Main article: Japan
GDP
Main article: Japan's GDP
Financial system
Budget
2024: Ministries request record $811 billion for 2025
Japan's ministries in September 2024 set a new record in their budget requests for the year beginning in April 2025, the country is struggling with the need to increase spending on social security and defense, while maintaining control over debt obligations.
The ministries requested a total of 117.6 trillion yen ($811 billion) for the next fiscal year. The Japanese Defense Ministry is asking for a record $59 billion.
2020: The budget for 2021 for the first time exceeded $1 trillion against the background of twice the GDP of the public debt
In mid-December 2020, the Japanese Cabinet of Ministers approved the budget for 2021, which for the first time exceeded $1 trillion against the background of twice the GDP of the public debt. For example, the total amount of spending adopted by the US Senate for 2020 was $1.4 trillion. Japan's 2021 budget provides for a total expenditure of 106.6 trillion yen, up 3.8% from last year's original budget. Actual costs could turn out to be much higher given the effects of the pandemic.
It is reported that 5 trillion yen is an investment in reserve funds, which are primarily intended to combat the spread of infection. In addition, the budget increased spending on social security, which also contributed to its sharp growth. The final stage of negotiations on the draft budget in the government will be held on December 21. Finance Minister Taro Aso plans to approve the document at this cabinet meeting.
 | We had to balance the costs of fighting infection, economic recovery and fiscal consolidation, "explained Finance Minister Taro Aso. - Achieving this balance was the most difficult stage of budgeting. |  |
In 2020 Japan , due to the fall in the economy associated with the pandemic, in addition to the main budget, it adopted two additional budgets in the amount of 25.6 trillion yen and 31.9 trillion yen, respectively. In addition, on December 15, the government approved the third such document, worth more than 19 trillion yen. Even before the introduction of the third supplementary budget, the International Monetary Fund reported that Japan's public debt in 2020 reached 266% of gross domestic product, and the budget deficit - 14.2% of GDP.
The budget spending division for 2021 is as follows: 66.9 trillion yen for total spending, including: about 35.8 trillion yen for social security; 5 trillion yen for the reserve fund for the fight against coronavirus; closing a debt of 23.8 trillion yen; 16 trillion yen in transfers to regional and local authorities.[1]
Bank of Japan
Main article: Bank of Japan
Modern monetary theory
Main article: Modern Monetary Theory (SDT)
The financial policy of the country corresponds to the Modern Monetary Theory (SDT).
Non-financial debt
Non-financial debt consists of credit instruments issued by government agencies, households and businesses that are not included in the financial sector.
2022: Aggregate non-financial debt
National debt
Main article: State Debt of Japan
Gold and foreign exchange reserves
2022: Second in world reserves - $1.27 trillion
At the end of 2022, China's reserves amounted to $3.31 trillion, Japan took second place with accumulations of $1.27 trillion, Switzerland - third with assets of $924 billion. Russia finished the year in fourth place with $582 billion. India is fifth, its reserves reach $563 billion.
Sovereign Wealth Fund
Currency: Japanese Yen
2024: Japanese authorities intervene for $52 billion in a week to strengthen the yen
In the last week of April 2024, Japan carried out an official currency intervention in the amount of 8 trillion Japanese yen ($52 billion) to strengthen the yen. This is a lot and exceeds everything that was done in 2022.
BOJ reports indicate that Japan again intervened on July 11, 2024 to boost the yen.
The scale of the intervention was probably about 3.5 trillion yen, based on a comparison of the Bank of Japan accounts and forecasts of money brokers.
2023: Depreciation to JPY 160 per euro - minimum since 2008
On October 31, 2023, the Japanese yen fell to 160 per euro for the first time since August 2008.
Japan has a current account surplus and is a major net lender for the world. So the drop in the yen is not related to any of that. On the contrary, it is Japan's enormous debt burden that forces the BOJ to keep rates low even with their widespread growth. This leads to strong pressure on the yen.
2022: Depreciation to 1990 crisis level - ¥148 per dollar
On October 17, 2022, the yen fell to 148.6 yen per dollar for the first time since 1990.
Japan spent $43 billion on currency interventions from September 29 to October 27 to keep its currency from crashing.
2019: Yen volume in circulation - $953 billion
The gold supply as of August 2019 is $8.7 trillion, the US dollar supply is $1.7 trillion.
Cryptocurrencies
Main article: Cryptocurrencies in Japan
Inflation
2024: Inflation cut to 2.6%
2023: Comparison of inflation in Japan with other countries
2022: Up to 3.7% - record since 2014
Annual inflation in Japan in October 2022 accelerated to 3.7% - a record since 2014.
Stock market
2024
Nikkei 225 record drop in history: 19.6% in three days
The three-day fall of the Nikkei 225 in early August 2024 was 19.6% - the worst result in the history of trading. This is stronger than in March 2011 (Fukushima), where the markets fell by 17.5% and stronger than the most intense decline in 2008 by 18.5%, which occurred 10.10.2008 and almost repeated on October 24-27, 2008 (collapse by 17.4-17.8% in three days) and even stronger than in October 1987 - 17.5%.
In two days, Japan collapsed by 17.5% - also the worst result in history, because in 2008 the collapse was only 15%, and in 1987 by 16.9%.
During the day, the market showed the second worst result after October 1987, then the market collapsed by 14.9%.
Given the volume of trading, open interest and the impact of the Japanese stock market on the financial system, there is no doubt that this is the strongest stress in history.
The collapse is associated exclusively with the concentration of margin positions and idiocy that has seized the markets since the beginning of 2024. The Japanese market was among the leaders in growth and, unlike the United States, where it was possible to come up with at least some kind of justification, everything is extremely bad with Japanese companies, and their margin is the worst among all companies in developed countries.
Nikkei 225 breaks record high in 34 years
On February 22, 2024, Japan's Nikkei 225 passed its record high in 34 years.
After a powerful rally that began in January, the benchmark index exceeded the maximum level reached during the bubble in the late 1980s.
Japan Electronic Payment Systems
2020:60% of Internet users prefer cashless payment
Labour market
2022: Proportion of workers aged 65 or over - above 25%
Pensions
2021: Japan's world's largest pension fund makes record profit of 25% or $339 billion
The world's largest, Japan's public pension fund made a 25% profit, or 37.8 trillion yen ($339 billion). United States), for the 2020 fiscal year ended March 2021
That's the largest figure since the fund began managing the nation's pension reserves in 2001.
Overseas shares were the most yielding investments in the period, yielding 59.4%, followed by Japanese shares, which yielded 41.6%.
2020: Average retirement age for women is 66, for men it is 68
Working hours
2015: More than 9.2% of workers work 60 or more hours a week
Unemployment
2024
2023: Youth unemployment - 4.2%
2020: Unemployment rate - 3.3%
Incomes and debts of the population
2023: Average household debt: 65% of GDP
2022
Real wages remain at 2000 levels
Decrease in real income per employee in the third quarter by 1.5%
in
Small and medium-sized businesses
2022: Bankruptcy of 463 companies
In fiscal 2022 (ended March 31, 2023), 463 small and medium-sized companies went bankrupt in Japan. Such data are provided in a study by Teikoku Databank, the results of which were released in early May 2023.
The key reasons for the ruin are the rise in prices for imported raw materials and food, the inability to cover costs and the difficult macroeconomic situation as a whole. It is noted that the number of bankruptcies of Japanese small and medium-sized businesses at the end of fiscal 2022 was 3.4 times higher than the previous year, when 136 cases were registered. Moreover, in March 2023 alone, 67 companies went bankrupt - this is a record high for one month.
The growing threat of bankruptcies and a lack of working capital are holding back the prospects for higher wages in small and medium-sized firms, where the bulk of wage earners in Japan are employed. And this has a negative impact on the restaurant and hotel business. Soaring prices are forcing consumers to carefully plan costs and save on non-essential goods and services. In the logistics business, costs are expected to rise due to the introduction of restrictions on overtime for drivers in 2024.
A survey conducted by the Bank of Japan in March 2023 among approximately 4,000 citizens on a national scale showed that for 57.6% of respondents, the level of prices for goods and services is the key factor in making spending decisions. For comparison: a year earlier, this figure was 51.7%. According to trade unions, in early 2023, wages and other payments to employees in Japan rose by 3.69% compared with the previous year - the highest value in three decades. However, the increase concerns primarily employees of large corporations, and not workers in the environment of small and medium-sized businesses.[2]
Business and Community Support
2020
Japan gives companies hundreds of billions to pull production out of China
In April 2020, Japan allocated 243.5 billion yen (about $2.2 billion) to help companies withdraw production from China. The state took such a step due to the COVID-19 coronavirus pandemic, which led to a violation of supply chains between states.
Approximately $2 billion will be allocated to help companies that will transfer production from China to Japan. The rest of the money will go to help Japanese enterprises that place production facilities in other countries outside the Celestial Empire.
Before the pandemic, China was Japan's largest trading partner. However, the coronavirus crisis led to the fact that work at many factories was stopped, and imports from China almost halved. Many Japanese firms are betting on a close partner and are entirely dependent on Chinese factories that provide them with critical goods. Against this background, Japan decided to reduce its dependence on China as the largest production base.
The COVID-19 pandemic has shown that Japanese firms should diversify risks and include some redundancy in supply chains, especially for products critical to Japan's stability and security. In addition, Japan seeks to reorient strategically important production. Such measures could strengthen national security, as well as benefit small and medium-sized firms in Japan and stimulate provincial restructuring plans.
It is still difficult to assess the geopolitical and geo-economic implications of these measures, but they will surely depend on the Free and Open Indo-Pacific (FOIP) strategy. As part of this strategy, Japan intends to cooperate with Australia, India, the United States and the developing countries of the Indo-Pacific region to support regional economic development. If Japan decides to encourage the movement of Japanese supply chains from China to FOIP partner countries, it could increase its influence.[3]
Japanese authorities compensate 100% of salaries for small businesses affected by coronavirus
At the end of April 2020, it became known the subsidies provided by Japan, thanks to which small enterprises affected by the coronavirus will be able to receive from the state up to 100% of wages during the state of emergency in the context of the COVID-19 pandemic.
The Ministry of Health, Labor and Welfare plans to use the existing subsidy to adjust employment: it was paid to enterprises that saw no choice but to temporarily lay off workers, but through compensation continued to at least partially provide wages during downtime.
In this situation, dismissed employees have the right to receive at least 60% of their regular wages. The government has promised to take up to 90% of the payments, provided that the idle company does not lay off workers.
Other options are possible. If the central or local government asks small companies (up to 5 workers from the service sector) to temporarily suspend work, and the business responds by applying for a subsidy to adjust employment, the government will compensate 100% of salaries at the level of last year if the company does not lay off workers. The government assumes that idle companies will prefer this option.
The Tokyo government and other cities across Japan have already asked restaurants and other businesses to close or reduce opening hours during the health crisis. The financial support of the central government is aimed at maintaining the income level of workers in these industries. The subsidy program will cover up to 3 million companies and about 10 million employees.
Previously, the employment adjustment subsidy was not popular, in part because of the complicated application process and the long wait. During the coronavirus crisis, only 985 Japanese companies submitted applications.[4]
Japan will pay $2,700 to all citizens whose incomes have plummeted due to coronavirus
On April 7, 2020, Japanese Prime Minister Shinzo Abe announced a local state of emergency and the allocation of about 108 trillion yen ($990 billion) to support business and the population amid the COVID-19 coronavirus pandemic. This amount is about 20% of Japan's GDP.
According to Abe, cash benefits worth more than 6 trillion yen will be paid to families in a difficult situation, as well as small and medium-sized businesses, micro-enterprises. All citizens of the country who, due to the coronavirus, faced a sharp decrease in income, will receive $2,750 each.
The authorities will also expand the range of interest-free lending to include private credit institutions, as well as introduce a deferral of tax payments and social security contributions of 26 trillion yen, thus supporting the continuation of business and protecting employment.
According to Asahi Shimbun, Japan is forced to significantly increase the issue of government bonds to finance a large-scale program of measures to support the economy in the context of the COVID-19 coronavirus pandemic. The volume of additional issue in the financial year, which began on April 1, 2020, will amount to 18.2 trillion yen ($165 billion). This is a record amount of additional accommodation, the previous maximum of 16.9 trillion yen was recorded during the global financial crisis in 2009
By April 7, 2020, 4.5 thousand cases of infection with a new type of coronavirus were registered in Japan. More than 100 people have died.
Shinzo Abe promised that there would be no closure of cities - the so-called lockdown - under any circumstances. The head of the Japanese government stressed that the supply of water, electricity, gas, as well as the work of public transport and key municipal services, including garbage collection, will be fully carried out.[5]
Businessmen
Japan's richest people
2024: Less than $2 million - the threshold for entering the number of the 1% richest people in the country
2022: 2.757 million millionaires in the country
2021: The richest 1% of citizens account for 18.7% of the population's assets
Energy carriers
2024: Japan is one of the biggest players in the LNG industry
Japan ignored climate critics and by 2024 built a global natural gas empire.
Every six hours, somewhere in the world, a shipment of LNG, controlled by a Japanese company, leaves the port.
Those tankers, which account for a quarter of all LNG shipments, are just the tip of Japan's increasingly dominant gas empire.
2020: Five of the biggest importers of minerals
Japan traditionally suffers from a shortage of minerals, which in 2020 bring five leading trading companies to the country:
- Itochu,
- Marubeni,
- Mitsubishi,
- Mitsui и
- Sumitomo.
According to Bloomberg, over 75% of their revenue comes from imports of minerals.
2018: High price of petrol
Power
NPP
Main article: Nuclear power plants in Japan
2020: Energy consumption per capita
and
Industry
2021:399 robots per 10,000 employees
Electronics industry
Main article: Electronics industry in Japan
Mechanical engineering
2019: 8.3 million cars produced
1920
R&D
2022: Japan creates $82 billion innovation fund in universities
In early April 2022, Japan officially opened its first national trust capital fund of $82 billion for universities, which is the largest in the world. The fund is part of Japan's two-pronged approach, which includes supporting start-up companies as well as focused government support for the basic research that underpins the innovation strategy. The purpose of the fund is to provide financial support for research through annual returns on investment. Read more here.
2020: R&D spending - $170.5 billion
2019: Third most patented in the world
At the end of April 2020, the World Intellectual Property Organization (WIPO) ranked countries by the number of new patents. In 2019, Japan accounted for 52,660 patents. Read more here.
Astronautics
Main article: Cosmonautics in Japan
Transport
Main article: Transport in Japan
Foreign trade
Main article: Japan's Foreign Trade
Information Technology
Semiconductors (Japanese market)
2024: $16.7 billion allocated to boost semiconductor industry
Internet trade
2021: 12.9% of total retail sales come from the Internet
Telecommunications
Information Technology Markets
Agriculture
2022: High level of state support for agriculture
2021: Share of farmland - 12%
2019: High levels of pesticide use in agriculture
Tourism
2022: Tourist flow from Russia to Japan falls 11.5 times
The tourist flow from Russia to Japan in 2022 against the background of the outbreak of the conflict in Ukraine fell 11.5 times - ATOR.
2018: Tourists spending $34 billion
Alcohol market
2022
7th in the world in terms of beer production
Stimulation of alcohol consumption among young people due to decline in tax revenues
In August 2022, the tax authorities of Japan announced a competition among people aged 20 to 39 - its participants should offer ways to persuade young people to consume more alcohol, writes the Financial Times. The reason for the initiative is that in 2011, alcoholic beverages accounted for 3% of all tax revenues in Japan, then by 2020 it decreased to 2%.
Participants of the contest Sake Viva! it is necessary to present "new products and designs," as well as ways to encourage drinking at home.
2018: Minimum age to purchase alcoholic beverages - 20 years
Consumption
2023: Fish consumption is higher than meat consumption
Notes
- ↑ Japan Approves Record $1 Trillion Budget for Next Year
- ↑ Inflation drives more Japanese companies into bankruptcy
- ↑ Japan prods firms to leave China, affecting ties with Beijing and Washington
- ↑ Japan to subsidize 100% of salaries at small companies
- ↑ Japan's PM to declare state of emergency as early as Tuesday
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