A lot of their strength with capitalism (which susila2 brought up) comes from the fact that they are very corporate and business-oriented. The majority of Japanese businesses have an autocratic leadership (management) style and this is not to mention that some businessmen there have been so devoted to their work that when their businesses failed, they actually took their own lives. When compared to other capitalist states, Japan's system is far superior. When people are so devoted to business, the progress is incredible. The more democratic management styles in business are often viewed negatively in this regard (often viewed as too lenient).
Just thought I'd bring that up, lol...
Japan has a capitalist system, and has done spectacularly well.
Among other things, it's a member of the G-8 (Group of 8) - the eight 'top' (in economic terms) industralized countries in the world. The others are the USA, UK, Germany, France, Italy, Canada and most recently the Russian Federation.
They do however embrace some liberal philosophys such as socialized medicine.