Heisei (平成) is the current era name in Japan. The name was introduced by Akihito, the current emperor of Japan, after the death of his father, Hirohito, the Showa Emperor, in 1989. The Heisei era started on January 8, 1989, thus that year corresponds to Heisei 1, and 2004 is Heisei 16.
The name "Heisei" is taken from two old Chinese history and philosophy books, namely Records of the Grand Historian (史記 Shiki) and the Classic of History (書経 Shokyō). In Shiki, the sentence "内平外成" (peace inside and prosperity outward) appears in the part honoring the wise rule of the legendary Chinese Emperor Shun. In Shokyō, the sentence "地平天成" (land is peaceful and sky is clear) appears. By combining both meanings, Heisei is to mean "peace everywhere".
1989 marked one of the most rapid economic growth spurts in Japanese history. With a strong yen and a favorable exchange rate with the dollar, the Bank of Japan kept interest rates low, sparking an investment boom that drove Tokyo property values up sixty percent within the year. Shortly before New Year's Day, the Nikkei 225 reached its record high of 39,000. By 1991, it had fallen to 15,000, signifying the end of Japan's famed "bubble economy."
The Recruit Scandal of 1988 had already eroded public confidence in the Liberal Democratic Party, which had controlled the Japanese government for 38 years. In 1993, the LDP was ousted by a coalition led by Hosokawa Morihiro. However, the coalition collapsed as parties had gathered to simply overthrow LDP and lacked an unified position on almost every social issue. The LDP returned to the government in 1996, when it helped to elect Social Democrat Murayama Tomiichi as prime minister.
In 1995, there was a large earthquake in Kobe. The same year, there was a sarin gas terrorist attack on the Tokyo subway system by the doomsday cult Aum Shinrikyo.
The Heisei period also marked Japan's reemergence on the world stage as a world military power. In 1991, Japan pledged billions of dollars to support the Gulf War but constitutional arguments prevented a participation in or support of actual war. Mine sweepers were sent after war as a part of reconstruction effort. Following the second invasion of Iraq, in 2003, Prime Minister Junichiro Koizumi's Cabinet approved a plan to send total of about 1,000 soldiers of the Self-Defense Forces to help in Iraq's reconstruction, the biggest overseas troop deployment since World War II without the United Nation's sanction. These troops were deployed in 2004.
On September 23, 2004, the Heisei 16 Niigata Prefecture Earthquakes rocked the Hokuriku region, killing 16 and injuring hundreds.