Economy

Overview

Japan's economy is one of the biggest and strongest in the world. It is known for its exports of electronic goods, computers, automobiles and increasingly, entertainment such as video games and animated films. Japan also plays a key role in global shipbuilding, robotics, aerospace technology and telecommunications. It is the second biggest national economy in the world - trailing only the US - in terms of gross domestic product.

Japan's imports largely consist of raw materials, something the country is not blessed with. It imports food, oil and other raw material mainly from other Asian countries and the US.

Recent Years

Japan has shown signs of economic robustness recently after stumbling through a decade or so of slow growth. Yet the economy is not likely to return to its juggernaut days of the late 1980s and early 1990s, known as the bubble years. This was a period of extremely fast growth that led directly to the economic malaise of the 1990s.

Today, Japan's economy faces its biggest challenge in the country's rapid aging. National news is filled with stories about health care for the elderly, pension systems and social welfare programs. As the country grays, the economy changes apace, with more businesses opening in the health-care field and some engineers coming up with ways for robots to help care for the elderly.

At the same time, Japan's high-tech entertainment industry is one of the economy's most promising sectors. Much of the world's game consoles and video games come from Japan, and there is a growing global following of Japan's animated films. The country still boasts some of the world's most sophisticated cell phones as well.

In the automotive industry, Toyota is on the cusp of being the world's biggest carmaker and is one of the world's largest companies. Prospects for Japanese automakers such as Toyota and Honda are bright in part because they beat many of their rivals to market with the increasingly popular hybrid cars that cut down on greenhouse gases and because their cars are seen as being reliable.

Other strong industries in Japan include the real estate, distribution, construction and services sectors.

Currency

The Japanese currency is the yen.
While many places in Japan's urban centers accept credit cards, Japan is still much more of a cash-based society than the US and Europe. The 10,000 yen note (about $80 at the time of this writing) is in wide circulation, and people frequently carry the equivalent of a couple of hundred euros or dollars in cash on them.

However, recently smart cards are being used at train stations and convenience stores. These cards are like gift cards that can be swiped over a train turnstile or a card reader at a storefront to speed up purchases. Many people use them to commute to and from work, and thus avoid the lines at the ticket dispensers. The trend toward electronic money is under way in Japan, and large firms such as Sony and NTT are pushing to make the practice more widespread.