Recent research has demonstrated the possibility of welfare-enhancing industrial policy. This paper analyses the impact of industrial policy on Japan's trade pattern, and explores the possibility that it has been welfare-enhancing. Econometric results indicate that industrial policies have indeed had an impact on Japan's trade specialisation. These results are obtained contemporaneously and when the explanatory variables are lagged, suggesting either that policymakers have been forward-looking or that policy interventions have had long-lasting effects. Although some cases of successful industrial targeting are uncovered, welfare-enhancing interventions appear to have been the exception rather than the rule.