Japan's trajectory under globalization is critically reviewed using the world-system perspective and the methodology of historical sociology. The Japanese miracle in the postwar period was a result of interplay between world-systemic opportunities and internal and regional institutional transformation. Japanese success invited US policy changes, ending the growth regime of accumulation in which state-led national economic development was pursued with distributional concessions given to workers. It is argued that misguided policies based on incorrect economic theories under the strong yen, pushed by the US since 1985, prepared a bubble that then burst. The institutions that had provided the Japanese miracle became the source of problems as Japan entered the debacle period in the 1990s. The Japanese debacle was part of the phenomenon of a 'prosperous US and the debacle of the rest.' This development was a result of the change in the regime of accumulation from a growth regime to a distribution regime where the rentier class took control of distribution and the project of national economic development was replaced by the monopolistic competition of global corporations. For Japan, both traditionalism and neoliberalism are dysfunctional. In the short run, Japan as a society needs to focus on survival and the maintenance of people's living standards under the new rules of the accumulation game imposed by the US. In the medium run, Japan needs to challenge US dollar hegemony ushered in by the new rules. In the long run, the Japanese need to examine whether they should keep engaging in the game of capitalist accumulation.