This study attempts to examine the relationship between the ‘bubble economy in the late 1980s in Japan and its developmental strategies in the earlier decades, and then explore the historical origine of ‘the bubble economy’. Since the World War Ⅱ Japan had achieved the successful economic development before the late 1980s. It has been often considered that the strong intervention of the Ministry of Finance and intensive cooperation between groups of companies, based on banks are primary elements on economic success in Japan. However, the Japanese economy began to suffer from ‘the bubble economy’ after the late 1980s. There have been a number of explanations for the cause of ‘the bubble economy’ and its consequences. This study puts forward the argument that the outcome of developmental policy in 1960-80 has negatively influenced economic transition in Japan after the late 1980s, and then explores Japanese government’ effort to restore its economy at present.