About Japan and Key Financial Statistics

About Japan and Key Financial Statistics

Overview of Economy:

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

Gross Domestic Product (In USD):

$4.767 trillion (2014 est.)

$4.772 trillion (2013 est.)

$4.697 trillion (2012 est.)

Composition of Gross Domestic Product:

% Agricuture: 1.2

% Industry: 26.8

% Services: 72

Composition of Labor Force by Occupation:

% Agriculture: 2.9

% Industry: 26.2

% Services: 70.9

Per Capita Income:

$37,500 (2014 est.)

$37,600 (2013 est.)

$37,000 (2012 est.)


$699.5 billion (2014 est.)

$694.8 billion (2013 est.)

Key Export Commodities:

motor vehicles 14.9%; iron and steel products 5.4%; semiconductors 5%; auto parts 4.8%; power generating machinery 3.5%; plastic materials 3.3% (2014 est.)

Export Partners:

US 18.9%, China 18.3%, South Korea 7.5%, Hong Kong 5.5%, Thailand 4.5% (2014)


$798.6 billion (2014 est.)

$784.5 billion (2013 est.)

Key Import Commodities:

petroleum 16.1%; liquid natural gas 9.1%; clothing 3.8%; semiconductors 3.3%; coal 2.4%; audio and visual apparatus 1.4% (2014 est.)

Import Partners:

China 22.3%, US 9%, Australia 5.9%, Saudi Arabia 5.9%, UAE 5.1%, Qatar 4.1%, South Korea 4.1% (2014)

Inflation Rate (Consumer Price Index):

2.7% (2014 est.)

0.4% (2013 est.)

Exchange Rate to USD:

yen (JPY) per US dollar -

105.86 (2014 est.)

105.86 (2013 est.)

79.79 (2012 est.)

79.81 (2011 est.)

87.78 (2010 est.)

Unemployment Rate:

3.6% (2014 est.)

4% (2013 est.)

S&P Rating:

Standard & Poor's Ratings:

    • AAA: The best quality borrowers, reliable and stable

    • AA: Quality borrowers, a bit higher risk than AAA

    • A: Economic situation can affect finance

    • BBB: Medium class borrowers, which are satisfactory at the moment

    • BB: More prone to changes in the economy

    • B: Financial situation varies noticeably

    • CCC: An obligor rated currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.

Ref 2012-2014: CIA World Factbook, Wikipedia, PWC, EY, Standard & Poors ratings