In the first decade after the end of the Cold War, Japanese leaders pursued a sensible two-track foreign policy. While strengthening its alliance with the United States, Japan cultivated a deeper relationship with its neighbors. Japan played a key role in creating the Asia Pacific Economic Cooperation (APEC) forum and proposed the regional security dialogue that eventually developed into the ASEAN Regional Forum. Prime Minister Morihiro Hosokawa’s refreshing candor about Japan’s aggressive war energized the process of historical reconciliation with the rest of Asia. In 1995, Prime Minister Tomiichi Murayama followed up with his historic, unequivocal apology for Japan’s militarist past that was endorsed by the cabinet and established the standard for subsequent statements of apology. Under Murayama’s leadership, Japan also inaugurated the Asian Women’s Fund, a groundbreaking public-private effort to provide redress for the suffering inflicted on women by Japan’s wartime system of sexual servitude.

Then, in 1997, Prime Minister Ryutaro Hashimoto launched his Eurasia diplomacy to improve relations with both Russia and China. The Japanese also responded quickly to address the East Asian financial crisis of that year and promoted subsequent multilateral efforts to enhance regional financial stability. The summit between Prime Minister Keizo Obuchi and South Korean President Kim Dae Jung in fall 1998 dramatically improved Japan-South Korea relations, and the Japan-China summit that soon followed endorsed 33 key areas for bilateral cooperation. Obuchi was also the first major leader to float the idea of six-party talks to deal with North Korea—a proposal the U.S. government embraced some three years later.

Since Obuchi’s sudden death in 2000, however, Japan’s Asian diplomacy has languished. At best, this drift imposes a huge opportunity cost for promoting a more stable order in East Asia; at worst, Japan could exacerbate destabilizing factors that already exist in the region. The security of a more robust alliance relationship with the United States has permitted Japan to continue this drift for some five years without a sober recognition of the long-term consequences. Meanwhile, Prime Minister Junichiro Koizumi, with his repeated visits to the controversial Yasukuni Shrine and his one-dimensional embrace of President George W. Bush, has been part of the problem.

On top of all this has been Japan’s burgeoning new nationalism. After suspicions that North Korean agents had abducted Japanese citizens during the late 1970s and early 1980s were confirmed, the Japanese media and public have understandably insisted that officials stand up more firmly on behalf of Japan’s national interests and the welfare of its citizens. Japan’s new nationalism also evinces a strong generational element. In addition to having no memory of wartime Japan or the early postwar years of devastation and reconstruction, Japanese youth today have no recollection of the student...