Japan has the third largest economy in terms of GDP at Purchasing Power Parity (PPP), coming after the US and China.  However, deflation and the growing value of the Yen are affecting the country’s economy.

Gross domestic product (GDP)

The average GDP amounted to JPY 541,431 billion up until 2010 Q3. The real GDP growth rate sharply declined to 6.3% in 2009 because of a drop in the wages of employees and rising job insecurity.  Furthermore, in 2010, real GDP recovered increasing to 1.6% in Q1, and then to 0.9% in Q3, due to higher domestic demands. 

(Source: guardian.co.uk)

(Source: National Statistics)

GDP per capita

In 2009, GDP per capita increased by 5.9%, and was estimated to be JPY 3,747,610 and JPY 3,762,909 for 2010 and 2011 respectively.

E=Estimated

(Source: IMF)

GDP at PPP

In 2009, GDP at PPP was registered at USD 4,152.3 billion, decreasing 4.35% over the previous year.  However, it is estimated to increase by 3.76% in 2010.

E=Estimated

(Source: IMF)        

Gross National Income (GNI)

GNI has declined by 6.4% over the past three years.

(Source: National Statistics)

GNI per capita at PPP amounted to USD 33,470 in 2009, as compared to USD 34,920 in previous year.

(Source: World Bank)

Income tax rate

In 2010, the income tax rate levied on an individual varied from 5% to 40%.

(Source: taxrates.cc)

Corporate tax rate

The corporate tax rate 40.87%. The Value-Added Tax (VAT) rate is 5%.

(Source: taxrates.cc)

Inflation rate

In 2008, inflation increased to 1.4%, due to a rise in the core consumer prices, but in 2009 the inflation rate dropped to 1.4%.   This deflation was due to unemployment, as there were only 43 jobs available per 100 job seekers.  Furthermore, the inflation rate is estimated to be -1% and -0.3% in the years 2010 and 2011 respectively.

(Source: guardian.co.uk)

(Source: World Bank)

Foreign direct investment (FDI)

The foreign direct investments in Japan were JPY 3,486 billion, whereas direct investments abroad were JPY 9,313 billion.

(Source: National Statistics)

Banking sector assets

The total bank assets as of January 2011 were JPY 127,999 billion.

(Source: Central Bank)

Consumer Price Index (CPI)

CPI in 2010 was recorded at 99.6, increasing 0.1% over the previous year.

Base year: 2005=100

(Source: National Statistics)

CPI decreased in October 2008, due to weak demand and a decrease in core CPI by 1%.

(Source: National Statistics,Reuters)

Wholesale price index (WPI)

The Wholesale Price Index, known as the Domestic Corporate Goods Price Index in Japan was 103 in November 2010, increasing by 0.9% over the previous year. The increase was due to an upsurge in the prices of commodities such as crude oil and non-ferrous metal, and an increase in the tobacco tax rate.

Base year: 2005=100

(Source: National Statistics, Nikkei.com)

Interest rates on savings deposits

The interest rate on savings deposit was 0.05% in 2009.

(Source: National Statistics)

Interest rate on time deposits

(Source: National Statistics)

Money supply (currency in circulation)

In February 2011, total money supply (M3) in Japan was JPY 1,085,323 billion.

(Source: National Statistics)

(Source: National Statistics)

Government expenditure

In 2010, the government expenditure was higher in the sectors of social security (29.5%), national debt service (22.3%) and local allocation of tax grants (18.9%). 

(Source: National Statistics)                

Official exchange rate

In 2009, the value of JPY decreased by 10.4%, as compared to 2008.

(Source: National Statistics)

Government finances

Total revenue

The total revenue collected in 2010 was registered at JPY 92,299 billion, decreasing 10% over the previous year. 

Tax Revenue

The total tax revenue for 2010 was JPY 39,216 billion, increase of 2.4% over the previous year. The tax revenues collected from the Income tax and Consumption tax accounted for 32.6% and 25.9% of the total tax revenue.

(Source: National Statistics)

Current account balance

The current account balance as of October 2010 was JPY 14,362 million.

(Source: National Statistics)

Current account balance - surplus/deficit

The current account balance in 2009 was JPY 2,671 billion, as compared to JPY 2,063 billion in 2008.

(Source: National Statistics)

Balance of payments

(

Source: National Statistics)

Labour force

The total labour force in 2010 was 65.9 million, out of which 62.5 million were employed, and the remaining people were unemployed, creating a total employment rate was 56.6%.

(Source: National Statistics)

Labour force participation rate

The Labour force participation rate till November 2010 was 59.4%, decreasing 0.5% over the previous year. Specifically, the participation rate for those age 15 to 64 was 74%. Furthermore, the labour force participation rate for males was 71.2%, while for females it was 48.5%.

(Source: National Statistics)

Unemployment Rate

In 2010, the total unemployment rate was almost 5%.  Specifically, the rate for males and females was 5.2% and 4.3% respectively.

(Source: National Statistics)

Employment in agriculture

The total number of people employed in the agriculture and forestry industry was 232,000 in 2010, showing a decrease of 4.1% over the previous year.

(Source: National Statistics)

Employment in industries

The total number of employees decreased by 2% from 2007 to 2009.  

(Source: National Statistics)

Level of unionisation

The three major trade unions in the country are: Rengo, with 6.6 million members, Zenroren, with 654,000 members, and Zenrokyo, with 132,000 members.

(Source: National Statistics)

Minimum wage

In 2009, the average monthly wage for a full time employee was JPY 355,000. Furthermore, the monthly wage was highest in December 2009, when it was JPY 655,000.

(Source: National Statistics)

Government stability

After the Second World War in 1945, Japan has been a democratic country. The nation operates under a constitutional monarchy, with a parliamentary form of government. The Emperor has little involvement in the political system and is valued mainly for national ceremonial duties and functions.

The political parties active in the country include:

·         Liberal Democratic Party

·         The Democratic Party of Japan (DPJ)

·         New Komeito

·         Japanese Communist Party

·         and Social Democratic Party

The Liberal Democratic Party has been ruling the country for the past four decades. Currently, The Democratic Party of Japan is the ruling party with Naoto Kan as prime minister.

The Japanese Legislature Diet is the bicameral parliament, comprising of the upper house and the lower house, which are known as the House of Councillors and the House of Representatives respectively.

The Executive power rests with the cabinet, which consists of the prime minister and the Mmnister of state. The prime minister is a member of the Diet and serves a term of four years.

(Source: mofa, wa-pedia)

Regulatory environment

The country’s economic freedom score is 72.8 (out of 100), ranking it the 6^th most free economy out of the 41 countries in Asia Pacific region.

(Source: heritage.org)

(Source: heritage.org)

Corruption perception

Japan is ranked 17^th on the World’s Corruption Perception Index, with a score of 7.7 (out of 10).

(Source: transparency.org)

Freedom of information

The World Press Freedom Index 2010 ranks Japan at 11^th with a score of 2.50.

(Source: rsf.org)

Asahi Shimbun, Yomiuri Shimbun, Mainichi Daily News, Nikkei Net and the Japan Times are the key newspapers in the country. Nippon Hoso Kyoka (NHK), TV Asahi, Nippon TV (NTV), and Tokyo Broadcasting System (TBS) are some of the broadcasters in Japan.

(Source: BBC)

Judicial system

The judicial system in the country is independent of the other branches of the government. There are five types of courts in Japan:

·         Supreme court

·         High court

·         District court