For Part One go here.
1914 saw the outbreak of the Great War. Japan, though part of the Entente, contributed very little to the military side of things, but this doesn’t mean it was a major player in the war.
Japanese weapon factories manufactured millions and millions of artillery shells for the Allies, Japanese rifles were supplied to the Russian and British armies in large quantities and, most importantly, the zaibatsu-owned shipyards churned out freighters at breakneck speed: in just four years Japan doubled its already large mercantile fleet, without taking into account the ships sold to the Allies. Exports rose by 266% in three years and Japan started turning a large trade surplus, helped by the power vacuum left by British and French companies’ commitment to the war effort (Continental Asia was largely unaffected by the war and still needed industrial goods).
In late 1916, after the Battle of Verdun, Mitsui Bussan analysts concluded (correctly as it turned out) that in three years at most the war would be over with an Allied victory. They concluded a recession would hit Japan hard as demand for munitions would drastically drop and French and British competitors would be back in business. Hence Mitsui started to steadily reduce its transaction volumes almost immediately. Other zaibatsu, thinking Mitsui had some serious internal issue, stepped in to seize what they thought was a golden opportunity. Recession hit immediately after the Armistice in November 1918, as France, Italy and Britain cancelled large munitions orders overnight. Many zaibatsu were ruined or barely survived the hit while Mitsui’s dominating position was strengthened.