How is the economy in Japan?

Answer 1

The economy of Japan is the second largest in the world, after the United States at $5.07 trillion in terms of nominal GDP and third after the United States and China when adjusted for purchasing power parity. The workers of Japan rank 18th in the world in GDP per hour worked as of 2006. The Big Mac Index shows that the wages in Tokyo are the highest among principal cities in the world.

For three decades, Japan experienced rapid economic growth, which was referred to as the Japanese post-war economic miracle. With average growth rates of 10% in the 1960s, 5% in the 1970s, and 4% in the 1980s Japan was able to establish itself as the world's second largest economy. However, in the second half of the 1980s sliding stock and real estate prices caused the Japanese economy to overheat in what was later to be known as the Japanese asset price bubble. The bubble economy came to an abrupt end as the Tokyo Stock Exchange crashed in 1989. Growth in Japan throughout the 1990s was slower than growth in other major industrial nations, and the same as in France and Germany. From 4.5% per annum in the 1980s, real GDP rose just 1.5% p.a. in the 1990s and 0.8% p.a. in the 2000s. The problems of the 1990s may have been exacerbated by domestic policies intended to wring speculative excesses from the stock and real estate markets. Government efforts to revive economic growth throughout the 1990s were not very successful and when the global economy slowed in 2000-2001 the Japanese economy was in a serious economic situation. The economy began to recover under the policies of Junichiro Koizumi and revived strong growth in global trade, rising an average of 2.1% a year in 2003-07. Subsequently, the global financial crisis and a collapse in domestic demand saw the economy shrink 1.2% in 2008 and 5.0% in 2009.

A mountainous, volcanic island country, Japan has inadequate Natural Resources to support its growing economy and large population. Although many kinds of minerals were extracted throughout the country, most mineral resources had to be imported in the postwar era. Local deposits of metal-bearing ores were difficult to process because they were low grade. The nation's large and varied forest resources, which covered 70 percent of the country in the late 1980s, were not utilized extensively. Because of political decisions on local, prefectural, and nation levels, Japan decided not to exploit its forest resources for economic gain. Domestic sources only supplied between 25 and 30 percent of the nation's timber needs. Agriculture and fishing were the best developed resources, but only through years of painstaking investment and toil. The nation therefore built up the manufacturing and processing industries to convert raw materials imported from abroad. This strategy of economic development necessitated the establishment of a strong economic infrastructure to provide the needed energy, transportation, communications, and technological know-how.

Deposits of gold, magnesium, and silver meet current industrial demands, but Japan is dependent on foreign sources for many of the minerals essential to modern industry. Iron ore, copper, and bauxite must be imported, as well as many forest products.

Answer 2

Japan has a Market Economy