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Japan - Overview

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Capital:: Tokyo
Area:: 378 km2
Total Population:: 127.561
Annual growth rate:: -0.00%
Density:: 350.00/km2
Urban population:: 92%
Population of Tokyo (31.036), Osaka (17.590), Nagoya (9.250), Yokohama (3.655), Fukuoka (2.230), Sapporo (2.130), Hiroshima (1.700), Kobe (1.560), Kyoto (1.500)
Official language: Japanese (nihongo)
Other languages spoken: Korean and Chinese.
Business language: English is moreover the foreign language which is the most usually spoken. However the Japanese, including the business leaders, sometimes only have basic English. Businessmen often read English better than they can speak it.
Ethnic Origins:: Japanese 98.5%, Koreans 0.5%, Chinese 0.4%, other 0.7%
Beliefs: Shintoism and Buddhism are the two most widespread religions (84% of the population). Japanese follow either one or the other, or both.
Telephone codes:
To make a call from: 0
To make a call to: +81
Internet suffix:: .jp
Type of State::
Empire having a parliamentary democracy.
Type of economy::
High-income economy, OECD member, G8 member
Third greatest world economy; it has the largest number of patents taken out in the world. The country is affected by numerous natural disasters

Economic overview

Japan, world's third largest economy, is very vulnerable to the global economic situation, due to its strong dependence on exports. In the recent years, its economy has experienced periods of recession due to the slowdown of the global economy and the earthquake and the following tsunami which it experienced in 2011. In 2013, growth remained weak (1%) with a shortfall in domestic demand and exports well below their potential. For 2014, the outlook remains equally grim (1.2%) and consumption seems to be affected by the rise in VAT>

In 2013, the proactive policy led by the prime minister Shinzo Abe, whose goal was to help the country overcome deflation, contributed to the economy's stability. Three stimulus measures have been implemented: a massive support for economic activity worth 132 billion euro; an agressive monetary policy aiming to reduce inflation to below 2% in two years; and a deregulation of the labour market. The 2014 budget contains measures aiming to mitigate the potential negative impact of the rise in VAT such as an increase in public spending in the areas of public works, social security and defense. It will be partially funded (43%) by the emission of new state bonds. The budget, which should reach more than 941 billion USD, has been criticized by the opposition as unlikely to remedy the country's financial ills, given that its state debt already exceeds 200% of the GDP. The Central Bank is trying to fight against deflation which has lasted for over 15 years. Population aging and political tensions with China and South Korea are also a source of concern.

The unemployment rate increased under the effects of the crisis, but it remains moderate at about 5%.

Main industries

Japan has few natural resources (some deposits of gold, magnesium, coal and silver), therefore, it depends from exports to supply itself with raw materials and energy resources.  Having a large maritime area, the country is one of the first producers of halieutic (fishing) products. Only 15% of Japan's surface is suitable for cultivation. Tea and rice are the two main crops. The agricultural sector is highly subsidized and protected. Agriculture contributes marginally to the GNP and employs less than 4% of the active population.

The industrial sector is very diversified and it covers basic products (steel, paper), as well as high technology products. Japan dominates the sectors of automobile, robotics, biotechnology, nanotechnology and renewable energy. Japan is the world’s second producer of cars and ships. The industrial sector contributes to nearly 30% of the GNP.
The service sector accounts for more than 70% of the GDP and employs nearly 70% of the active population.

Foreign trade overview

Foreign trade is an essential element of the Japanese economy, but the country is not sufficiently open and imposes extensive non-tariff barriers, especially in the agricultural sector. The country has recently negotiated a number of free-trade agreements, including with the EU and the Transpacific partnership. Japan ranks fourth as a global importer and exporter of goods (2012) and trade represents around 30% of the Japanese GDP.
Japan's trade balance has been negative since 2011: exports dropped as a result of the global slowdown and the proven risks of contamination of the food chain following the Japanese nuclear disaster. Meanwhile, imports have increased due to purchases related to energy production and their cost has risen due to the weak yen. In 2013, the deficit reached a record level of $112b, a 65% increase compared to 2012.
The main trade partners of Japan are the United States, China, Southeast Asia and Saudi Arabia.


According to the 2013 UNCTAD report on world investment, during the 2013-2015 period, Japan was the 10th most attractive destination for multinational companies. Its potential appeal is very strong compared to other countries, but its performance in terms of reception of FDI is weak. After slowing down in 2009 following the global economic crisis, Japan experienced disinvestment in 2010 and 2010. Since 2012, FDI flux have returned to positive numbers. In 2013, FDI influx rose by more than 60% compared to 2012 to 2.8 billion USD.

The main asset of Japan is its position as a leader in matters of high technology, research and development. The potential hindrance to investment are of a linguistic order and business culture. The disaster that hit Japan on March 11, 2011 (the earthquake and the devastating tsunami that followed), as well as environmental and health concerns about the situation of the Fukushima Daiichi Nuclear Plant could slow down foreign investment for a short period. However, Japan remains a key market for investors. In addition, the Japanese economy should be able to finance the reconstruction of the country without too much difficulty thanks to a Surplus in Savings accumulated over recent years.
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