Japan

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

After a 2.4% growth rate in 2005, the GDP has been growing at a slightly lower rate: +2.2% in 2006, +2.3% in 2007. A slowdown at 1.9% is forecasted for 2008, according to FMI.
With current account in surplus, trade sustains the economic growth. Imports benefit from the appreciation of the Yen. Exports benefit from the good business environment in the United States and in Asia, and more precisely in China. Household consumption contributes also to the economic dynamic, improved by an increase of the wages.
The general government balance has a huge deficit, and the level of the general government gross debt is quite significant, representing respectively 3,7% and 184% of the GDP. For these reason, the government has announced a restriction of the budgetary and monetary policy.
Unemployment has decreased since 2003 and today it reaches nearly 4.0% of the active population.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	4,608.14	4,557.10	4,366.46	4,345.95e	4,552.20e
GDP (constant prices, annual % change)	2.7	1.9	2.2	2.0e	1.7e
GDP per capita (USD)	36,075.92	35,671.50	34,180.72e	34,022.91e	35,650.85e
General government balance (in % of GDP)	-6.2	-4.8	-4.1e	-3.9e	-3.8e
Inflation rate (%)	0.0	-0.3	0.3	0.0e	0.5e
Unemployment rate (% of the labor force)	4.7	4.4	4.1	4.0	4.0
Current Account (billions USD)	172.07	165.69	170.44	195.90e	195.15e
Current Account (in % of GDP)	3.7	3.6	3.9	4.5e	4.3e

Source: IMF - World Economic Outlook Database

Note: (e) Estimated data

Socio-demographic indicators	2006	2007	2008
Unemployment rate (%)	4.1	4.0	4.0

Source:

Main sectors of industry

Japan has few natural resources, but deposits of gold, magnesium, coal, and silver meet Japan’s current industrial demands. Fishery is also a very important economic activity. Only 15% of Japan's land is suitable for cultivation. Tea and rice are the two main crops. The agricultural economy is highly subsidized and protected. Agriculture contributes only 1.3% to the GDP and employs 7% of the active population.
The industrial sector is well diversified. Japanese firms produce basic products (steel, paper), as well as most advanced technological goods. Japan is also the world’s second producer of cars and ships. The industrial sector contributes nearly 30% to the GDP. Some sectors such as automobiles, robotics, and micro-technology are very competitive.
The service sector accounts for nearly 68% of the GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	-2.2	2.9	2.2
Value added (in % of GDP)	1.7	30.2	68.1
Employment by sector (in % of total employment)	4.4	27.9	66.4

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	125.39	115.93	108.19	110.22	116.30

Source: World Bank - World Development Indicators

Foreign trade in figures

Foreign trade is an essential element of the Japanese economy. On the 1^st January 2007, Japan was the 5^th largest exporter in the world and the 6^th largest importer in the world.
The Japanese market has progressively opened up to international exchanges since the Uruguay Round of 1994, under pressure exerted by the different members of the WTO. Nevertheless, the World Trade Organization recommends a further liberalization of exchanges, especially as concerns the agricultural sector. Paradoxically, Japanese commercial policy associates some of the lowest Customs duties in the world and extensive non-tariff barriers.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	301,752	342,723	406,866	473,614	534,510
Exports of goods (millions USD)	395,581	449,119	538,999	567,572	615,813
Imports of services (millions USD)	107,940	111,528	135,514	134,256	135,556
Exports of services (millions USD)	65,712	77,621	97,611	110,210	117,298
Imports of goods and services (annual % change)	0.9	3.9	8.5	n.c.	n.c.
Exports of goods and services (annual % change)	7.6	9.0	13.9	n.c.	n.c.
Imports of goods and services (in % of GDP)	10.1	10.4	11.4	n.c.	n.c.
Exports of goods and services (in % of GDP)	11.4	12.0	13.4	n.c.	n.c.
Trade Balance (millions USD)	93,829	106,396	132,134	93,958	81,303
Trade Balance (including service) (millions USD)	51,601	72,488	94,231	69,912	63,046
Current Account (millions USD)	112,447	136,216	172,059	165,783	170,517
Current Account (in % of GDP)	2.9	3.2	3.8	3.7	3.9
Foreign trade (in % of GDP)	21.5	22.4	24.8	n.c.	n.c.

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
United States	22.8%
China	14.3%
South Korea	7.8%
Hong Kong	5.6%

Main suppliers (% of imports)	2006
China	20.5%
United States	12.0%
Saudi Arabia	6.4%
United Arab Emirates	5.5%
Australia	4.8%

Source: 2006

Main products

Main exports (% of exports)	2006
Vehicles other than railway or tramway	21.9%
Electrical machinery and equipment	19.8%
Machinery and mechanical appliances	19.5%
Photographic, cinematographic, measuring and medical instruments	5.5%

Main imports (% of imports)	2006
Mineral fuels, mineral oils	27.9%
Electrical machinery and equipment	11.7%
Machinery and mechanical appliances	9.4%
Photographic, cinematographic, measuring and medical instruments	4.0%
Ores, slag and ash	3.6%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of the Economy, Trade and Industry Ministry of Agriculture, Forestry and Fisheries Japan’s SME policies
Statistical Office: The Japanese Institute of Statistics
Central Bank: The Bank of Japan
Stock Exchange: Tokyo Stock Exchange
Nagoya Stock Exchange
Osaka Securities Exchange
Fukuoka Stock Exchange
Jasdaq Securities Exchange
Online newspapers: Asahi Shimbun
Japan Times
Japan Today
News on Japan
Nihon Keizai Shimbun - Nikkei
Search Engines: Keegan
Alcarna
Books.or.jp
Excite Japan
Fresh Eye
Goo
Infoseek Japan
Japan Web
Lisa
Lycos Japan
MSN Japan
NTT
Straight Flash
Yahoo! Japan
Economic portals: Economy watch

Political outline

Executive Power: The head of state is the Emperor. His role is largely ceremonial. The leader of the majority party or leader of the majority coalition in the parliament (House of Representatives) is designated as the Prime Minister for a four-year term. The Prime Minister is the head of the government and enjoys the real executive powers which include implementation of the law in the country and running the day-to-day affairs. The Cabinet is appointed by the Prime Minister.
Legislative Power: The legislature in Japan is bicameral. The parliament called National Diet consists of: House of Councilors (the upper house) having 242 members elected through a popular vote for six year terms; and House of Representatives (the lower house) having 480 members elected through a popular vote for four-year terms. The Constitution of Japan states that the nation's "highest organ of state power" is the National Diet. The executive branch of government is directly or indirectly dependent on the support of the National Diet, often expressed through a vote of confidence.
Main political parties: Conservatives, right-wing: LDP (Liberal Democratic Party) - made up of various conservative and reformist factions, the largest political party in Japan; DPJ (Democratic Party of Japan) – a liberal, social-democratic party, which opposes the Iraq war; New Komeito – a conservative, theocratic Buddhist party.
Moderates, left-wing: - JCP (Japanese Communist Party) - a moderate communist party; SDP (Social Democratic Party) - a moderate social-democratic and populist party.
Current political leaders: Emperor: AKIHITO (since 7 January 1989) – hereditary
Prime Minister: Shinzo ABE (since April 2001, re-elected in September 2005) – LDP, heading a coalition government with New Komeito
Next election dates: House of Councilors: 2013
House of Representatives: September 2009