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In World War 1 (called the "Great War", or the "World War" back then), Japan was on the side of the Allies. As a result, during the war and even for a while after the war ended, Japan experienced a period of economic prosperity, and successfully exported various goods to the west. Eager to be seen as an important world power, Japan participated with other nations in addressing current problems in the world, joining the League of Nations in 1920, and even participated in a conference on arms reductions.

But some countries were concerned at how Japan was also trying to extend its influence in China and elsewhere in Asia; and not everyone trusted that the Japanese government was sincere about wanting peace. Also, the boom in exports ended by 1919, and soon Japan found itself experiencing economic problems that led to serious shortages. The euphoria of war-time prosperity now turned into dissatisfaction among the population, and even causing some riots about the high cost of food. Inflation grew worse throughout the 1920s, and so did unemployment.

Further, U.S. policy towards Japan began to deteriorate, as a period of anti-Immigration fervor led to the passage by congress of the Asian Exclusion Act in 1924; this act restricted Japanese immigration to the United States, and provoked outraged in Japan, especially among nationalists who saw it as a slap in the face, given their belief that Japan had tried to be helpful to the west during the war. Nationalism began to increase, as did a belief that Japan had a right to expand its power and attempt to gain dominance over other Asian countries.

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