Japan’s economy for more than two decades suffers stagnation. This is the reaction of the national institutional system to the changing conditions in the global economy. At the time, economic model created in Japan was dramatically different from the Western ones, this is due to national traditions and historical background of the country. In the article the author compares the characteristics of the Japanese model with its Western analogues on the most important features. Institutional features of the economic activity in Japan in the past were the driving forces of the «economic miracle» and formation of the innovative economy. However, the evolving process of globalization has led to dramatic changes in the economic environment, and high adaptive qualities of the Japanese model ceased to work. The reforms undertaken by the government of Japan, aimed at creating the new model of national economy, different from that which was created during the catch-up development period in the history of the country. The article highlights the main directions of modernization of the Japanese economy, the basic parts of the New strategy of economic growth generated by the government. Significant changes occur in relation to the more openness of the economy towards greater foreign business presence in domestic markets of the country.