The year 2005 was a momentous turning point for the world's second largest economy, and not just because of the end of stagnation and the rise of the Tokyo stock market. Two years earlier than expected, the population of Japan - the world's 10th largest nation - began to shrink. The number of Japanese fell by 19,000 last year to 127.76m, the government says.

Perversely, economists and Japanese officials greeted this excellent news with the kind of gloom evinced by Malthusian analysts during the twentieth-century panic about a global population explosion. Instead of famine, the new alarmists foresee labour shortages, empty schools, underfunded pension schemes and diminished national power. If nothing is done to increase the birth rate, Tokyo warns, the population will be cut by more than half within a century.