Sitting in his office in Tokyo last week, a senior official pointed to a recently published volume called “Japan Rising”. “I look at that book every now and then to cheer myself up,” he said. It is easy to understand why. Right now, Japan has got that sinking feeling.

China is about to overtake Japan as the world's second-largest economy. The country's national debt has hit an awesome 180 per cent of gross domestic product, (un)comfortably the highest in the world among rich countries – and there is no credible plan in place to hack it back. Toyota, a company that used to embody Japan's reputation for quality, is enmeshed in a safety and public relations nightmare. Last year, the Japanese economy shrank by more than 5 per cent. And the high hopes that surrounded the reformist government of Yukio Hatoyama, the prime minister who was elected last summer, have quickly dissipated. Mr Hatoyama's approval ratings are sinking and the Japanese business and civil service establishment seem eager to dismiss him as an ineffectual clown.

How Japan reacts to this new sense of weakness – exaggerated though it may be – will matter to the whole world. The country's size and strategic importance make it critical to America's Pacific strategy and to China's geopolitical calculations.