantitative easing"), and that will obviously weaken the yen.