Delivering his New Year address to the nation on television, Prime Minister Noda Yoshihiko showed optimism about his country’s future saying that the year 2012 will be the year of Japan’s rebirth. The year that just ended saw Japan struck by a mega earthquake, followed by a giant tsunami that destroyed an entire coastline, killed nearly 25,000 people with many more missing, and culminated in the meltdown in the Fukushima Daiichi nuclear power plant. While considering what the coming year holds for Japan, the Japanese people seem quietly determined to recover from the tragedy. As their leader, Noda understands the resilience of his people and bases his optimism on such an understanding. This Issue Brief assesses the pitfalls and opportunities as well as the likely course of action that the Japanese political leadership is going to define in the coming months.