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Japan economic indicators

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List of indicators:

Balance of payments
Consumer price index (CPI)
Gross domestic product (GDP)
Industrial production index
Leading and coincident indices of business conditions
Machinery orders
Money Supply
Retail sales
Tankan report
Unemployment
Wholesale price index (WPI)

Money Supply

The money supply strongly affects the rates of Japanese currency, the yen. In case the supply grows slowly, the Bank of Japan has to decrease the interest rates affecting the yen negatively. The deflation which means falling prices has a negative affection to the yen.

Tankan Index

This index, based on the surveys held among Japanese companies four times a year and showing the business confidence is one of the key indicators of the Japanese economy.

The Tankan values higher than 0 usually show the positive economy trend and are considered as normal though the higher values gives good support for the yen and are good for the entire economy of Japan.

About Japan's economic structure

The economy of Japan is partly similar to that of the developed European countries. Bank financing is traditionally more reliable from the point of view of Japanese companies than the issuance of equity and bond. It is normal for the employees of big companies to develop careers in one company during all their lives. The Japanese companies are divided into two groups: the first includes multinational corporations, huge and powerful, whether the second one contains small enterprises often owned by families. Since 1960s the economy of Japan has been based on manufacturing industry. The Japanese manufacturing is still dominated by car and electronic production that affect international markets without any difficulties.

Japan leads in production of machine tools as well and export them mostly to the USA and South Korea. Japan is also one of the key players of the steel and iron markets. High level of investments is an important characteristic of Japan's economy in public as well as in private sectors. A gross fixed investment amount calculated for the period from 1999 to 2003 made up 24-27% of the GDP adjusted to current prices which is much higher than US or any european developed country had during the same period.

Economy of Japan

The density of population is high in Japan, about 243 people per square kilometer. This is caused by combination of rather small territory and a considerable population. According to World Bank research, the number of people living in the urban areas is 65% and the length of the life is the highest in the world aggregaing 82 years according to 1997-2003 data. 11.8% of the Japan's population is reported to live below poverty line which corresponds 50% of median household income. The literacy of adult popularion is 99.9%. Speaking about human development index Japan has the 9th place out of 177. Gross National income per capita is $34510 (2003 data) makes Japan the second largest market in the world. Moreover, Japan is a member of OECD. The figures of GDP annual growth was 2.4% in 2004.

Japan used to be the less-developed country in 1952 and its consumption was five times smaler than the one in the USA. But within next 20 years Japan has reached the status of developed country out of less-developed having 8% annual economy growth rate. The values of GDP per capita in Japan raised from 21 to 56 pecent during the period from 1955 to 1970. Though, the largest recession of the Japan's economy since the World War II occured in late 1990s when by the end of this period the Tokyo stock market had suffered 38% decline with 300 trillion yen (2.07 USD trillion) losses. This recession also caused falling of land prices far from it's speculation top. There is a special term "bursting" of the "bubble economy" used for such recession description. GDP decline made up 0.4% in 1997 and 2.8% in 1998 after its constant increase. These two years were the first time when the economy was in decline within two successive years after the World War II. The stock prices increase and the growth of some industries were the first signs of economic recovery occured in 1999 and 2000. The recovery was excited mostly by the rising demand in the developing Asian countries for Japanese products, the development of infomation technologies and government policies. The inflation index, one of the key indicators, made up 1.6% in December 2004.

Japan's phenomenal economic growth

The phenomenal growth of the Japan's economy was a result of two economic trends combination. Firstly, it is the planning and applying the national economic policies by the government along with developing an efficient fiscal and monetary policies. Secondly, the affection of the specific public-spirited management combined with the vast private ownership. The aim of MITI (Ministry of International Trade and Industry) is to create a specific industrial policies that causes economic and social growth. Some industries considered as important for the economic growh were chosen and supported by MITI. In 1960s these industries were: chemicals, shipbuilding, iron and steel, transistor radios; in 1970s they were automobiles and electronics; then computers, computer chips, and other high-technology industries in the 1980s. MITI also helps to smoothly close the plants and retrain the workers for another qualification. It helped with closing textile industry in the 1970s and the shipbuilding industries and ailing coal-mining in the 1980s. The Economic Planning Agency has developed and realized the Ikeda plan which proposed the national economic multiplication by two within the period from 1961 to 1970. It has also developed the strategy of fast GNP increase and inflation containment along with the social and industrial infrastructure improvement. It is also responsible for forecasting the key economy indicators. The Ikeda plan generally consists of independent economy adapted for reaching the certain goals mostly based on the Japan's foreign commerce. The 10-year plan was exceeded in the indicators like GNP annual growth that actually resulted at 11% whether 7.2% was planned; economic social development was at 10.6% which is higher than 8.2% planned.

The purposes of five-year plan adopted in 1988, were to support real GNP growth at 3.8% per year, restrain the inflation, keep low unemployment (2.5% per year) and increase the quality of life by means of a shorter work week and stabilized property prices.

In spite of it, the economy's downturn was mentioned after 1992. Some analysts compare it to 1974 recession in its hardness. Among the main steps taken under the Initiative was a 10-year program for public infrastructure development. It included the expenditure of up to $8 trillion for the construction or restoration of bridges, roads, ports, airports, resorts, medical facilities, retirement communities, telecommunications systems, many more. Real growth reached mark of 1% a year by the 1990s. Besides of it, one of the main trading strategies of Japan is helping to create sustainable trading partners. This strategy is supposed to be guarantee for long-term development of Japanese economy.