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Economic and political outline

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

Economic indicators

After a growth rate of 2.4% in 2005, the GDP has had a slightly lower growth: 2% in 2006 and 2.4% in 2007. The country went into recession in 2008, mainly because of a decline of economic activity in the United States (main trading partner), in Europe (which accounts for 15% of the country's total of exports) and in Asia (more specifically China). Moreover, the rise of energy and food prices has contributed to the fall of domestic demand.
With the current account slightly in surplus, trade continues to sustain the economy and imports are benefiting from the appreciation of the Yen.
The general government balance has a huge deficit, and the level of the public net-debt is quite significant. They account for 3.7% and nearly 200% of the GDP respectively. It is for these reasons that the government announced restrictions on budgetary and monetary policies. Unemployment decreased until 2007. Since 2008 this rate is increasing and this trend will continue in the next years.

Main indicators	2006	2007	2008	2009	2010
GDP (billions USD)	4,363.63	4,384.38	4,923.76e	4,992.85	4,724.69
GDP (constant prices, annual % change)	2.0	2.4	-0.6	-6.2	0.5
GDP per capita (USD)	34,159	34,318	38,559e	39,116e	37,052e
General government balance (in % of GDP)	-4.0	-2.5	-5.6e	-9.9e	-9.8e
Inflation rate (%)	0.3	0.0	1.4e	-1.0e	-0.6
Unemployment rate (% of the labor force)	4.1	3.8	4.0	4.6	5.6
Current Account (billions USD)	170.44	210.97	157.08e	76.36	55.98e
Current Account (in % of GDP)	3.9	4.8	3.2e	1.5e	1.2e

Source: IMF - World Economic Outlook Database

Note: (e) Estimated data

Main sectors of industry

Japan has few natural resources, but deposits of gold, magnesium, coal, and silver meet Japan’s current industrial needs. 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 marginally to the GDP and employs less than 5% of the active population.

The industrial sector is very diversified. Japanese firms produce basic products (steel, paper), as well as advanced technological goods. Japan is 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 two thirds of the GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Employment by sector (in % of total employment)	4.4	27.9	66.4
Value added (in % of GDP)	1.5	30.1	68.4
Value added (annual % change)	-2.6	3.2	2.2

- last available data.

Monetary indicators	2004	2005	2006	2007	2008
Japanese Yen (JPY) - Average annual exchange rate for 1 USD	108.19	110.22	116.30	117.75	103.36

Source: World Bank - World Development Indicators

Indicator of economic freedom

Score:: 72.8/100
Position:: mostly free
World Rank:: 19 out of 179
Regional Rank:: 5 out of 42

Distribution of Economic freedom in the world
Source: 2008 Index of Economic freedom, Heritage Foundation

Country risk

See the country risk analysis provided by Ducroire.

Foreign trade in figures

Foreign trade is an essential element of the Japanese economy. Under the pressure exerted by the different members of the WTO, the Japanese market has progressively opened up to international exchanges since the 1994 Uruguay Round. Nevertheless, the World Trade Organization recommends a further liberalization of exchange, especially in the agricultural sector. Paradoxically, the Japanese commercial policy is associated with some of the lowest customs duties in the world and extensive non-tariff barriers. Consequently a free-trade agreement was signed in February, 2009 with Switzerland (first European country to conclude such an agreement with Japan) which exempts 99 % of trade transactions of custom duty between these two countries during a period of 10 years. Its main commercial partners are the United States, China and Southeast Asia. In 2008, Japan showed a big trade surplus and should probably maintain a positive balance of trade during the next years.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	342,723	406,866	473,614	534,509	573,337
Exports of goods (millions USD)	449,119	538,999	567,572	615,813	678,090
Imports of services (millions USD)	111,528	135,514	134,256	135,556	150,367
Exports of services (millions USD)	77,621	97,611	110,210	117,298	129,117
Imports of goods and services (annual % change)	3.9	8.1	5.8	4.2	-
Exports of goods and services (annual % change)	9.2	13.9	7.0	9.5	-
Imports of goods and services (in % of GDP)	10.4	11.4	12.9	14.8	-
Exports of goods and services (in % of GDP)	12.0	13.3	14.3	16.1	-
Trade Balance (millions USD)	106,396	132,134	93,958	81,303	104,752
Trade Balance (including service) (millions USD)	72,488	94,231	69,912	63,046	83,502
Foreign trade (in % of GDP)	22.4	24.7	27.3	30.9	-

Source: World Bank

Main partner countries

Main customers (% of exports)	2007
United States	20.4%
China	15.3%
South Korea	7.6%
Hong Kong	5.4%
Thailand	3.6%
Germany	3.2%
Singapore	3.1%
Netherlands	2.6%
United Kingdom	2.3%
Malaysia	2.1%
Australia	2.0%
Russia	1.5%
Canada	1.5%
Mexico	1.4%
Philippines	1.3%
Indonesia	1.3%
Panama	1.2%
France	1.2%
United Arab Emirates	1.1%
Belgium	1.1%
See more countries	47.7%

Main suppliers (% of imports)	2007
China	20.6%
United States	11.6%
Saudi Arabia	5.7%
United Arab Emirates	5.2%
Australia	5.0%
South Korea	4.4%
Indonesia	4.3%
Germany	3.1%
Thailand	2.9%
Malaysia	2.8%
Qatar	2.7%
Iran	2.0%
Russia	1.7%
France	1.6%
Canada	1.6%
Kuwait	1.6%
Philippines	1.4%
Chile	1.3%
South Africa	1.2%
United Kingdom	1.2%
See more countries	51.9%

Source: Comtrade

Main products

Main exports (% of exports)	2007
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	22.4%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	19.7%
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	18.7%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	4.6%
Iron and steelIron and steel	4.2%
Plastics and articles thereofPlastics and articles thereof	3.1%
Organic chemicalsOrganic chemicals	2.9%
Ships, boats and floating structuresShips, boats and floating structures	2.2%
Articles of iron or steelArticles of iron or steel	1.7%
Miscellaneous chemical productsMiscellaneous chemical products	1.6%
Rubber and articles thereofRubber and articles thereof	1.5%
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	1.3%
Copper and articles thereofCopper and articles thereof	1.1%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	0.9%
Photographic or cinematographic goodsPhotographic or cinematographic goods	0.7%
Glass and glasswareGlass and glassware	0.6%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.6%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	0.5%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.5%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.4%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	0.4%
Aircraft, spacecraft, and parts thereofAircraft, spacecraft, and parts thereof	0.4%
Aluminium and articles thereofAluminium and articles thereof	0.4%
Pharmaceutical productsPharmaceutical products	0.3%
Man-made filamentsMan-made filaments	0.3%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.2%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.2%
Man-made staple fibresMan-made staple fibres	0.2%
Ceramic productsCeramic products	0.2%
Other base metals; cermets; articles thereofOther base metals; cermets; articles thereof	0.2%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.2%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	0.2%
Fish and crustaceans, molluscs and other aquatic...Fish and crustaceans, molluscs and other aquatic invertebrates	0.2%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.2%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.2%
CottonCotton	0.1%
Wadding, felt and nonwovens; special yarns; twine,...Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof	0.1%
Clocks and watches and parts thereofClocks and watches and parts thereof	0.1%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.1%
Nickel and articles thereofNickel and articles thereof	0.1%
Albuminoidal substances; modified starches; glues;...Albuminoidal substances; modified starches; glues; enzymes	0.1%
Pulp of wood or of other fibrous cellulosic...Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard	0.1%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.1%
See more products	30.4%

Main imports (% of imports)	2007
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	27.8%
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	11.7%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	9.1%
Ores, slag and ashOres, slag and ash	4.1%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	3.4%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	2.5%
Organic chemicalsOrganic chemicals	2.1%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	1.9%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	1.9%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	1.9%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	1.7%
Plastics and articles thereofPlastics and articles thereof	1.6%
Fish and crustaceans, molluscs and other aquatic...Fish and crustaceans, molluscs and other aquatic invertebrates	1.6%
Aluminium and articles thereofAluminium and articles thereof	1.6%
Iron and steelIron and steel	1.3%
Pharmaceutical productsPharmaceutical products	1.3%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	1.1%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	1.1%
Meat and edible meat offalMeat and edible meat offal	1.1%
CerealsCereals	1.1%
Aircraft, spacecraft, and parts thereofAircraft, spacecraft, and parts thereof	1.0%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	1.0%
Articles of iron or steelArticles of iron or steel	0.9%
Nickel and articles thereofNickel and articles thereof	0.9%
Miscellaneous chemical productsMiscellaneous chemical products	0.8%
Articles of leather; saddlery and harness; travel...Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut)	0.8%
Preparations of meat, of fish or of crustaceans,...Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates	0.7%
Rubber and articles thereofRubber and articles thereof	0.7%
Oil seeds and oleaginous fruits; miscellaneous...Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder	0.7%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	0.7%
Tobacco and manufactured tobacco substitutesTobacco and manufactured tobacco substitutes	0.5%
Preparations of vegetables, fruit, nuts or other...Preparations of vegetables, fruit, nuts or other parts of plants	0.5%
Beverages, spirits and vinegarBeverages, spirits and vinegar	0.5%
Copper and articles thereofCopper and articles thereof	0.4%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	0.4%
Other made-up textile articles; sets; worn...Other made-up textile articles; sets; worn clothing and worn textile articles; rags	0.4%
Other base metals; cermets; articles thereofOther base metals; cermets; articles thereof	0.4%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.4%
Clocks and watches and parts thereofClocks and watches and parts thereof	0.4%
Glass and glasswareGlass and glassware	0.4%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.3%
Residues and waste from the food industries;...Residues and waste from the food industries; prepared animal fodder	0.3%
Edible vegetables and certain roots and tubersEdible vegetables and certain roots and tubers	0.3%
Salt; sulphur; earths and stone; plastering...Salt; sulphur; earths and stone; plastering materials, lime and cement	0.3%
Coffee, tea, maté and spicesCoffee, tea, maté and spices	0.2%
Pulp of wood or of other fibrous cellulosic...Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard	0.2%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.2%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.2%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.2%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	0.2%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.2%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.2%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.2%
Ceramic productsCeramic products	0.2%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.2%
Albuminoidal substances; modified starches; glues;...Albuminoidal substances; modified starches; glues; enzymes	0.2%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.2%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.1%
Cocoa and cocoa preparationsCocoa and cocoa preparations	0.1%
FertilizersFertilizers	0.1%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.1%
CottonCotton	0.1%
Sugars and sugar confectionerySugars and sugar confectionery	0.1%
See more products	44.0%

Source: Comtrade

See more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of general 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
Search Engines: 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; 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: Yukio Hatoyama, PDJ President (center left), since September 2009.
Next election dates: House of Councilors: 2013

Indicator of freedom of the press

World Rank:: 29/173
Evolution:: 8 places up compared to 2007

Source: Worldwide Press Freedom Index 2007, Reporters Without Borders

Indicator of political freedom

Ranking:: Free
Political freedom:: 1/7
Civil liberties:: 2/7

Map of freedom 2007
Source: Freedom House

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