In a move that astonished the world, in July 1971 President Nixon announced his intent to visit the People's Republic of China (PRC) in 1972 and hence initiate the normalization of Sino-American relations. Japan, the United States's closest ally in East Asia, was not informed about Nixon's trip prior to its announcement. This situation became known in Japan as the first Nixon "shock," or shokku. The ostensible motivation behind Nixon's action was not to isolate Japan, but to warm relations with the PRC, within the context of the bipolar U.S.-USSR Cold War struggle. In Japan, Prime Minister Sato Eisaku, who was given no advance notice of the U.S. policy change vis–à–vis China, privately suggested that the United States was being insensitive to Japan's security position in Asia. Moreover, it seemed to the Japanese public that the United States was, at worse, retreating from its security commitments to Japan or, at best, exploiting the comfortable relationship between the two countries to the point of ignoring Japan's security needs.
The second Nixon shokku was the U.S. president's statement that initiated the end of the gold standard, one of the mainstays of the post–World War II world economy. In August 1971 Nixon announced that the United States would no longer exchange dollars for gold. This and related steps denoted the start of a floating exchange rate system by 1973. Nixon also put in place a 10 percent surcharge on all imports. Both moves were designed to improve the position of American exporters who were disadvantaged by an overvalued dollar. Japan, with its high dependence on the U.S. market, suffered more than other U.S. trading partners as the yen appreciated in value, making Japanese products more expensive in the United States and other markets.
Nixon's rapprochement with China and the unilateral termination of the fixed-exchange rate system, coupled with the high cost to Japanese exporters of the new trade policy, raised serious questions about the American commitment to Japan. In large part, Japan's shock with the moves by Nixon was based on the fact that Japanese leaders were not consulted.
