This is not a financial blog, but I can't resist adding my bit to the voluminous commentary on the world's financial and economic crisis. I will limit my comments to Japan's place in the scheme of things. Given my 39-year banking career (24 of which in Japan) and the fact that I've been living in Japan again since 2003, this seems a reasonable proposition.

But first a word about the context. By now it seems clear that the collapse of some of the biggest Wall Street names is not merely a blip in the financial system. It is a symptom of a deep seated disease: the sickness of American society. Far from the "fundamentals" of the U.S. economy being "sound" as so mindlessly claimed by John McCain just as the dominos were falling-they are thoroughly rotten. And the sickness is by no means confined to the financial sector, though the mindless lending and derivatives trading by Wall Street "bankers" no doubt tipped the system over the edge.

From the mistaken war in Iraq, the long denial of global warming, and the relentless preaching of "democracy" while cynically trading with some of the world's most repressive regimes, to the lack of public health insurance and the alarming neglect of vital infrastructure, the U.S. government of at least the past eight years is guilty of gross mismanagement. Add to that the evidence of unhealthy American eating patterns (more than 50% of the population is overweight, half of them obese), the pervasive gun culture, and above all, the irresponsible spending on housing and consumer goods based not on savings but on running up huge, unsustainable levels of personal debt - and the picture of America's multiple illnesses is becoming painfully clear.

Of course it's not America alone that is guilty. The United Kingdom emulated many of America's bad habits, as did most of the rest of Europe to varying degrees.

But what about Japan?

When comparing Japan's present financial and social conditions to those of the United States, it can safely be said that it suffers from none of the ailments enumerated above. To be sure, Japan is grappling with other serious problems such as a sharp fall in population, unresolved historical issues with its neighbours, a decline in the quality of education, a huge national debt, and an over-reliance on exports and manufacturing industries at a time when China and other countries are more competitive. These and other challenges will severely test the nation's leaders in the years ahead.

But for now and the foreseeable future, Japan's inner strengths are undeniable. It is a remarkable turnaround from its own bust of almost twenty years ago, when both stocks and property values fell precipitously, setting off a long decade of painful adjustments. After a short period of reckless spending, from the mid '70s to the late '80s, most Japanese returned to traditional virtues of prudence and living-within-one's-means. The result is that Japan today seems an island of sanity in a world that seems to have taken leave of its senses. Japan's leaders, long chastened by the debacle of the '90s, now seem newly emboldened, albeit reluctantly, to speak up, sometimes even offering advice. To wit:

• Prime Minister Taro Aso proposed calling a summit of the Group of Eight (with other nations added) on the economic crisis. and this was subsequently agreed between him and President Bush
• Japan has offered to send accountants and lawyers with experience in sorting out its financial mess in the 1990s to the U.S., to help evaluate America's toxic assets, i.e. its huge pile of sub-prime mortgages
• Japan has expressed dismay at the U.S. decision to remove North Korea from the 'axis of evil', and declined to resume giving aid to the country until it has accounted for the Japanese nationals it abducted in the past

Against this background, two remarkable and seemingly contradictory developments are worthy of note: the precipitous fall of the Nikkei stock index, on the scale of the steepest declines in New York and London; and the strong showing of the yen, which has risen to its highest level in years against the dollar and the euro.

The recent sharp decline in share values must be due in large part to the looming recession in Japan's chief export markets, the U.S. in particular, which will severely affect its auto makers and the whole of its manufactured goods industry. Added to this is an undoubted sense of panic, resulting in a flight to the relative safety of bank deposits and government bonds and, most of all, the massive sell-off of foreign investments by Japanese private and institutional investors. The unwinding of this so-called "Yen carry trade" is the main cause of the dramatic strengthening of the yen, which also benefits from what clearly is the global perception of the yen being - along with the dollar, yes -  a safe haven in this time of turmoil.

What we are seeing is the slow emergence of Japan as one of a handful of nations that will, over time, help the U.S. in managing the world. Predictions of America's demise as a great power are, I believe, premature. But there is a growing consensus that we are heading for a multi-polar world whose interdependence and co-operation will decide the fate of most of us.

Japan's new role will require great shifts in its society, far greater have been necessary in the post-war past. Its snug (and sometimes smug) island mentality must make way for true internationalism, which mandates changes in its political culture as well as a revamp of its educational systems to produce graduates able to communicate effectively across borders and provide leadership on many international fora. In short, Japan's traditional reluctance to 'get involved' must, in its own interest and that of the world, make way for a more activist stance.

The process will take time, but I believe it has started and is irreversible.