Osaka has been a major port and mercantile centre from the beginning of Japan’s recorded history. It was also briefly the first capital of Japan (before the establishment of a permanent capital at Nara). During its early days, Osaka was Japan’s centre for trade with Korea and China, a role which it shares today with Kōbe and Yokohama.
In the late 16th century, Osaka rose to prominence when Toyotomi Hideyoshi, having unified all of Japan, chose Osaka as the site for his castle. Merchants set up around the castle and the city grew into a busy economic centre. This development was further encouraged by the Tokugawa shōgunate, which adopted a hands-off approach to the city, allowing merchants to prosper unhindered by government interference.
In the modern period, Tokyo has usurped Osaka’s position as economic centre of Japan, and most of the companies formerly headquartered in Osaka have moved east. However, Osaka is still an economic powerhouse, and the city is ringed by factories churning out the latest in electronics and hi-tech products.