Economy of Japan
Encyclopedia
The economy of Japan
, a free market economy, is the third largest in the world after the United States
and the People's Republic of China
, and ahead of Germany at 4th. According to the International Monetary Fund
, the country's per capita GDP（PPP）was at $33,805 or the 24th highest in 2010.
For three decades from 1960, Japan experienced rapid economic growth, which was referred to as the Japanese post-war economic miracle
. With average growth rates of 10% in the 1960s, 5% in the 1970s, and 4% in the 1980s, Japan was able to establish and maintain itself as the world's second largest economy from 1968 until 2010, when it was supplanted by the People's Republic of China
. However, in the second half of the 1980s, rising stock and real estate prices caused the Japanese economy to overheat
in what was later to be known as the Japanese asset price bubble
. The economic bubble
came to an abrupt end as the Tokyo Stock Exchange
crashed in 1990–92 and real estate prices peaked in 1991. Growth in Japan throughout the 1990s at 1.5% was slower than growth in other major developed economies, giving rise to the term Lost Decade
.
The problems of the 1990s may have been exacerbated by domestic policies intended to wring speculative excesses from the stock and real estate markets. With government efforts to revive economic growth throughout the 1990s unsuccessful, Junichiro Koizumi
adopted policies to promote exports, effectively raising GDP on an average of 2.1% annually from 2003 to 2007. Subsequently, the global financial crisis and a collapse in domestic demand saw the economy shrink 1.2% in 2008 and 5.0% in 2009. Japan has the world's highest gross sovereign debt
amounting at 225% of GDP or US$10.55 trillion.
A mountainous, volcanic island country, Japan has inadequate natural resources
to support its growing economy and large population. Although many kinds of minerals were extracted throughout the country, most mineral resources had to be imported in the postwar era. Local deposits of metal-bearing ores were difficult to process because they were low grade. The nation's large and varied forest resources, which covered 70 percent of the country in the late 1980s, were not utilized extensively. Because of political decisions on local, prefectural, and nation levels, Japan decided not to exploit its forest resources for economic gain. Domestic sources only supplied between 25 and 30 percent of the nation's timber needs. Agriculture and fishing were the best developed resources, but only through years of painstaking investment and toil. The nation therefore built up the manufacturing and processing industries to convert raw materials imported from abroad. This strategy of economic development necessitated the establishment of a strong economic infrastructure to provide the needed energy, transportation, communications, and technological know-how.
Deposits of gold
, magnesium
, and silver
meet current industrial demands, but Japan is dependent on foreign sources for many of the minerals essential to modern industry. Iron ore, copper
, bauxite
, and alumina must be imported, as well as many forest products.
In 2010 GDP Growth in the final three months was -2.9% but total GDP Growth for 2010 was 4.0%, one of the highest growth rates for about 20 years. But Japan's economy was disrupted in March 2011 due to the earthquake and the effect of the tsunami
. GDP contracted by 3.5% in Q1 of 2011. As Japan's economy has suffered two quarterly contractions in a row, Japan reentered recession. In 2008-09 the economy had contracted 6.4%. However, output is expected to bounce back in the second half of 2011, as supply constraints ease and reconstruction accelerates. From 1992 up until now Japan has had economic problems with an average GDP growth of 1%-2% growth. 2011 GDP is expected to Contract 0.7%, 2012 GDP Growth is expected to be at 2.9%, according to the OECD.
The economic history of Japan
is one of the most studied economies for its spectacular growth in three different periods. First was the foundation of Edo
(in 1603) to whole inland economical developments, second was the Meiji Restoration
(in 1868) to be the first non European power, third was after the defeat of World War II
(in 1945) when the island nation rose to become the world's second largest economy.
's accounts of gilded temples and palaces, but also due to the relative abundance of surface ores characteristic of a massive huge volcanic country, before large-scale deep-mining became possible in Industrial times. Japan was to become a major exporter of copper and silver during the period.
Renaissance
Japan was also perceived as a sophisticated feudal society with a high culture and a strong pre-industrial technology. It was densely populated and urbanized. Prominent European observers of the time seemed to agree that the Japanese "excel not only all the other Oriental peoples, they surpass the Europeans as well" (Alessandro Valignano
, 1584, "Historia del Principo y Progresso de la Compania de Jesus en las Indias Orientales).
Early European visitors were amazed by the quality of Japanese craftsmanship and metalsmithing. This stems from the fact that Japan itself is rather poor in natural resources found commonly in Europe, especially iron. Thus, the Japanese were famously frugal with their consumable resources; what little they had they used with expert skill.
The cargo of the first Portuguese ships (usually about 4 smaller-sized ships every year) arriving in Japan almost entirely consisted of Chinese goods (silk, porcelain). The Japanese were very much looking forward to acquiring such goods, but had been prohibited from any contacts with the Emperor of China
, as a punishment for Wakō
pirate raids. The Portuguese (who were called Nanban, lit. Southern Barbarians) therefore found the opportunity to act as intermediaries in Asian trade.
coincides with the last decades of the Nanban trade period, during which intense interaction with European powers, on the economic and religious plane, took place. It is at the beginning of the Edo period that Japan built her first ocean-going Western-style warships, such as the San Juan Bautista
, a 500-ton galleon
-type ship that transported a Japanese embassy headed by Hasekura Tsunenaga
to the Americas, which then continued to Europe. Also during that period, the bakufu commissioned around 350 Red Seal Ships
, three-masted and armed trade ships, for intra-Asian commerce. Japanese adventurers, such as Yamada Nagamasa
, were active throughout Asia.
In order to eradicate the influence of Christianization
, Japan entered in a period of isolation called sakoku
, during which its economy enjoyed stability and mild progress.
Economic development during the Edo period included urbanization
, increased shipping of commodities, a significant expansion of domestic and, initially, foreign commerce
, and a diffusion of trade and handicraft
industries. The construction
trades flourished, along with banking facilities and merchant
associations. Increasingly, han authorities oversaw the rising agricultural
production and the spread of rural handicrafts.
By the mid-eighteenth century, Edo had a population of more than 1 million and Osaka
and Kyoto
each had more than 400,000 inhabitants. Many other castle town
s grew as well. Osaka and Kyoto became busy trading and handicraft production centers, while Edo was the center for the supply of food and essential urban consumer goods.
Rice was the base of the economy, as the daimyo collected the taxes from the peasants in the form of rice. Taxes were high, about 40% of the harvest. The rice was sold at the fudasashi market in Edo
. To raise money, the daimyo used forward contract
s to sell rice that was not even harvested yet. These contracts were similar to modern futures trading.
During the period, Japan progressively studied Western sciences and techniques (called rangaku
, literally "Dutch studies") through the information and books received through the Dutch traders in Dejima
. The main areas that were studied included geography, medicine, natural sciences, astronomy, art, languages, physical sciences such as the study of electrical phenomena, and mechanical sciences as exemplified by the development of Japanese clockwatches, or wadokei, inspired from Western techniques.
Economic developments of the prewar period
began with the “Rich State and Strong Army Policy
” by the Meiji government. During the Meiji period
(1868–1912), leaders inaugurated a new Western-based education system for all young people, sent thousands of students to the United States and Europe, and hired more than 3,000 Westerners to teach modern science, mathematics, technology, and foreign languages in Japan (Oyatoi gaikokujin). The government also built railroads, improved road, and inaugurated a land reform program to prepare the country for further development.
To promote industrialization, the government decided that, while it should help private business to allocate resources and to plan, the public sector was best equipped to stimulate economic growth. The greatest role of government was to help provide the economic conditions in which business could flourish. In short, government was to be the guide and business the producer. In the early Meiji period, the government built factories and shipyards that were sold to entrepreneurs at a fraction of their value. Many of these businesses grew rapidly into the larger conglomerates
. Government emerged as chief promoter of private enterprise, enacting a series of probusiness policies.
In the mid 1930s, the Japanese nominal wage rates were 10 times less than the one of the U.S (based on mid-1930s exchange rates), while the price level is estimated to have been about 44% the one of the U.S.
From the 1960s to the 1980s, overall real economic growth has been called a "miracle"
: a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s. By the late Eighties, Japan had moved from being a low-wage to a high-wage economy.
Growth slowed markedly in the late 1990s also termed the Lost Decade
, largely due to the Bank of Japan's failure to cut interest rates quickly enough to counter after-effects of over-investment during the late 1980s
. Some economists believe that because the Bank of Japan failed to cut rates quickly enough, Japan entered a liquidity trap
. Therefore, to keep its economy afloat, Japan ran massive budget deficits (added trillions in Yen to Japanese financial system) to finance large public works
programs.
By 1998, Japan's public works projects still could not stimulate demand enough to end the economy's stagnation. In desperation, the Japanese government undertook "structural reform" policies intended to wring speculative excesses from the stock and real estate markets. Unfortunately, these policies led Japan into deflation on numerous occasions between 1999 and 2004. In his 1998 paper, Japan's Trap, Princeton economics professor Paul Krugman
argued that based on a number of models, Japan had a new option. Krugman's plan called for a rise in inflation expectations to, in effect, cut long-term interest rates and promote spending.
Japan used another technique, somewhat based on Krugman's, called Quantitative easing
. As opposed to flooding the money supply with newly printed money, the Bank of Japan expanded the money supply internally to raise expectations of inflation. Initially, the policy failed to induce any growth, but it eventually began to affect inflationary expectations. By late 2005, the economy finally began what seems to be a sustained recovery. GDP growth for that year was 2.8%, with an annualized fourth quarter expansion of 5.5%, surpassing the growth rates of the US and European Union
during the same period. Unlike previous recovery trends, domestic consumption has been the dominant factor of growth.
Despite having interest rates down near zero for a long period of time, the Quantitative easing strategy did not succeed in stopping price deflation. This led some economists, such as Paul Krugman, and some Japanese politicians, to speak of deliberately causing hyperinflation
. In July 2006, the zero-rate policy was ended. In 2008, the Japanese Central Bank still has the lowest interest rates in the developed world, deflation has still not been eliminated and the Nikkei 225 has fallen over approximately 50% (between June 2007 and December 2008).
The Economist
has suggested that improvements to bankruptcy law, land transfer law, and tax laws will aid Japan's economy.
In recent years, Japan has been the top export market for almost 15 trading nations worldwide.
makes a quarter of electricity production and Japan would like to double it in the next decades.
Japan's road spending has been large. The 1.2 million kilometers of paved road are the main means of transportation. Japan has left-hand traffic. A single network of speed, divided, limited-access toll roads connects major cities and are operated by toll-collecting enterprises
. New and used cars are inexpensive. Car ownership fees and fuel levies are used to promote energy-efficiency.
Dozens of Japanese railway companies compete in regional and local passenger transportation markets; for instance, 7 JR enterprises, Kintetsu Corporation, Seibu Railway
, and Keio Corporation. Often, strategies of these enterprises contain real estate
or department stores next to stations
. Some 250 high-speed Shinkansen
trains connect major cities. All trains are known for punctuality.
There are 176 airports and flying is a popular way to travel between cities. The largest domestic airport, Tokyo International Airport
, is Asia's busiest airport
. The largest international gateways are Narita International Airport
(Tokyo area), Kansai International Airport
(Osaka/Kobe/Kyoto area), and Chūbu Centrair International Airport
(Nagoya area). The largest ports include Nagoya Port
.
Given its heavy dependence on imported energy, Japan has aimed to diversify its sources. Since the oil shocks of the 1970s, Japan has reduced dependence on petroleum as a source of energy from more than 75% in 1973 to about 57% at present. Other important energy sources are coal, liquefied natural gas, nuclear power, and hydropower. Demand for oil is also dampened by higher government taxes on automobile engines over 2000 cc, as well as on gasoline itself, currently 54 yen per liter sold retail. Kerosene is also used extensively for home heating in portable heaters, especially farther north. Many taxi companies run their fleets on liquefied gas with tanks in the car trunks. A recent success towards greater fuel economy
was the introduction of mass-produced Hybrid vehicle
s. Former Prime Minister Shinzo Abe, who was working on Japan's economic revival, signed a treaty with Saudi Arabia
and UAE about the rising prices of oil.
For purchasing power parity comparisons, the US Dollar is exchanged at ￥110.784 in 2010.
Japan's service sector accounts for about three-quarters of its total economic output. Banking, insurance, real estate, retailing, transportation, and telecommunications are all major industries such as Mitsubishi UFJ, Mizuho
, NTT
, TEPCO
, Nomura
, Mitsubishi Estate
, Tokio Marine, Mitsui Sumitomo, JR East
, Seven & I
, and Japan Airlines
counting as one of the largest companies in the world. The Koizumi
government set Japan Post
, one of the country's largest providers of savings and insurance services for privatization by 2014. The six major keiretsu
s are the Mitsubishi
, Sumitomo, Fuyo, Mitsui
, Dai-Ichi Kangyo and Sanwa
Groups. Japan is home to 326 companies from the Forbes Global 2000
or 16.3% (as of 2006).
Japanese manufacturing is very diversified, with a variety of advanced industries that are highly successful.
Industry is concentrated in several regions, in the following order of importance: the Kantō region
surrounding Tokyo, especially the prefectures of Chiba
, Kanagawa
, Saitama
and Tokyo (the Keihin industrial region
); the Tōkai region
, including Aichi
, Gifu
, Mie
, and Shizuoka
prefectures (the Chukyo-Tokai industrial region); Kinki
(Kansai), including Osaka, Kyoto, Kobe, (the Hanshin industrial region
); the southwestern part of Honshū
and northern Shikoku
around the Seto Inland Sea (the Setouchi industrial region); and the northern part of Kyūshū
(Kitakyūshū). In addition, a long narrow belt of industrial centers is found between Tokyo and Fukuoka
, established by particular industries, that have developed as mill towns.
The fields in which Japan enjoys high technological development include consumer electronics
, automobile manufacturing, semiconductor
manufacturing, optical fiber
s, optoelectronics
, optical media, facsimile
and copy machines, and fermentation processes in food
and biochemistry
.
Only 12% of Japan's land is suitable for cultivation. Due to this lack of arable land, a system of terraces is used to farm in small areas. This results in one of the world's highest levels of crop yields per unit area, with an overall agricultural self-sufficiency rate of about 50% on fewer than 56,000 km² (14 million acres) cultivated.
Japan's small agricultural sector, however, is also highly subsidized and protected, with government regulations that favor small-scale cultivation instead of large-scale agriculture as practiced in North America.
Imported rice, the most protected crop, is subject to tariffs of 490% and was restricted to a quota of only 7.2% of average rice consumption from 1968 to 1988. Imports beyond the quota are unrestricted in legal terms, but subject to a 341 yen per kilogram tariff. This tariff is now estimated at 490%, but the rate will soar to a massive 778% under new calculation rules to be introduced as part of the Doha Round
.
Although Japan is usually self-sufficient in rice (except for its use in making rice crackers and processed foods) and wheat, the country must import about 50% of its requirements of other grain and fodder crops and relies on imports for most of its supply of meat. Japan imports large quantities of wheat, sorghum
, and soybean
s, primarily from the United States. Japan is the largest market for EU agricultural exports. Apple
s are also grown, mostly in Tohoku and Hokkaidō
; Pears and Oranges are mainly grown in Shikoku
and in Kyūshū
. Pears and oranges were first introduced by Dutch traders, in Nagasaki in the late 18th century.
Coastal fishing by small boats, set nets, or breeding techniques accounts for about one third of the industry's total production, while offshore fishing by medium-sized boats makes up for more than half the total production. Deep-sea fishing from larger vessels makes up the rest. Among the many species of seafood caught are sardines, skipjack tuna
, crab, shrimp, salmon, pollock
, squid, clams, mackerel
, sea bream, saury
, tuna and Japanese amberjack
. Freshwater fishing takes up about 30% of Japan's fishing industry. Among the species of fish caught in the rivers of Japan are many different types and some freshwater crustaceans.
Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch, prompting some claims that Japan's fishing is leading to depletion in fish stocks such as tuna
. Japan has also sparked controversy by supporting quasi-commercial whaling
.
In July 2006, the unemployment rate in Japan was 4.1%, according to the OECD. At the end of February 2009, it stood at 4.4% http://www.ft.com/cms/s/0/2f7118e2-1d99-11de-9eb3-00144feabdc0.html This seemingly modest rate however understates the situation. According to The Economist, the ratio of job offers to number of applicants has declined to just 0.59, from almost 1 at the start of 2008, while average work hours also declined. Average wages also went down by 2.9% over the 12 months ending in February. In 2008, Japan's labor force
consisted of some 66 million workers—40% of whom were women—and was rapidly shrinking. http://www.prcdc.org/summaries/japan/japan.html
One major long-term concern for the Japanese labor force is a low birthrate. In the first half of 2005, the number of deaths in Japan exceeded the number of births, indicating that the decline in population, initially predicted to start in 2007, had already started. While one countermeasure for a declining birthrate would be to remove barriers to immigration
, the Japanese government has been reluctant to do so.
In 1989, the predominantly public sector union confederation, SOHYO (General Council of Trade Unions of Japan), merged with RENGO (Japanese Private Sector Trade Union Confederation) to form the Japanese Trade Union Confederation. Labor union membership is about 12 million.
2010.
Japan has one of the smallest tax rates in the developed world. After deductions, the majority of workers are free from personal income taxes. Value-added tax rate is only 5%, while corporate tax rates are high.
Shareholder activism is rare despite the fact that the corporate law gives shareholders strong powers over managers. Recently, more shareholders have stood up against managers.
The government's liabilities include the second largest public debt of any nation. Former Prime Minister Naoto Kan
has called the situation 'urgent'. http://www.japantoday.com/category/politics/view/kan-warns-of-greece-like-debt-crisis
Japan's central bank has the second largest foreign-exchange reserves after People's Republic of China.
(根回し) in Japanese culture is an informal process of quietly laying the foundation for some proposed change or project, by talking to the people concerned, gathering support and feedback, and so forth. It is considered an important element in any major change, before any formal steps are taken, and successful nemawashi enables changes to be carried out with the consent of all sides.
Japanese companies are known for management methods such as "The Toyota Way
". Kaizen
(改善, Japanese for "improvement") is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. When applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers. By improving standardized activities and processes, Kaizen aims to eliminate waste (see Lean manufacturing
). Kaizen was first implemented in several Japanese businesses during the country's recovery after World War II, including Toyota, and has since spread to businesses throughout the world. Ironically, Japanese workers work amongst the most hours per day even though kaizen is supposed to improve all aspects of life.
Some companies have powerful enterprise unions and shuntō
.
The Nenko System
or Nenko Joretsu as it is called in Japan, is the Japanese system of promoting an employee in order of his or her proximity to retirement
. The advantage of the system is that it allows older employees to achieve a higher salary level before retirement and that it usually brings more experience to the executive ranks. The disadvantage of the system is that it does not allow new talent to be merged with the experience and those with specialized skills cannot be promoted to the already crowded executive ranks. It also does not guarantee or even attempt to bring the "right person for the right job".
Relationships between government bureaucrats and companies are often cozy. is the institutionalised practice where Japanese senior bureaucrats retire to high-profile positions in the private and public sectors. The practice is increasingly viewed as corrupt and a drag on unfastening the ties between private sector and state which prevent economic and political reforms.
Lifetime employment (shushin koyo) and seniority-based career advancement have been common in the Japanese work environment
.
Recently, Japan has begun to gradually move away from some of these norms.
refers to someone whose income is salary based; particularly those working for corporations. Its frequent use by Japanese corporations, and its prevalence in Japanese manga
and anime has gradually led to its acceptance in English-speaking countries as a noun for a Japanese white-collar
businessman. The word can be found in many books and articles pertaining to Japanese culture. Immediately following World War II, becoming a salaryman was viewed as a gateway to a stable, middle-class lifestyle. In modern use, the term carries associations of long working hours, low prestige in the corporate hierarchy, absence of significant sources of income other than salary, wage slavery
, and karōshi
. The term salaryman refers almost exclusively to males.
An office lady
, often abbreviated OL (Japanese: オーエル Ōeru), is a female office worker in Japan who performs generally pink collar
tasks such as serving tea and secretarial
or clerical work. Like many unmarried Japanese, OLs often live with their parents well into early adulthood. Office ladies are usually full-time
permanent staff, although the jobs they do usually have little opportunity for promotion
, and there is usually the tacit expectation that they leave their jobs once they get married.
(other spellings below) is a Japanese expression for people between the age of 15 and 34 who lack full time employment or are unemployed, excluding homemakers and students. They may also be described as underemployed or freelance workers. These people do not start a career
after high school
or university but instead usually live as parasite singles
with their parents and earn some money with low skilled and low paid jobs. The low income makes it difficult for freeters to start a family, and the lack of qualifications makes it difficult to start a career at a later point in life.
, which can be translated quite literally from Japanese as "death from overwork", is occupational sudden death. The major medical causes of karōshi deaths are heart attack and stroke due to stress.
, (sometimes also translated as corporate bouncers, meeting-men, or corporate blackmailers) are a form of specialized racketeer unique to Japan, and often associated with the yakuza
that extort money from or blackmail companies by threatening to publicly humiliate
companies and their management, usually in their .
is a Japanese term for moneylender, or loan shark
. It is a contraction of the Japanese words for salaryman
and cash. Around 14 million people, or 10% of the Japanese population, have borrowed from a sarakin. In total, there are about 10,000 firms (down from 30,000 a decade ago); however, the top seven firms make up 70% of the market. The value of outstanding loans totals $100 billion. The biggest sarakin are publicly traded and often allied with big banks.
The first "Western-style" department store in Japan
was Mitsukoshi
, founded in 1904, which has its root as a kimono
store called Echigoya from 1673. When the roots are considered, however, Matsuzakaya
has an even longer history, dated from 1611. The kimono store changed to a department store in 1910. In 1924, Matsuzakaya store in Ginza
allowed street shoes to be worn indoors, something innovative at the time. http://www.matsuzakaya.co.jp/corporate/history/honshi/index.shtml These former kimono shop department stores dominated the market in its earlier history. They sold, or rather displayed, luxurious products, which contributed for their sophisticated atmospheres. Another origin of Japanese department store is that from railway company. There have been many private railway
operators in the nation, and from 1920s, they started to build department stores directly linked to their lines' termini. Seibu
and Hankyu are the typical examples of this type.
From the 1980s onwards, Japanese department stores face fierce competition from supermarkets and convenience stores, gradually losing their presences. Still, depāto are bastions of several aspects of cultural conservatism in the country. Gift certificates for prestigious department stores are frequently given as formal presents in Japan. Department stores in Japan generally offer a wide range of services and can include foreign exchange
, travel reservations, ticket sales for local concerts and other events.
. The prototypical keiretsu are those which appeared in Japan during the "economic miracle
" following World War II. Before Japan's surrender, Japanese industry was controlled by large family-controlled vertical monopolies called zaibatsu
. The Allies
dismantled the zaibatsu in the late 1940s, but the companies formed from the dismantling of the zaibatsu were reintegrated. The dispersed corporations were re-interlinked through share purchases to form horizontally-integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making the alliances vertically integrated as well. In this period, official government policy promoted the creation of robust trade corporations which could withstand heavy pressures from intensified world trade competition.
The major keiretsu were each centered around one bank, which lent money to the keiretsu's member companies and held equity positions in the companies. Each central bank had great control over the companies in the keiretsu and acted as a monitoring entity and as an emergency bail-out entity. One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no entities could challenge the power of the banks.
There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company (for example all factors of production of a certain product will be connected), while a horizontal keiretsu shows relationships between entities and industries, normally centered around a bank and trading company. Both are complexly woven together and self-sustain each other.
The Japanese recession in the 1990s had profound effects on the keiretsu. Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had the effect of blurring the lines between the keiretsu: Sumitomo Bank and Mitsui
Bank, for instance, became Sumitomo Mitsui Banking Corporation
in 2001, while Sanwa Bank (the banker for the Hankyu-Toho Group) became part of Bank of Tokyo-Mitsubishi UFJ. Additionally, many companies from outside the keiretsu system, such as Sony
, began outperforming their counterparts within the system.
Generally, these causes gave rise to a strong notion in the business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While the keiretsu still exist, they are not as centralized or integrated as they were before the 1990s. This, in turn, has led to a growing corporate acquisition industry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as rising derivative litigation by more independent shareholders.
administration, which held office until 2006, enacted or attempted to pass (sometimes with failure) major privatization
and foreign-investment laws intended to help stimulate Japan's economy. Although the effectiveness of these laws is still ambiguous, the economy has begun to respond, but Japan's aging population
is expected to place further strain on growth in the near future.
Keynesian economists tend to claim that Japan's economy is far stronger than generally believed. Some mainstream economists acknowledge that Japan, which unlike most developed countries has maintained its industrial base, and has vast capital reserves, currently has a strong economic outlook.
The privatization of Japan Post
, the Japanese postal system which also runs insurance and deposit-taking businesses, is a major issue. A political battle over privatization caused a political stalemate in August 2005, and ultimately led to the dissolution of the Japanese House of Representatives
. The Postal Savings deposits, which have until now been used to fund public works projects, many of which have had questionable economic value
, stands in excess of $1.9 trillion, and could be a major force in energizing the private sector.
The Japanese monetary authorities' continued desire to depress the price of the Japanese yen
relative to other key specific currencies to protect domestic business from imports may no longer be feasible. The most recent record intervention in 2003 amounted to over 17 trillion yen, more than one third of one trillion US dollars at the time and nearly 3% of Japan's 2003 GDP, being sold in favor of other non-yen denominated assets. However, since 2005, Japan has not directly intervened to buy currency, as yen carry trade has effectively carried out the same task.
Interestingly, international trade has expanded by 60% from 91.4 trillion yen to 142.6 trillion yen from 2001 to 2006. Taking in account the economic participation rate, Japan's GDP per worker has increased steadily.
The Organization for Economic Cooperation and Development downgraded its economic forecasts on March 20, 2008 for the Japan for the first half of 2008. Japan does not have room to ease fiscal or monetary policy, the 30-nation group warned. For Japan, the OECD said the pace of underlying growth appears to be softening despite support from buoyant neighboring Asian economies. The organization expects first-quarter GDP to be up 0.3 percent and predicts a rise of 0.2 in the second quarter.
On November 17, 2008, Japanese government officials announced that the economy was in a recession
. It was reported that Japan's economy contracted at an annual pace of 1.8% in the third quarter of 2008. It is forecasted to have shrunk 0.8% through the fiscal year that ends March 2009. In July 2009 unemployment reached a post-war high of 5.7 per cent, according to the Japan Times. Although the economy is recovering in 2010 levels of public debt remain extremely high, approaching 226% of GDP.
On March 17, 2010 the Bank of Japan
moved to boost yen reserves for 3-month bank loans to 20 trillion yen, although economists such as Richard Koo of the Nomura Research Institute
see this as a move merely to please the Democratic Party of Japan
because, as no money is leaving the financial system, there will be no impact on long term rates in either the ordinary market or the Foreign exchange market
. As a result of this the foreign press and the International Monetary Fund
believe Japan should be doing more to help its economy recover.
In August 2010 the yen hit a 15-year high against the US dollar in nominal terms. In real exchange rate terms, however, the yen was still valued at less than its average since 1990.
On October 2011, the Japanese Ministry of Finance spent around Y5 trillion-Y7.5 trillion ($60 billion-$80 billion) to buy dollars against the yen.The intervention came after the dollar touched a record low of 75.31 yen and pushed the world's main reserve currency up past 79 yen. The dollar, however, slipped below 78 in European trade.
Net international investment position
: 266,223 \ billion (1st)
Industrial Production Growth Rate: 7.5% (2010 est.)
Investment (gross fixed): 20.3% of GDP (2010 est.)
Household income or consumption by percentage share:
Agriculture – Products: rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, fish
Exports – Commodities: machinery and equipment, motor vehicles, semiconductors, chemicals
Imports – Commodities: machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)
Exchange rates:
Japanese Yen per US$1 – 88.67 (2010), 93.57 (2009), 103.58 (2008), 117.99 (2007), 116.18 (2006), 109.690016 (2005), 115.933 (2003), 125.388 (2002), 121.529 (2001), 105.16 (January 2000), 113.91 (1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995)
Electricity:
Electricity – Production by source:
Electricity – Standards:
Oil:
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, a free market economy, is the third largest in the world after the United States
Economy of the United States
The economy of the United States is the world's largest national economy. Its nominal GDP was estimated to be nearly $14.5 trillion in 2010, approximately a quarter of nominal global GDP. The European Union has a larger collective economy, but is not a single nation...
and the People's Republic of China
Economy of the People's Republic of China
The People's Republic of China ranks since 2010 as the world's second largest economy after the United States. It has been the world's fastest-growing major economy, with consistent growth rates of around 10% over the past 30 years. China is also the largest exporter and second largest importer of...
, and ahead of Germany at 4th. According to the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
, the country's per capita GDP（PPP）was at $33,805 or the 24th highest in 2010.
For three decades from 1960, Japan experienced rapid economic growth, which was referred to as the Japanese post-war economic miracle
Japanese post-war economic miracle
The Japanese post-war economic miracle is the name given to the historical phenomenon of Japan's record period of economic growth following World War II, spurred mainly by Japanese economic policy, in particular through the Ministry of International Trade and Industry...
. With average growth rates of 10% in the 1960s, 5% in the 1970s, and 4% in the 1980s, Japan was able to establish and maintain itself as the world's second largest economy from 1968 until 2010, when it was supplanted by the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. However, in the second half of the 1980s, rising stock and real estate prices caused the Japanese economy to overheat
Overheating (economics)
Overheating of an economy occurs when its productive capacity is unable to keep pace with growing aggregate demand. It is generally characterised by an above-trend rate of economic growth, where growth is occurring at an unsustainable rate...
in what was later to be known as the Japanese asset price bubble
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991, in which real estate and stock prices were greatly inflated. The bubble's collapse lasted for more than a decade with stock prices initially bottoming in 2003, although they would descend even further amidst the global crisis in 2008. The...
. The economic bubble
Economic bubble
An economic bubble is "trade in high volumes at prices that are considerably at variance with intrinsic values"...
came to an abrupt end as the Tokyo Stock Exchange
Tokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
crashed in 1990–92 and real estate prices peaked in 1991. Growth in Japan throughout the 1990s at 1.5% was slower than growth in other major developed economies, giving rise to the term Lost Decade
Lost Decade (Japan)
The is the time after the Japanese asset price bubble's collapse within the Japanese economy, which occurred gradually rather than catastrophically...
.
The problems of the 1990s may have been exacerbated by domestic policies intended to wring speculative excesses from the stock and real estate markets. With government efforts to revive economic growth throughout the 1990s unsuccessful, Junichiro Koizumi
Junichiro Koizumi
is a Japanese politician who served as Prime Minister of Japan from 2001 to 2006. He retired from politics when his term in parliament ended.Widely seen as a maverick leader of the Liberal Democratic Party , he became known as an economic reformer, focusing on Japan's government debt and the...
adopted policies to promote exports, effectively raising GDP on an average of 2.1% annually from 2003 to 2007. Subsequently, the global financial crisis and a collapse in domestic demand saw the economy shrink 1.2% in 2008 and 5.0% in 2009. Japan has the world's highest gross sovereign debt
Government debt
Government debt is money owed by a central government. In the US, "government debt" may also refer to the debt of a municipal or local government...
amounting at 225% of GDP or US$10.55 trillion.
A mountainous, volcanic island country, Japan has inadequate natural resources
Natural Resources
Natural Resources is a soul album released by Motown girl group Martha Reeves and the Vandellas in 1970 on the Gordy label. The album is significant for the Vietnam War ballad "I Should Be Proud" and the slow jam, "Love Guess Who"...
to support its growing economy and large population. Although many kinds of minerals were extracted throughout the country, most mineral resources had to be imported in the postwar era. Local deposits of metal-bearing ores were difficult to process because they were low grade. The nation's large and varied forest resources, which covered 70 percent of the country in the late 1980s, were not utilized extensively. Because of political decisions on local, prefectural, and nation levels, Japan decided not to exploit its forest resources for economic gain. Domestic sources only supplied between 25 and 30 percent of the nation's timber needs. Agriculture and fishing were the best developed resources, but only through years of painstaking investment and toil. The nation therefore built up the manufacturing and processing industries to convert raw materials imported from abroad. This strategy of economic development necessitated the establishment of a strong economic infrastructure to provide the needed energy, transportation, communications, and technological know-how.
Deposits of gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
, magnesium
Magnesium
Magnesium is a chemical element with the symbol Mg, atomic number 12, and common oxidation number +2. It is an alkaline earth metal and the eighth most abundant element in the Earth's crust and ninth in the known universe as a whole...
, and silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
meet current industrial demands, but Japan is dependent on foreign sources for many of the minerals essential to modern industry. Iron ore, copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
, bauxite
Bauxite
Bauxite is an aluminium ore and is the main source of aluminium. This form of rock consists mostly of the minerals gibbsite Al3, boehmite γ-AlO, and diaspore α-AlO, in a mixture with the two iron oxides goethite and hematite, the clay mineral kaolinite, and small amounts of anatase TiO2...
, and alumina must be imported, as well as many forest products.
In 2010 GDP Growth in the final three months was -2.9% but total GDP Growth for 2010 was 4.0%, one of the highest growth rates for about 20 years. But Japan's economy was disrupted in March 2011 due to the earthquake and the effect of the tsunami
2011 Tōhoku earthquake and tsunami
The 2011 earthquake off the Pacific coast of Tohoku, also known as the 2011 Tohoku earthquake, or the Great East Japan Earthquake, was a magnitude 9.0 undersea megathrust earthquake off the coast of Japan that occurred at 14:46 JST on Friday, 11 March 2011, with the epicenter approximately east...
. GDP contracted by 3.5% in Q1 of 2011. As Japan's economy has suffered two quarterly contractions in a row, Japan reentered recession. In 2008-09 the economy had contracted 6.4%. However, output is expected to bounce back in the second half of 2011, as supply constraints ease and reconstruction accelerates. From 1992 up until now Japan has had economic problems with an average GDP growth of 1%-2% growth. 2011 GDP is expected to Contract 0.7%, 2012 GDP Growth is expected to be at 2.9%, according to the OECD.
Economic history
Economic history of Japan
The economic history of Japan is one of the most studied for its spectacular growth after the Meiji Restoration when it became the first non-European Power and after the Second World War when the island nation rose to become the world's second largest economy....
is one of the most studied economies for its spectacular growth in three different periods. First was the foundation of Edo
Edo
, also romanized as Yedo or Yeddo, is the former name of the Japanese capital Tokyo, and was the seat of power for the Tokugawa shogunate which ruled Japan from 1603 to 1868...
(in 1603) to whole inland economical developments, second was the Meiji Restoration
Meiji Restoration
The , also known as the Meiji Ishin, Revolution, Reform or Renewal, was a chain of events that restored imperial rule to Japan in 1868...
(in 1868) to be the first non European power, third was after the defeat of World War II
Surrender of Japan
The surrender of Japan in 1945 brought hostilities of World War II to a close. By the end of July 1945, the Imperial Japanese Navy was incapable of conducting operations and an Allied invasion of Japan was imminent...
(in 1945) when the island nation rose to become the world's second largest economy.
First contacts with Europe (16th century)
Japan was considered as a country immensely rich in precious metals, mainly owing to Marco PoloMarco Polo
Marco Polo was a Venetian merchant traveler from the Venetian Republic whose travels are recorded in Il Milione, a book which did much to introduce Europeans to Central Asia and China. He learned about trading whilst his father and uncle, Niccolò and Maffeo, travelled through Asia and apparently...
's accounts of gilded temples and palaces, but also due to the relative abundance of surface ores characteristic of a massive huge volcanic country, before large-scale deep-mining became possible in Industrial times. Japan was to become a major exporter of copper and silver during the period.
Renaissance
Renaissance
The Renaissance was a cultural movement that spanned roughly the 14th to the 17th century, beginning in Italy in the Late Middle Ages and later spreading to the rest of Europe. The term is also used more loosely to refer to the historical era, but since the changes of the Renaissance were not...
Japan was also perceived as a sophisticated feudal society with a high culture and a strong pre-industrial technology. It was densely populated and urbanized. Prominent European observers of the time seemed to agree that the Japanese "excel not only all the other Oriental peoples, they surpass the Europeans as well" (Alessandro Valignano
Alessandro Valignano
Alessandro Valignano, , was a Jesuit missionary born in Chieti, back then part of the Kingdom of Naples, who helped supervise the introduction of Catholicism to the Far East, and especially to Japan....
, 1584, "Historia del Principo y Progresso de la Compania de Jesus en las Indias Orientales).
Early European visitors were amazed by the quality of Japanese craftsmanship and metalsmithing. This stems from the fact that Japan itself is rather poor in natural resources found commonly in Europe, especially iron. Thus, the Japanese were famously frugal with their consumable resources; what little they had they used with expert skill.
The cargo of the first Portuguese ships (usually about 4 smaller-sized ships every year) arriving in Japan almost entirely consisted of Chinese goods (silk, porcelain). The Japanese were very much looking forward to acquiring such goods, but had been prohibited from any contacts with the Emperor of China
Emperor of China
The Emperor of China refers to any sovereign of Imperial China reigning between the founding of Qin Dynasty of China, united by the King of Qin in 221 BCE, and the fall of Yuan Shikai's Empire of China in 1916. When referred to as the Son of Heaven , a title that predates the Qin unification, the...
, as a punishment for Wakō
Wokou
Wokou , which literally translates as "Japanese pirates" in English, were pirates of varying origins who raided the coastlines of China and Korea from the 13th century onwards...
pirate raids. The Portuguese (who were called Nanban, lit. Southern Barbarians) therefore found the opportunity to act as intermediaries in Asian trade.
Edo period (1603–1868)
The beginning of the Edo periodEdo period
The , or , is a division of Japanese history which was ruled by the shoguns of the Tokugawa family, running from 1603 to 1868. The political entity of this period was the Tokugawa shogunate....
coincides with the last decades of the Nanban trade period, during which intense interaction with European powers, on the economic and religious plane, took place. It is at the beginning of the Edo period that Japan built her first ocean-going Western-style warships, such as the San Juan Bautista
Japanese warship San Juan Bautista
San Juan Bautista was one of Japan's first Japanese-built Western-style sail warships. She crossed the Pacific in 1614. She was of the Spanish galleon type, known in Japan as Nanban-Sen San Juan Bautista (“St. John the Baptist”) (originally called Date Maru, 伊達丸 in Japanese) was one of Japan's...
, a 500-ton galleon
Galleon
A galleon was a large, multi-decked sailing ship used primarily by European states from the 16th to 18th centuries. Whether used for war or commerce, they were generally armed with the demi-culverin type of cannon.-Etymology:...
-type ship that transported a Japanese embassy headed by Hasekura Tsunenaga
Hasekura Tsunenaga
Hasekura Rokuemon Tsunenaga or was a Japanese samurai and retainer of Date Masamune, the daimyo of Sendai....
to the Americas, which then continued to Europe. Also during that period, the bakufu commissioned around 350 Red Seal Ships
Red seal ships
were Japanese armed merchant sailing ships bound for Southeast Asian ports with a red-sealed patent issued by the early Tokugawa shogunate in the first half of the 17th century...
, three-masted and armed trade ships, for intra-Asian commerce. Japanese adventurers, such as Yamada Nagamasa
Yamada Nagamasa
was a Japanese adventurer who gained considerable influence in Ayutthaya kingdom at the beginning of the 17th century and became the governor of the Nakhon Si Thammarat in southern Thailand....
, were active throughout Asia.
In order to eradicate the influence of Christianization
Christianization
The historical phenomenon of Christianization is the conversion of individuals to Christianity or the conversion of entire peoples at once...
, Japan entered in a period of isolation called sakoku
Sakoku
was the foreign relations policy of Japan under which no foreigner could enter nor could any Japanese leave the country on penalty of death. The policy was enacted by the Tokugawa shogunate under Tokugawa Iemitsu through a number of edicts and policies from 1633–39 and remained in effect until...
, during which its economy enjoyed stability and mild progress.
Economic development during the Edo period included urbanization
Urbanization
Urbanization, urbanisation or urban drift is the physical growth of urban areas as a result of global change. The United Nations projected that half of the world's population would live in urban areas at the end of 2008....
, increased shipping of commodities, a significant expansion of domestic and, initially, foreign commerce
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
, and a diffusion of trade and handicraft
Handicraft
Handicraft, more precisely expressed as artisanic handicraft, sometimes also called artisanry, is a type of work where useful and decorative devices are made completely by hand or by using only simple tools. It is a traditional main sector of craft. Usually the term is applied to traditional means...
industries. The construction
Construction
In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking...
trades flourished, along with banking facilities and merchant
Merchant
A merchant is a businessperson who trades in commodities that were produced by others, in order to earn a profit.Merchants can be one of two types:# A wholesale merchant operates in the chain between producer and retail merchant...
associations. Increasingly, han authorities oversaw the rising agricultural
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
production and the spread of rural handicrafts.
By the mid-eighteenth century, Edo had a population of more than 1 million and Osaka
Osaka
is a city in the Kansai region of Japan's main island of Honshu, a designated city under the Local Autonomy Law, the capital city of Osaka Prefecture and also the biggest part of Keihanshin area, which is represented by three major cities of Japan, Kyoto, Osaka and Kobe...
and Kyoto
Kyoto
is a city in the central part of the island of Honshū, Japan. It has a population close to 1.5 million. Formerly the imperial capital of Japan, it is now the capital of Kyoto Prefecture, as well as a major part of the Osaka-Kobe-Kyoto metropolitan area.-History:...
each had more than 400,000 inhabitants. Many other castle town
Castle town
A castle town is a settlement built adjacent to or surrounding a castle. Castle towns are common in Medieval Europe. Good example include small towns like Alnwick and Arundel, which are still dominated by their castles...
s grew as well. Osaka and Kyoto became busy trading and handicraft production centers, while Edo was the center for the supply of food and essential urban consumer goods.
Rice was the base of the economy, as the daimyo collected the taxes from the peasants in the form of rice. Taxes were high, about 40% of the harvest. The rice was sold at the fudasashi market in Edo
Edo
, also romanized as Yedo or Yeddo, is the former name of the Japanese capital Tokyo, and was the seat of power for the Tokugawa shogunate which ruled Japan from 1603 to 1868...
. To raise money, the daimyo used forward contract
Forward contract
In finance, a forward contract or simply a forward is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed today. This is in contrast to a spot contract, which is an agreement to buy or sell an asset today. It costs nothing to enter a...
s to sell rice that was not even harvested yet. These contracts were similar to modern futures trading.
During the period, Japan progressively studied Western sciences and techniques (called rangaku
Rangaku
Rangaku is a body of knowledge developed by Japan through its contacts with the Dutch enclave of Dejima, which allowed Japan to keep abreast of Western technology and medicine in the period when the country was closed to foreigners, 1641–1853, because of the Tokugawa shogunate’s policy of national...
, literally "Dutch studies") through the information and books received through the Dutch traders in Dejima
Dejima
was a small fan-shaped artificial island built in the bay of Nagasaki in 1634. This island, which was formed by digging a canal through a small peninsula, remained as the single place of direct trade and exchange between Japan and the outside world during the Edo period. Dejima was built to...
. The main areas that were studied included geography, medicine, natural sciences, astronomy, art, languages, physical sciences such as the study of electrical phenomena, and mechanical sciences as exemplified by the development of Japanese clockwatches, or wadokei, inspired from Western techniques.
Prewar period (1868–1945)
Since the mid-19th century, after the Meiji restoration, the country was opened up to Western commerce and influence and Japan has gone through two periods of economic development. The first began in earnest in 1868 and extended through to World War II; the second began in 1945 and continued into the mid-1980s.Economic developments of the prewar period
Empire of Japan
The Empire of Japan is the name of the state of Japan that existed from the Meiji Restoration on 3 January 1868 to the enactment of the post-World War II Constitution of...
began with the “Rich State and Strong Army Policy
Fukoku kyohei
, originally a phrase from the ancient Chinese historical work on the Warring States Period, Zhan Guo Ce , was Japan's national slogan during the Meiji Era, replacing sonnō jōi ....
” by the Meiji government. During the Meiji period
Meiji period
The , also known as the Meiji era, is a Japanese era which extended from September 1868 through July 1912. This period represents the first half of the Empire of Japan.- Meiji Restoration and the emperor :...
(1868–1912), leaders inaugurated a new Western-based education system for all young people, sent thousands of students to the United States and Europe, and hired more than 3,000 Westerners to teach modern science, mathematics, technology, and foreign languages in Japan (Oyatoi gaikokujin). The government also built railroads, improved road, and inaugurated a land reform program to prepare the country for further development.
To promote industrialization, the government decided that, while it should help private business to allocate resources and to plan, the public sector was best equipped to stimulate economic growth. The greatest role of government was to help provide the economic conditions in which business could flourish. In short, government was to be the guide and business the producer. In the early Meiji period, the government built factories and shipyards that were sold to entrepreneurs at a fraction of their value. Many of these businesses grew rapidly into the larger conglomerates
Conglomerate (company)
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure , usually involving a parent company and several subsidiaries. Often, a conglomerate is a multi-industry company...
. Government emerged as chief promoter of private enterprise, enacting a series of probusiness policies.
In the mid 1930s, the Japanese nominal wage rates were 10 times less than the one of the U.S (based on mid-1930s exchange rates), while the price level is estimated to have been about 44% the one of the U.S.
Postwar period (1945–present)
From the 1960s to the 1980s, overall real economic growth has been called a "miracle"
Japanese post-war economic miracle
The Japanese post-war economic miracle is the name given to the historical phenomenon of Japan's record period of economic growth following World War II, spurred mainly by Japanese economic policy, in particular through the Ministry of International Trade and Industry...
: a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s. By the late Eighties, Japan had moved from being a low-wage to a high-wage economy.
Growth slowed markedly in the late 1990s also termed the Lost Decade
Lost Decade (Japan)
The is the time after the Japanese asset price bubble's collapse within the Japanese economy, which occurred gradually rather than catastrophically...
, largely due to the Bank of Japan's failure to cut interest rates quickly enough to counter after-effects of over-investment during the late 1980s
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991, in which real estate and stock prices were greatly inflated. The bubble's collapse lasted for more than a decade with stock prices initially bottoming in 2003, although they would descend even further amidst the global crisis in 2008. The...
. Some economists believe that because the Bank of Japan failed to cut rates quickly enough, Japan entered a liquidity trap
Liquidity trap
A liquidity trap is a situation described in Keynesian economics in which injections of cash into an economy by a central bank fail to lower interest rates and hence to stimulate economic growth. A liquidity trap is caused when people hoard cash because they expect an adverse event such as...
. Therefore, to keep its economy afloat, Japan ran massive budget deficits (added trillions in Yen to Japanese financial system) to finance large public works
Public works
Public works are a broad category of projects, financed and constructed by the government, for recreational, employment, and health and safety uses in the greater community...
programs.
By 1998, Japan's public works projects still could not stimulate demand enough to end the economy's stagnation. In desperation, the Japanese government undertook "structural reform" policies intended to wring speculative excesses from the stock and real estate markets. Unfortunately, these policies led Japan into deflation on numerous occasions between 1999 and 2004. In his 1998 paper, Japan's Trap, Princeton economics professor Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
argued that based on a number of models, Japan had a new option. Krugman's plan called for a rise in inflation expectations to, in effect, cut long-term interest rates and promote spending.
Japan used another technique, somewhat based on Krugman's, called Quantitative easing
Quantitative easing
Quantitative easing is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy...
. As opposed to flooding the money supply with newly printed money, the Bank of Japan expanded the money supply internally to raise expectations of inflation. Initially, the policy failed to induce any growth, but it eventually began to affect inflationary expectations. By late 2005, the economy finally began what seems to be a sustained recovery. GDP growth for that year was 2.8%, with an annualized fourth quarter expansion of 5.5%, surpassing the growth rates of the US and European Union
Economy of the European Union
The economy of the European Union generates a GDP of over €12,279.033 billion according to the International Monetary Fund , making it the largest economy in the world...
during the same period. Unlike previous recovery trends, domestic consumption has been the dominant factor of growth.
Despite having interest rates down near zero for a long period of time, the Quantitative easing strategy did not succeed in stopping price deflation. This led some economists, such as Paul Krugman, and some Japanese politicians, to speak of deliberately causing hyperinflation
Hyperinflation
In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...
. In July 2006, the zero-rate policy was ended. In 2008, the Japanese Central Bank still has the lowest interest rates in the developed world, deflation has still not been eliminated and the Nikkei 225 has fallen over approximately 50% (between June 2007 and December 2008).
The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
has suggested that improvements to bankruptcy law, land transfer law, and tax laws will aid Japan's economy.
In recent years, Japan has been the top export market for almost 15 trading nations worldwide.
Infrastructure
As of 2005, one half of energy in Japan is produced from petroleum, a fifth from coal, and 14% from natural gas. Nuclear power in JapanNuclear power in Japan
Nuclear energy was a national strategic priority in Japan, but there has been concern about the ability of Japan's nuclear plants to withstand seismic activity...
makes a quarter of electricity production and Japan would like to double it in the next decades.
Japan's road spending has been large. The 1.2 million kilometers of paved road are the main means of transportation. Japan has left-hand traffic. A single network of speed, divided, limited-access toll roads connects major cities and are operated by toll-collecting enterprises
Road toll
Road toll is the term used in some countries for the number of deaths caused annually by road accidents.The term is in common and official use in Australia and New Zealand.-Australia:In Australia the road toll is reported at a state level...
. New and used cars are inexpensive. Car ownership fees and fuel levies are used to promote energy-efficiency.
Dozens of Japanese railway companies compete in regional and local passenger transportation markets; for instance, 7 JR enterprises, Kintetsu Corporation, Seibu Railway
Seibu Railway
is a conglomerate based in Tokorozawa, Japan, with principal business areas in railways, tourism and real estate. Seibu Railway's operations are concentrated in northwest Tokyo and Saitama Prefecture; the name "Seibu" is an abbreviation of "west Musashi," referring to the historic name for this area...
, and Keio Corporation. Often, strategies of these enterprises contain real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
or department stores next to stations
Department stores in Japan
Department stores in Japan are referred to as hyakkaten or depāto , an abbreviation of the English term.-History:The first "modern-style" department store in Japan was Mitsukoshi, founded in 1904, which has its root as a kimono store called Echigoya from 1673. When the roots are considered,...
. Some 250 high-speed Shinkansen
Shinkansen
The , also known as THE BULLET TRAIN, is a network of high-speed railway lines in Japan operated by four Japan Railways Group companies. Starting with the Tōkaidō Shinkansen in 1964, the network has expanded to currently consist of of lines with maximum speeds of , of Mini-shinkansen with a...
trains connect major cities. All trains are known for punctuality.
There are 176 airports and flying is a popular way to travel between cities. The largest domestic airport, Tokyo International Airport
Tokyo International Airport
, commonly known as , is one of the two primary airports that serve the Greater Tokyo Area in Japan. It is located in Ōta, Tokyo, south of Tokyo Station....
, is Asia's busiest airport
World's busiest airports by passenger traffic
The world's busiest airports by passenger traffic are measured by number of total passengers . One passenger is described as someone who arrives in, departs from, or transfers through the airport on a given day...
. The largest international gateways are Narita International Airport
Narita International Airport
is an international airport serving the Greater Tokyo Area of Japan. It is located east of Tokyo Station and east-southeast of Narita Station in the city of Narita, and the adjacent town of Shibayama....
(Tokyo area), Kansai International Airport
Kansai International Airport
is an international airport located on an artificial island in the middle of Osaka Bay, southwest of Ōsaka Station, located within three municipalities, including Izumisano , Sennan , and Tajiri , in Osaka Prefecture, Japan. The airport is off the Honshu shore. The airport serves as an...
(Osaka/Kobe/Kyoto area), and Chūbu Centrair International Airport
Chubu Centrair International Airport
is an airport on an artificial island in Ise Bay, Tokoname City in Aichi Prefecture, south of Nagoya in central Japan.Centrair is classified as a first class airport and is the main international gateway for the Chūbu region of Japan...
(Nagoya area). The largest ports include Nagoya Port
Nagoya Port
The , located in Ise Bay, is the largest and busiest trading port in Japan, accounting for about 10% of the total trade value of Japan. Notably, this port is the largest exporter of cars in Japan and where the Toyota Motor Corporation exports most of its cars...
.
Given its heavy dependence on imported energy, Japan has aimed to diversify its sources. Since the oil shocks of the 1970s, Japan has reduced dependence on petroleum as a source of energy from more than 75% in 1973 to about 57% at present. Other important energy sources are coal, liquefied natural gas, nuclear power, and hydropower. Demand for oil is also dampened by higher government taxes on automobile engines over 2000 cc, as well as on gasoline itself, currently 54 yen per liter sold retail. Kerosene is also used extensively for home heating in portable heaters, especially farther north. Many taxi companies run their fleets on liquefied gas with tanks in the car trunks. A recent success towards greater fuel economy
Fuel economy in automobiles
Fuel usage in automobiles refers to the fuel efficiency relationship between distance traveled by an automobile and the amount of fuel consumed....
was the introduction of mass-produced Hybrid vehicle
Hybrid vehicle
A hybrid vehicle is a vehicle that uses two or more distinct power sources to move the vehicle. The term most commonly refers to hybrid electric vehicles , which combine an internal combustion engine and one or more electric motors.-Power:...
s. Former Prime Minister Shinzo Abe, who was working on Japan's economic revival, signed a treaty with Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
and UAE about the rising prices of oil.
Macro-economic trend
This is a chart of trend of gross domestic product of Japan at market prices estimated by the International Monetary Fund with figures in millions of Japanese Yen. See also| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
Nominal Per Capita GDP (as % of USA) |
PPP Capita GDP (as % of USA) |
| 1955 | 8,369,500 | ￥360.00 | 10.31 | - | |
| 1960 | 16,009,700 | ￥360.00 | 16.22 | - | |
| 1965 | 32,866,000 | ￥360.00 | 24.95 | - | |
| 1970 | 73,344,900 | ￥360.00 | 38.56 | - | |
| 1975 | 148,327,100 | ￥297.26 | 59.00 | - | |
| 1980 | 240,707,315 | ￥225.82 | 75 | 74.04 | 68.30 |
| 1985 | 323,541,300 | ￥236.79 | 86 | 63.44 | 72.78 |
| 1990 | 440,124,900 | ￥144.15 | 92 | 105.82 | 81.27 |
| 1995 | 493,271,700 | ￥122.78 | 98 | 151.55 | 80.73 |
| 2000 | 501,068,100 | ￥107.73 | 100 | 105.85 | 71.87 |
| 2005 | 502,905,400 | ￥110.01 | 97 | 85.04 | 71.03 |
| 2010 | 477,327,134 | ￥88.54 | 98 | 89.8 | 71.49 |
For purchasing power parity comparisons, the US Dollar is exchanged at ￥110.784 in 2010.
Services
Mizuho Financial Group
, abbreviated as MHFG, or simply called Mizuho is a banking holding company headquartered in the Ōtemachi district of Chiyoda, Tokyo, Japan...
, NTT
Nippon Telegraph and Telephone
, commonly known as NTT, is a Japanese telecommunications company headquartered in Tokyo, Japan. Ranked the 31st in Fortune Global 500, NTT is the largest telecommunications company in Asia, and the second-largest in the world in terms of revenue....
, TEPCO
The Tokyo Electric Power Company
, also known as or TEPCO, is an electric utility servicing Japan's Kantō region, Yamanashi Prefecture, and the eastern portion of Shizuoka Prefecture. This area includes Tokyo...
, Nomura
Nomura Holdings
Nomura Holdings, Inc. is a Japanese financial holding company, and a principal member of the Nomura Group.In October 2008 the company acquired Lehman Brothers Holdings's investment banking and equities unit in Asia and Europe and kept on most of its employees. Nomura paid $225 million for the...
, Mitsubishi Estate
Mitsubishi Estate Co.
is a Japanese corporation. It is one of the core Mitsubishi companies. Mitsubishi Estate has its headquarters in the Otemachi Building in Ōtemachi, Chiyoda, Tokyo.-Business:...
, Tokio Marine, Mitsui Sumitomo, JR East
East Japan Railway Company
is the largest passenger railway company in the world and one of the seven Japan Railways Group companies. The company name is officially abbreviated as JR East in English, and as in Japanese. The company's headquarters are in Yoyogi, Shibuya, Tokyo....
, Seven & I
Seven & I Holdings Co.
is a diversified retail group headquartered in Chiyoda, Tokyo, Japan. Founded originally in 1920 as Ito-Yokado, Seven & I is now the fifth largest retailer in the world, with 35,000 stores in approximately 100 countries.-History:...
, and Japan Airlines
Japan Airlines
is an airline headquartered in Shinagawa, Tokyo, Japan. It is the flag carrier of Japan and its main hubs are Tokyo's Narita International Airport and Tokyo International Airport , as well as Nagoya's Chūbu Centrair International Airport and Osaka's Kansai International Airport...
counting as one of the largest companies in the world. The Koizumi
Junichiro Koizumi
is a Japanese politician who served as Prime Minister of Japan from 2001 to 2006. He retired from politics when his term in parliament ended.Widely seen as a maverick leader of the Liberal Democratic Party , he became known as an economic reformer, focusing on Japan's government debt and the...
government set Japan Post
Japan Post
was a government-owned corporation in Japan, that existed from 2003–2007, offering postal and package delivery services, banking services, and life insurance. It had over 400,000 employees and ran 24,700 post offices throughout Japan and was the nation's largest employer. One third of all Japanese...
, one of the country's largest providers of savings and insurance services for privatization by 2014. The six major keiretsu
Keiretsu
A is a set of companies with interlocking business relationships and shareholdings. It is a type of business group. The keiretsu has maintained dominance over the Japanese economy for the greater half of the twentieth century....
s are the Mitsubishi
Mitsubishi
The Mitsubishi Group , Mitsubishi Group of Companies, or Mitsubishi Companies is a Japanese multinational conglomerate company that consists of a range of autonomous businesses which share the Mitsubishi brand, trademark and legacy...
, Sumitomo, Fuyo, Mitsui
Mitsui
is one of the largest corporate conglomerates in Japan and one of the largest publicly traded companies in the world.-History:Founded by Mitsui Takatoshi , who was the fourth son of a shopkeeper in Matsusaka, in what is now today's Mie prefecture...
, Dai-Ichi Kangyo and Sanwa
Sanwa Group
Sanwa Group was a keiretsu, or business group, based in Osaka from World War II to the early 1990s in Japanese asset price bubble, one of the main keiretsu...
Groups. Japan is home to 326 companies from the Forbes Global 2000
Forbes Global 2000
The Forbes Global 2000 is an annual ranking of the top 2000 public companies in the world by Forbes magazine. The ranking is based on a mix of four metrics: sales, profit, assets and market value...
or 16.3% (as of 2006).
Industry
Industry is concentrated in several regions, in the following order of importance: the Kantō region
Kanto region
The is a geographical area of Honshu, the largest island of Japan. The region includes the Greater Tokyo Area and encompasses seven prefectures: Gunma, Tochigi, Ibaraki, Saitama, Tokyo, Chiba, and Kanagawa. Within its boundaries, slightly more than 40 percent of the land area is the Kantō Plain....
surrounding Tokyo, especially the prefectures of Chiba
Chiba Prefecture
is a prefecture of Japan located in the Kantō region and the Greater Tokyo Area. Its capital is Chiba City.- History :Chiba Prefecture was established on June 15, 1873 with the merger of Kisarazu Prefecture and Inba Prefecture...
, Kanagawa
Kanagawa Prefecture
is a prefecture located in the southern Kantō region of Japan. The capital is Yokohama. Kanagawa is part of the Greater Tokyo Area.-History:The prefecture has some archaeological sites going back to the Jōmon period...
, Saitama
Saitama Prefecture
is a prefecture of Japan located in the Kantō region of the island of Honshu. The capital is the city of Saitama.This prefecture is part of the Greater Tokyo Area, and most of Saitama's cities can be described as suburbs of Tokyo, to which a large amount of residents commute each day.- History...
and Tokyo (the Keihin industrial region
Keihin region
consists of the Japanese cities Tokyo, Kawasaki, and Yokohama. The term is mostly used to describe these cities as one industrial region. It is derived from the second character of Tōkyō, , which can be read kyō or kei, and the second character of Yokohama, , which can be read hin or hama.The...
); the Tōkai region
Tokai region
The is a sub-region of the Chūbu region in Japan that runs along the Pacific Ocean. The name means "East sea" and comes from the Tōkaidō, one of the Edo Five Routes...
, including Aichi
Aichi Prefecture
is a prefecture of Japan located in the Chūbu region. The region of Aichi is also known as the Tōkai region. The capital is Nagoya. It is the focus of the Chūkyō Metropolitan Area.- History :...
, Gifu
Gifu Prefecture
is a prefecture located in the Chūbu region of central Japan. Its capital is the city of Gifu.Located in the center of Japan, it has long played an important part as the crossroads of Japan, connecting the east to the west through such routes as the Nakasendō...
, Mie
Mie Prefecture
is a prefecture of Japan which is part of the Kansai regions on Honshū island. The capital is the city of Tsu.- History :Until the Meiji Restoration, Mie prefecture was known as Ise Province and Iga Province....
, and Shizuoka
Shizuoka Prefecture
is a prefecture of Japan located in the Chūbu region on Honshu island. The capital is the city of Shizuoka.- History :Shizuoka prefecture was formed from the former Tōtōmi, Suruga and Izu provinces.The area was the home of the first Tokugawa Shogun...
prefectures (the Chukyo-Tokai industrial region); Kinki
Kansai
The or the lies in the southern-central region of Japan's main island Honshū. The region includes the prefectures of Mie, Nara, Wakayama, Kyoto, Osaka, Hyōgo, and Shiga. Depending on who makes the distinction, Fukui, Tokushima and even Tottori Prefecture are also included...
(Kansai), including Osaka, Kyoto, Kobe, (the Hanshin industrial region
Hanshin Industrial Region
The is one of the largest industrial regions in Japan. Its name comes from the kanji used to write the names of Osaka and Kobe , the two largest cities in the megalopolis.The GDP of this area is $341 billion, one of the world's most productive regions.-Numbers:*Osaka prefecture**Number of...
); the southwestern part of Honshū
Honshu
is the largest island of Japan. The nation's main island, it is south of Hokkaido across the Tsugaru Strait, north of Shikoku across the Inland Sea, and northeast of Kyushu across the Kanmon Strait...
and northern Shikoku
Shikoku
is the smallest and least populous of the four main islands of Japan, located south of Honshū and east of the island of Kyūshū. Its ancient names include Iyo-no-futana-shima , Iyo-shima , and Futana-shima...
around the Seto Inland Sea (the Setouchi industrial region); and the northern part of Kyūshū
Kyushu
is the third largest island of Japan and most southwesterly of its four main islands. Its alternate ancient names include , , and . The historical regional name is referred to Kyushu and its surrounding islands....
(Kitakyūshū). In addition, a long narrow belt of industrial centers is found between Tokyo and Fukuoka
Fukuoka, Fukuoka
is the capital city of Fukuoka Prefecture and is situated on the northern shore of the island of Kyushu in Japan.Voted number 14 in a 2010 poll of the World's Most Livable Cities, Fukuoka is praised for its green spaces in a metropolitan setting. It is the most populous city in Kyushu, followed by...
, established by particular industries, that have developed as mill towns.
The fields in which Japan enjoys high technological development include consumer electronics
Japanese consumer electronics industry
The Japanese consumer electronics industry is one of the most prominent industries in the world and is the world's largest electronics manufacturer by companies such as Sony, Pentax, Casio, Citizen Watches, Hitachi, Mitsubishi Electric, Panasonic, Roland, Sharp, Canon, Epson, Yamaha, Sanyo,...
, automobile manufacturing, semiconductor
Semiconductor
A semiconductor is a material with electrical conductivity due to electron flow intermediate in magnitude between that of a conductor and an insulator. This means a conductivity roughly in the range of 103 to 10−8 siemens per centimeter...
manufacturing, optical fiber
Optical fiber
An optical fiber is a flexible, transparent fiber made of a pure glass not much wider than a human hair. It functions as a waveguide, or "light pipe", to transmit light between the two ends of the fiber. The field of applied science and engineering concerned with the design and application of...
s, optoelectronics
Optoelectronics
Optoelectronics is the study and application of electronic devices that source, detect and control light, usually considered a sub-field of photonics. In this context, light often includes invisible forms of radiation such as gamma rays, X-rays, ultraviolet and infrared, in addition to visible light...
, optical media, facsimile
Fax
Fax , sometimes called telecopying, is the telephonic transmission of scanned printed material , normally to a telephone number connected to a printer or other output device...
and copy machines, and fermentation processes in food
Fermentation (food)
Fermentation in food processing typically is the conversion of carbohydrates to alcohols and carbon dioxide or organic acids using yeasts, bacteria, or a combination thereof, under anaerobic conditions. Fermentation in simple terms is the chemical conversion of sugars into ethanol...
and biochemistry
Fermentation (biochemistry)
Fermentation is the process of extracting energy from the oxidation of organic compounds, such as carbohydrates, using an endogenous electron acceptor, which is usually an organic compound. In contrast, respiration is where electrons are donated to an exogenous electron acceptor, such as oxygen,...
.
Agriculture
Japan's small agricultural sector, however, is also highly subsidized and protected, with government regulations that favor small-scale cultivation instead of large-scale agriculture as practiced in North America.
Imported rice, the most protected crop, is subject to tariffs of 490% and was restricted to a quota of only 7.2% of average rice consumption from 1968 to 1988. Imports beyond the quota are unrestricted in legal terms, but subject to a 341 yen per kilogram tariff. This tariff is now estimated at 490%, but the rate will soar to a massive 778% under new calculation rules to be introduced as part of the Doha Round
Doha round
The Doha Development Round or Doha Development Agenda is the current trade-negotiation round of the World Trade Organization which commenced in November 2001. Its objective is to lower trade barriers around the world, which will help facilitate the increase of global trade...
.
Although Japan is usually self-sufficient in rice (except for its use in making rice crackers and processed foods) and wheat, the country must import about 50% of its requirements of other grain and fodder crops and relies on imports for most of its supply of meat. Japan imports large quantities of wheat, sorghum
Sorghum
Sorghum is a genus of numerous species of grasses, one of which is raised for grain and many of which are used as fodder plants either cultivated or as part of pasture. The plants are cultivated in warmer climates worldwide. Species are native to tropical and subtropical regions of all continents...
, and soybean
Soybean
The soybean or soya bean is a species of legume native to East Asia, widely grown for its edible bean which has numerous uses...
s, primarily from the United States. Japan is the largest market for EU agricultural exports. Apple
Apple
The apple is the pomaceous fruit of the apple tree, species Malus domestica in the rose family . It is one of the most widely cultivated tree fruits, and the most widely known of the many members of genus Malus that are used by humans. Apple grow on small, deciduous trees that blossom in the spring...
s are also grown, mostly in Tohoku and Hokkaidō
Hokkaido
, formerly known as Ezo, Yezo, Yeso, or Yesso, is Japan's second largest island; it is also the largest and northernmost of Japan's 47 prefectural-level subdivisions. The Tsugaru Strait separates Hokkaido from Honshu, although the two islands are connected by the underwater railway Seikan Tunnel...
; Pears and Oranges are mainly grown in Shikoku
Shikoku
is the smallest and least populous of the four main islands of Japan, located south of Honshū and east of the island of Kyūshū. Its ancient names include Iyo-no-futana-shima , Iyo-shima , and Futana-shima...
and in Kyūshū
Kyushu
is the third largest island of Japan and most southwesterly of its four main islands. Its alternate ancient names include , , and . The historical regional name is referred to Kyushu and its surrounding islands....
. Pears and oranges were first introduced by Dutch traders, in Nagasaki in the late 18th century.
Fishery
Japan ranked fifth in the world in tonnage of fish caught—11.9 million tons in 1989, up slightly from 11.1 million tons in 1980. After the 1973 energy crisis, deep-sea fishing in Japan declined, with the annual catch in the 1980s averaging 2 million tons. Offshore fisheries accounted for an average of 50 % of the nation's total fish catches in the late 1980s although they experienced repeated ups and downs during that periodCoastal fishing by small boats, set nets, or breeding techniques accounts for about one third of the industry's total production, while offshore fishing by medium-sized boats makes up for more than half the total production. Deep-sea fishing from larger vessels makes up the rest. Among the many species of seafood caught are sardines, skipjack tuna
Skipjack tuna
The skipjack tuna, Katsuwonus pelamis, is a medium-sized perciform fish in the tuna family, Scombridae. It is otherwise known as the aku, arctic bonito, mushmouth, oceanic bonito, striped tuna, or victor fish...
, crab, shrimp, salmon, pollock
Pollock
Pollock is the common name used for either of the two species of marine fish in the Pollachius genus. Both P. pollachius and P. virens are commonly referred to as pollock. Other names for P...
, squid, clams, mackerel
Mackerel
Mackerel is a common name applied to a number of different species of fish, mostly, but not exclusively, from the family Scombridae. They may be found in all tropical and temperate seas. Most live offshore in the oceanic environment but a few, like the Spanish mackerel , enter bays and can be...
, sea bream, saury
Saury
Sauries are fish of the family Scomberesocidae. There are two genera, each containing two species. The name Scomberesocidae is derived from the Greek, skombros = tuna/mackerel, and esox = nursery of salmon....
, tuna and Japanese amberjack
Japanese amberjack
The Japanese amberjack or yellowtail, Seriola quinqueradiata, is a fish in the family Carangidae. It is native to the northwest Pacific, from Japan to Hawaii....
. Freshwater fishing takes up about 30% of Japan's fishing industry. Among the species of fish caught in the rivers of Japan are many different types and some freshwater crustaceans.
Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch, prompting some claims that Japan's fishing is leading to depletion in fish stocks such as tuna
Tuna
Tuna is a salt water fish from the family Scombridae, mostly in the genus Thunnus. Tuna are fast swimmers, and some species are capable of speeds of . Unlike most fish, which have white flesh, the muscle tissue of tuna ranges from pink to dark red. The red coloration derives from myoglobin, an...
. Japan has also sparked controversy by supporting quasi-commercial whaling
Whaling in Japan
Whaling in Japan may have begun as early as the 12th century. During the 20th century, Japan was heavily involved in commercial whaling until the International Whaling Commission moratorium on commercial whaling went into effect in 1986...
.
Labor force
The claimed unemployment rate for June 2009 is 5.2% (5.4% male (up 0.1% from May 2009), 4.9% female (up 0.3% from May 2009)). http://www.bloomberg.co.jp/apps/news?pid=90003007&sid=a2b9qmzxMAcE&refer=jp_economies http://www.bloomberg.com/apps/news?pid=20601068&sid=a90dAL94wEos This is regarded as an under-estimate. Even part-time workers with extremely low hours are classified as employed.In July 2006, the unemployment rate in Japan was 4.1%, according to the OECD. At the end of February 2009, it stood at 4.4% http://www.ft.com/cms/s/0/2f7118e2-1d99-11de-9eb3-00144feabdc0.html This seemingly modest rate however understates the situation. According to The Economist, the ratio of job offers to number of applicants has declined to just 0.59, from almost 1 at the start of 2008, while average work hours also declined. Average wages also went down by 2.9% over the 12 months ending in February. In 2008, Japan's labor force
Labor market of Japan
The labor force in Japan numbered 65,900 thousand people in 2010, which was 59.6% of the population of 15 years old and older, and amongst them, 62,570 thousand people were employed, whereas 3,340 thousand people were unemployed which made the unemployment rate 5.1%...
consisted of some 66 million workers—40% of whom were women—and was rapidly shrinking. http://www.prcdc.org/summaries/japan/japan.html
One major long-term concern for the Japanese labor force is a low birthrate. In the first half of 2005, the number of deaths in Japan exceeded the number of births, indicating that the decline in population, initially predicted to start in 2007, had already started. While one countermeasure for a declining birthrate would be to remove barriers to immigration
Immigration
Immigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...
, the Japanese government has been reluctant to do so.
In 1989, the predominantly public sector union confederation, SOHYO (General Council of Trade Unions of Japan), merged with RENGO (Japanese Private Sector Trade Union Confederation) to form the Japanese Trade Union Confederation. Labor union membership is about 12 million.
Law and government
Japan ranks 15th of 183 countries in the Ease of Doing Business IndexEase of Doing Business Index
The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...
2010.
Japan has one of the smallest tax rates in the developed world. After deductions, the majority of workers are free from personal income taxes. Value-added tax rate is only 5%, while corporate tax rates are high.
Shareholder activism is rare despite the fact that the corporate law gives shareholders strong powers over managers. Recently, more shareholders have stood up against managers.
The government's liabilities include the second largest public debt of any nation. Former Prime Minister Naoto Kan
Naoto Kan
is a Japanese politician, and former Prime Minister of Japan. In June 2010, then-Finance Minister Kan was elected as the leader of the Democratic Party of Japan and designated Prime Minister by the Diet to succeed Yukio Hatoyama. On 26 August 2011, Kan announced his resignation...
has called the situation 'urgent'. http://www.japantoday.com/category/politics/view/kan-warns-of-greece-like-debt-crisis
Japan's central bank has the second largest foreign-exchange reserves after People's Republic of China.
Overview
NemawashiNemawashi
Nemawashi in Japanese means an informal process of quietly laying the foundation for some proposed change or project, by talking to the people concerned, gathering support and feedback, and so forth...
(根回し) in Japanese culture is an informal process of quietly laying the foundation for some proposed change or project, by talking to the people concerned, gathering support and feedback, and so forth. It is considered an important element in any major change, before any formal steps are taken, and successful nemawashi enables changes to be carried out with the consent of all sides.
Japanese companies are known for management methods such as "The Toyota Way
The Toyota Way
The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach and production system. Toyota first summed up its philosophy, values and manufacturing ideals in 2001, calling it “The Toyota Way 2001.” It consists of principles in two key areas:...
". Kaizen
Kaizen
, Japanese for "improvement", or "change for the better" refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, game development, and business management. It has been applied in healthcare, psychotherapy, life-coaching, government,...
(改善, Japanese for "improvement") is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. When applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers. By improving standardized activities and processes, Kaizen aims to eliminate waste (see Lean manufacturing
Lean manufacturing
Lean manufacturing, lean enterprise, or lean production, often simply, "Lean," is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination...
). Kaizen was first implemented in several Japanese businesses during the country's recovery after World War II, including Toyota, and has since spread to businesses throughout the world. Ironically, Japanese workers work amongst the most hours per day even though kaizen is supposed to improve all aspects of life.
Some companies have powerful enterprise unions and shuntō
Shunto
is a Japanese term, usually translated as "spring [wages] offensive", with the word "wages" sometimes replaced with livelihood, labour or similar term. It refers to the annual wage negotiations between the enterprise unions and the employers...
.
The Nenko System
Nenko System
The is the Japanese system of promoting an employee in order of his or her proximity to retirement. The advantage of the system is that it allows older employees to achieve a higher salary level before retirement and that it usually brings more experience to the executive ranks...
or Nenko Joretsu as it is called in Japan, is the Japanese system of promoting an employee in order of his or her proximity to retirement
Retirement
Retirement is the point where a person stops employment completely. A person may also semi-retire by reducing work hours.Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don't allow the person to...
. The advantage of the system is that it allows older employees to achieve a higher salary level before retirement and that it usually brings more experience to the executive ranks. The disadvantage of the system is that it does not allow new talent to be merged with the experience and those with specialized skills cannot be promoted to the already crowded executive ranks. It also does not guarantee or even attempt to bring the "right person for the right job".
Relationships between government bureaucrats and companies are often cozy. is the institutionalised practice where Japanese senior bureaucrats retire to high-profile positions in the private and public sectors. The practice is increasingly viewed as corrupt and a drag on unfastening the ties between private sector and state which prevent economic and political reforms.
Lifetime employment (shushin koyo) and seniority-based career advancement have been common in the Japanese work environment
Japanese work environment
Many both in and outside of Japan share an image of the Japanese work environment that is based on a lifetime-employment model used by large companies as well as a reputation of long work-hours and strong devotion to one's company...
.
Recently, Japan has begun to gradually move away from some of these norms.
refers to someone whose income is salary based; particularly those working for corporations. Its frequent use by Japanese corporations, and its prevalence in Japanese manga
Manga
Manga is the Japanese word for "comics" and consists of comics and print cartoons . In the West, the term "manga" has been appropriated to refer specifically to comics created in Japan, or by Japanese authors, in the Japanese language and conforming to the style developed in Japan in the late 19th...
and anime has gradually led to its acceptance in English-speaking countries as a noun for a Japanese white-collar
White-collar worker
The term white-collar worker refers to a person who performs professional, managerial, or administrative work, in contrast with a blue-collar worker, whose job requires manual labor...
businessman. The word can be found in many books and articles pertaining to Japanese culture. Immediately following World War II, becoming a salaryman was viewed as a gateway to a stable, middle-class lifestyle. In modern use, the term carries associations of long working hours, low prestige in the corporate hierarchy, absence of significant sources of income other than salary, wage slavery
Wage slavery
Wage slavery refers to a situation where a person's livelihood depends on wages, especially when the dependence is total and immediate. It is a negatively connoted term used to draw an analogy between slavery and wage labor, and to highlight similarities between owning and employing a person...
, and karōshi
Karoshi
, which can be translated literally from Japanese as "death from overwork", is occupational sudden death. Although this category has a significant count, Japan is one of the few countries that reports it in the statistics as a separate category...
. The term salaryman refers almost exclusively to males.
An office lady
Office lady
An office lady, often abbreviated OL , is a female office worker in Japan who performs generally pink collar tasks such as serving tea and secretarial or clerical work. Like many unmarried Japanese, OLs often live with their parents well into early adulthood...
, often abbreviated OL (Japanese: オーエル Ōeru), is a female office worker in Japan who performs generally pink collar
Pink Collar
Pink Collar is an ABC sitcom which just only pilot episode aired. It stars Alicia Silverstone, Charlotte Ross, Matt Malloy, and Ryan Michelle Bathe. TV-Pilot set in an accident insurance agency, Pink Collar talking about the lives of four woman as they juggle their ambitions, friendships, and...
tasks such as serving tea and secretarial
Secretary
A secretary, or administrative assistant, is a person whose work consists of supporting management, including executives, using a variety of project management, communication & organizational skills. These functions may be entirely carried out to assist one other employee or may be for the benefit...
or clerical work. Like many unmarried Japanese, OLs often live with their parents well into early adulthood. Office ladies are usually full-time
Full time
Full-time employment is employment in which the employee works the full number of hours defined as such by his/her employer. Full-time employment often comes with benefits that are not typically offered to part-time, temporary, or flexible workers, such as annual leave, sickleave, and health...
permanent staff, although the jobs they do usually have little opportunity for promotion
Promotion (rank)
A promotion is the advancement of an employee's rank or position in an organizational hierarchy system. Promotion may be an employee's reward for good performance i.e. positive appraisal...
, and there is usually the tacit expectation that they leave their jobs once they get married.
(other spellings below) is a Japanese expression for people between the age of 15 and 34 who lack full time employment or are unemployed, excluding homemakers and students. They may also be described as underemployed or freelance workers. These people do not start a career
Career
Career is defined by the Oxford English Dictionary as a person's "course or progress through life ". It is usually considered to pertain to remunerative work ....
after high school
Secondary education in Japan
Secondary education in Japan is split into middle schools which cover the seventh through ninth grades, and high schools which mostly cover grades ten through twelve...
or university but instead usually live as parasite singles
Parasite singles
Parasite single is a Japanese term for a single person who lives with their parents until their late twenties or early thirties in order to enjoy a carefree and comfortable life...
with their parents and earn some money with low skilled and low paid jobs. The low income makes it difficult for freeters to start a family, and the lack of qualifications makes it difficult to start a career at a later point in life.
, which can be translated quite literally from Japanese as "death from overwork", is occupational sudden death. The major medical causes of karōshi deaths are heart attack and stroke due to stress.
, (sometimes also translated as corporate bouncers, meeting-men, or corporate blackmailers) are a form of specialized racketeer unique to Japan, and often associated with the yakuza
Yakuza
, also known as , are members of traditional organized crime syndicates in Japan. The Japanese police, and media by request of the police, call them bōryokudan , literally "violence group", while the yakuza call themselves "ninkyō dantai" , "chivalrous organizations". The yakuza are notoriously...
that extort money from or blackmail companies by threatening to publicly humiliate
Humiliation
Humiliation is the abasement of pride, which creates mortification or leads to a state of being humbled or reduced to lowliness or submission. It can be brought about through bullying, intimidation, physical or mental mistreatment or trickery, or by embarrassment if a person is revealed to have...
companies and their management, usually in their .
is a Japanese term for moneylender, or loan shark
Loan shark
A loan shark is a person or body that offers unsecured loans at illegally high interest rates to individuals, often enforcing repayment by blackmail or threats of violence....
. It is a contraction of the Japanese words for salaryman
Salaryman
refers to someone whose income is salary based; particularly those working for corporations. Its frequent use by Japanese corporations, and its prevalence in Japanese manga and anime has gradually led to its acceptance in English-speaking countries as a noun for a Japanese white-collar...
and cash. Around 14 million people, or 10% of the Japanese population, have borrowed from a sarakin. In total, there are about 10,000 firms (down from 30,000 a decade ago); however, the top seven firms make up 70% of the market. The value of outstanding loans totals $100 billion. The biggest sarakin are publicly traded and often allied with big banks.
The first "Western-style" department store in Japan
Department stores in Japan
Department stores in Japan are referred to as hyakkaten or depāto , an abbreviation of the English term.-History:The first "modern-style" department store in Japan was Mitsukoshi, founded in 1904, which has its root as a kimono store called Echigoya from 1673. When the roots are considered,...
was Mitsukoshi
Mitsukoshi
is an international department store chain with headquarters in Tokyo, Japan. Mitsukoshi Ltd. has amalgamated with Isetan Co.,Ltd ,and changed company name to Isetan Mitsukoshi Ltd.- History :...
, founded in 1904, which has its root as a kimono
Kimono
The is a Japanese traditional garment worn by men, women and children. The word "kimono", which literally means a "thing to wear" , has come to denote these full-length robes...
store called Echigoya from 1673. When the roots are considered, however, Matsuzakaya
Matsuzakaya
is a major Japanese department store chain operated by Daimaru Matsuzakaya Department Stores, a subsidiary of J. Front Retailing. When the chain was an independent company, , it had its headquarters in Naka-ku, Nagoya.- History :...
has an even longer history, dated from 1611. The kimono store changed to a department store in 1910. In 1924, Matsuzakaya store in Ginza
Ginza
is a district of Chūō, Tokyo, located south of Yaesu and Kyōbashi, west of Tsukiji, east of Yūrakuchō and Uchisaiwaichō, and north of Shinbashi.It is known as an upscale area of Tokyo with numerous department stores, boutiques, restaurants and coffeehouses. Ginza is recognized as one of the most...
allowed street shoes to be worn indoors, something innovative at the time. http://www.matsuzakaya.co.jp/corporate/history/honshi/index.shtml These former kimono shop department stores dominated the market in its earlier history. They sold, or rather displayed, luxurious products, which contributed for their sophisticated atmospheres. Another origin of Japanese department store is that from railway company. There have been many private railway
Private railway
A private railroad is a railroad run by a private corporation, as opposed to a railroad run by a public sector.-Japan:In Japan, refers to a railway line owned and operated by private sector. Although Japan Railways Group companies are private entities, they are not considered private railways...
operators in the nation, and from 1920s, they started to build department stores directly linked to their lines' termini. Seibu
Seibu Department Stores
is a Japanese department store. The first store to trade under the name opened its doors in 1949. Seibu is typical of Japanese department stores with a wide variety of stores doing business on several floors. The company is now a subsidiary of Seven & I Holdings Co., Ltd..-Japan:The Seibu...
and Hankyu are the typical examples of this type.
From the 1980s onwards, Japanese department stores face fierce competition from supermarkets and convenience stores, gradually losing their presences. Still, depāto are bastions of several aspects of cultural conservatism in the country. Gift certificates for prestigious department stores are frequently given as formal presents in Japan. Department stores in Japan generally offer a wide range of services and can include foreign exchange
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
, travel reservations, ticket sales for local concerts and other events.
Keiretsu
A is a set of companies with interlocking business relationships and shareholdings. It is a type of business groupBusiness group
A corporate group is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. The concept of a group is frequently used in tax law, accounting and company law to attribute the rights and duties of one member of the group to...
. The prototypical keiretsu are those which appeared in Japan during the "economic miracle
Japanese post-war economic miracle
The Japanese post-war economic miracle is the name given to the historical phenomenon of Japan's record period of economic growth following World War II, spurred mainly by Japanese economic policy, in particular through the Ministry of International Trade and Industry...
" following World War II. Before Japan's surrender, Japanese industry was controlled by large family-controlled vertical monopolies called zaibatsu
Zaibatsu
is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...
. The Allies
Allies of World War II
The Allies of World War II were the countries that opposed the Axis powers during the Second World War . Former Axis states contributing to the Allied victory are not considered Allied states...
dismantled the zaibatsu in the late 1940s, but the companies formed from the dismantling of the zaibatsu were reintegrated. The dispersed corporations were re-interlinked through share purchases to form horizontally-integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making the alliances vertically integrated as well. In this period, official government policy promoted the creation of robust trade corporations which could withstand heavy pressures from intensified world trade competition.
The major keiretsu were each centered around one bank, which lent money to the keiretsu's member companies and held equity positions in the companies. Each central bank had great control over the companies in the keiretsu and acted as a monitoring entity and as an emergency bail-out entity. One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no entities could challenge the power of the banks.
There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company (for example all factors of production of a certain product will be connected), while a horizontal keiretsu shows relationships between entities and industries, normally centered around a bank and trading company. Both are complexly woven together and self-sustain each other.
The Japanese recession in the 1990s had profound effects on the keiretsu. Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had the effect of blurring the lines between the keiretsu: Sumitomo Bank and Mitsui
Mitsui
is one of the largest corporate conglomerates in Japan and one of the largest publicly traded companies in the world.-History:Founded by Mitsui Takatoshi , who was the fourth son of a shopkeeper in Matsusaka, in what is now today's Mie prefecture...
Bank, for instance, became Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
is a Japanese bank based in Yurakucho, Chiyoda, Tokyo, Japan. It is a member of the Sumitomo Group and Mitsui Group. As of the year 2009, SMBC was the second largest bank in Japan in terms of assets.-History:...
in 2001, while Sanwa Bank (the banker for the Hankyu-Toho Group) became part of Bank of Tokyo-Mitsubishi UFJ. Additionally, many companies from outside the keiretsu system, such as Sony
Sony
, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues....
, began outperforming their counterparts within the system.
Generally, these causes gave rise to a strong notion in the business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While the keiretsu still exist, they are not as centralized or integrated as they were before the 1990s. This, in turn, has led to a growing corporate acquisition industry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as rising derivative litigation by more independent shareholders.
Current economic issues
The KoizumiJunichiro Koizumi
is a Japanese politician who served as Prime Minister of Japan from 2001 to 2006. He retired from politics when his term in parliament ended.Widely seen as a maverick leader of the Liberal Democratic Party , he became known as an economic reformer, focusing on Japan's government debt and the...
administration, which held office until 2006, enacted or attempted to pass (sometimes with failure) major privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
and foreign-investment laws intended to help stimulate Japan's economy. Although the effectiveness of these laws is still ambiguous, the economy has begun to respond, but Japan's aging population
Aging of Japan
The ageing of Japan outweighs all other nations with the highest proportion of elderly citizens, 21% over the age of 65. In 1989, only 11.6% of the population was 65 years or older, but projections were that 25.6% would be in that age category by 2030...
is expected to place further strain on growth in the near future.
Keynesian economists tend to claim that Japan's economy is far stronger than generally believed. Some mainstream economists acknowledge that Japan, which unlike most developed countries has maintained its industrial base, and has vast capital reserves, currently has a strong economic outlook.
The privatization of Japan Post
Japan Post
was a government-owned corporation in Japan, that existed from 2003–2007, offering postal and package delivery services, banking services, and life insurance. It had over 400,000 employees and ran 24,700 post offices throughout Japan and was the nation's largest employer. One third of all Japanese...
, the Japanese postal system which also runs insurance and deposit-taking businesses, is a major issue. A political battle over privatization caused a political stalemate in August 2005, and ultimately led to the dissolution of the Japanese House of Representatives
House of Representatives of Japan
The is the lower house of the Diet of Japan. The House of Councillors of Japan is the upper house.The House of Representatives has 480 members, elected for a four-year term. Of these, 180 members are elected from 11 multi-member constituencies by a party-list system of proportional representation,...
. The Postal Savings deposits, which have until now been used to fund public works projects, many of which have had questionable economic value
Pork barrel
Pork barrel is a derogatory term referring to appropriation of government spending for localized projects secured solely or primarily to bring money to a representative's district...
, stands in excess of $1.9 trillion, and could be a major force in energizing the private sector.
The Japanese monetary authorities' continued desire to depress the price of the Japanese yen
Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
relative to other key specific currencies to protect domestic business from imports may no longer be feasible. The most recent record intervention in 2003 amounted to over 17 trillion yen, more than one third of one trillion US dollars at the time and nearly 3% of Japan's 2003 GDP, being sold in favor of other non-yen denominated assets. However, since 2005, Japan has not directly intervened to buy currency, as yen carry trade has effectively carried out the same task.
Interestingly, international trade has expanded by 60% from 91.4 trillion yen to 142.6 trillion yen from 2001 to 2006. Taking in account the economic participation rate, Japan's GDP per worker has increased steadily.
The Organization for Economic Cooperation and Development downgraded its economic forecasts on March 20, 2008 for the Japan for the first half of 2008. Japan does not have room to ease fiscal or monetary policy, the 30-nation group warned. For Japan, the OECD said the pace of underlying growth appears to be softening despite support from buoyant neighboring Asian economies. The organization expects first-quarter GDP to be up 0.3 percent and predicts a rise of 0.2 in the second quarter.
On November 17, 2008, Japanese government officials announced that the economy was in a recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
. It was reported that Japan's economy contracted at an annual pace of 1.8% in the third quarter of 2008. It is forecasted to have shrunk 0.8% through the fiscal year that ends March 2009. In July 2009 unemployment reached a post-war high of 5.7 per cent, according to the Japan Times. Although the economy is recovering in 2010 levels of public debt remain extremely high, approaching 226% of GDP.
On March 17, 2010 the Bank of Japan
Bank of Japan
is the central bank of Japan. The Bank is often called for short. It has its headquarters in Chuo, Tokyo.-History:Like most modern Japanese institutions, the Bank of Japan was founded after the Meiji Restoration...
moved to boost yen reserves for 3-month bank loans to 20 trillion yen, although economists such as Richard Koo of the Nomura Research Institute
Nomura Research Institute
Nomura Research Institute, Ltd. , often called NRI, was established in 1965, now employs about 4,700 people, and is Japan's largest Consulting and IT consulting firm....
see this as a move merely to please the Democratic Party of Japan
Democratic Party of Japan
The is a political party in Japan founded in 1998 by the merger of several opposition parties. Its socially liberal platform is generally considered center-left in the Japanese political spectrum...
because, as no money is leaving the financial system, there will be no impact on long term rates in either the ordinary market or the Foreign exchange market
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
. As a result of this the foreign press and the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
believe Japan should be doing more to help its economy recover.
In August 2010 the yen hit a 15-year high against the US dollar in nominal terms. In real exchange rate terms, however, the yen was still valued at less than its average since 1990.
On October 2011, the Japanese Ministry of Finance spent around Y5 trillion-Y7.5 trillion ($60 billion-$80 billion) to buy dollars against the yen.The intervention came after the dollar touched a record low of 75.31 yen and pushed the world's main reserve currency up past 79 yen. The dollar, however, slipped below 78 in European trade.
Other economic indicators
Net international investment position
The difference between a country's external financial assets and its liabilities is the net international investment position . Both public and private held external assets and liabilities by legal residents of the respective country are hereby taken into account...
: 266,223 \ billion (1st)
Industrial Production Growth Rate: 7.5% (2010 est.)
Investment (gross fixed): 20.3% of GDP (2010 est.)
Household income or consumption by percentage share:
- Lowest 10%: 4.8%
- Highest 10%: 21.7% (1993)
Agriculture – Products: rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, fish
Exports – Commodities: machinery and equipment, motor vehicles, semiconductors, chemicals
Imports – Commodities: machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials (2001)
Exchange rates:
Japanese Yen per US$1 – 88.67 (2010), 93.57 (2009), 103.58 (2008), 117.99 (2007), 116.18 (2006), 109.690016 (2005), 115.933 (2003), 125.388 (2002), 121.529 (2001), 105.16 (January 2000), 113.91 (1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995)
Electricity:
- Electricity – consumption: 925.5 billion kWh (2008)
- Electricity – production: 957.9 billion kWh (2008 est.)
- Electricity – exports: 0 kWh (2008)
- Electricity – imports: 0 kWh (2008)
Electricity – Production by source:
- Fossil Fuel: 69.7%
- Hydro: 7.3%
- Nuclear: 22.5%
- Other: 0.5% (2008)
Electricity – Standards:
- 100 volts at 50 Hz from the Oi River (in ShizuokaShizuoka Prefectureis a prefecture of Japan located in the Chūbu region on Honshu island. The capital is the city of Shizuoka.- History :Shizuoka prefecture was formed from the former Tōtōmi, Suruga and Izu provinces.The area was the home of the first Tokugawa Shogun...
) Northward; - 100 volts at 60 Hz Southward
Oil:
- production: 132700 oilbbl/d (2009) (46th)
- consumption: 4363000 oilbbl/d (2009) (3rd)
- exports: 380900 oilbbl/d (2008) (64th)
- imports: 5033000 oilbbl/d (2008) (2nd)
- net imports: 4620000 oilbbl/d (2008 est.)
- proved reserves: 44120000 bbl (7,014,519,455.4 l) (1 January 2010 est.)
See also
- Economic history of JapanEconomic history of JapanThe economic history of Japan is one of the most studied for its spectacular growth after the Meiji Restoration when it became the first non-European Power and after the Second World War when the island nation rose to become the world's second largest economy....
- Tokugawa coinageTokugawa coinageTokugawa coinage was a unitary and independent metallic monetary system established by Shogun Tokugawa Ieyasu in 1601 in Japan, and which lasted throughout the Tokugawa period until its end in 1867.-History:...
- Japanese post-war economic miracleJapanese post-war economic miracleThe Japanese post-war economic miracle is the name given to the historical phenomenon of Japan's record period of economic growth following World War II, spurred mainly by Japanese economic policy, in particular through the Ministry of International Trade and Industry...
- Japanese asset price bubbleJapanese asset price bubbleThe was an economic bubble in Japan from 1986 to 1991, in which real estate and stock prices were greatly inflated. The bubble's collapse lasted for more than a decade with stock prices initially bottoming in 2003, although they would descend even further amidst the global crisis in 2008. The...
- Quantitative easingQuantitative easingQuantitative easing is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy...
External links
- Japan's economic outlook following the 11 March 2011 Earthquake
- OECD Economic Survey of Japan 2011
- Economic survey of Japan 2008: Reforming the labour market to cope OECD with increasing dualism and population ageing
- Japan’s Debt Challenge, Q&A with economist William W. Grimes (October 2011)
- Why Are Japanese Wages So Sluggish? IMF Working paper
- Long-Term Effects of a Recession at Labor Market Entry in Japan and the United States
- LABOR TURNOVER IN THE USA AND JAPAN: A TALE OF TWO COUNTRIES
- Videos on Japan's Relations with the US from the Dean Peter Krogh Foreign Affairs Digital Archives