Main contents start here
Statistical Handbook of Japan 2018
Chapter 1 Land and Climate (PDF:3,716KB)
1. Land
Japan is an island nation situated off the eastern seaboard of the Eurasian continent in the northern hemisphere. The islands form a crescent-shaped archipelago stretching from northeast to southwest parallel to the continental coastline with the Sea of Japan in between. The land is located between approximately 20 to 45 degrees north latitude and between approximately 123 to 154 degrees east longitude. It consists of the main islands of Hokkaido, Honshu, Shikoku, Kyushu and Okinawa, and more than 6,800 smaller islands of varying sizes. Its surface area totals approximately 378,000 square kilometers.
Since the Japanese archipelago is located in a zone of the newest tectonic plate movement, it is particularly prone to various physiographical phenomena. Therefore, the number of earthquakes in the country is quite high, and so is the proportion of active volcanoes. The land is full of undulations, with mountainous regions including hilly terrain accounting for about three-quarters of its total area. The mountains are generally steep and are intricately carved out by ravines. Hilly terrain extends between the mountainous regions and the plains.
As of 2014, forestland and fields account for the largest portion of the nation's surface area. There are approximately 254,000 square kilometers of forestland and fields (which equates to 67 percent of the nation's surface area), followed by approximately 45,000 square kilometers of agricultural land (12 percent). Together, forestland, fields and agricultural land thus cover approximately 80 percent of the nation. There are approximately 20,000 square kilometers of developed land (5 percent).
2. Climate
The Japanese archipelago has a temperate marine climate. Though they may differ depending on the effects of seasonal winds and ocean currents, the changes in the four seasons are distinct. The topography of Honshu, however, features a series of major mountain ranges running from north to south. Because of this feature, the northwest monsoon in the winter brings humid conditions with heavy precipitation (snow) to the Sea of Japan side of Honshu but comparatively dry weather with low precipitation to the Pacific Ocean side. In summer, the winds blow mainly from the southeast, giving rise to hot and humid weather. Another unique characteristic of Japan's climate is that it has two long spells of rainy seasons, one in early summer when the southeast monsoon begins to blow, and the other in autumn when the winds cease. From summer to autumn, tropical cyclones generated in the Pacific Ocean to the south develop into typhoons and hit Japan, sometimes causing storm and flood damage.
Chapter 2 Population (PDF:3,716KB)
1. Total Population
Japan's total population in 2017 was 126.71 million. This ranked eleventh in the world and made up 1.7 percent of the world's total. Japan's population density measured 340.8 persons per square kilometer in 2015, ranking eleventh among countries or areas with a population of 10 million or more.
From the eighteenth century through the first half of the nineteenth century, Japan's population remained steady at about 30 million. Following the Meiji Restoration in 1868, it began expanding in tandem with the drive to build a modern nation-state. In 1926, it reached 60 million, and in 1967, it surpassed the 100 million mark. However, Japan's population growth has slowed in more recent years, with the rate of population change about one percent from the 1960s through the 1970s. Since the 1980s, it has declined sharply. Japan's total population was 127.09 million according to the Population Census in 2015. This was a decrease by 962,607 people as compared to the previous Census (2010), indicating the first population decline since the initiation of the Population Census in 1920. In 2017, it was 126.71 million, down by 227,000 from the year before.
2. Households
(1) Household Size and Household Composition
The Population Census shows that Japan had 53.33 million private households (excluding "institutional households" such as students in school dormitories) in 2015, showing a consistent increase since the initiation of the Census. Of that total, 55.9 percent were nuclear-family households, and 34.6 percent were one-person households.
From the 1920s to the mid-1950s, the average number of household members remained at about five. However, due to the increase in one-person households and nuclear families since the 1960s, the average size of households was down significantly in 1970, to 3.41 members. The number of household members has continued to decline, dropping to 2.33 in 2015. Although the Japanese population has shifted into decline, the number of households is expected to continue to increase for some years to come, as the size of the average household will shrink at a slow pace. The number of households is projected to peak in 2023 and then decrease thereafter.
(2) Elderly Households
The number of elderly households (private households with household members 65 years of age or over) in 2015 was 21.71 million. They accounted for 40.7 percent of private households. There were 5.93 million one-person elderly households. Among these, there were approximately two times as many women as men.
3. Declining Birth Rate and Aging Population
The population pyramid of 1950 shows that Japan had a standard-shaped pyramid with a broad base. The shape of the pyramid, however, has changed dramatically as both the birth rate and death rate have declined. In 2017, the aged population (65 years and over) was 35.15 million, constituting 27.7 percent of the total population (i.e., one in every four persons) and marking a record high.
In Japan, the period when the percentage of persons aged 65 and older exceeded 10 percent was 1985, but when looking at the U.S.A. and European countries, this occurred in 1940 in France, 1950 in Sweden, 1965 in Italy, and 1975 in the U.S.A., which are all earlier than in Japan. However, in 2015, the percentage of the population 65 and older in Japan was 26.6 percent, exceeding the U.S.A. (14.6 percent), France (18.9 percent), Sweden (19.6 percent), Germany (21.1 percent), and Italy (22.4 percent), indicating that the aging society in Japan is progressing rapidly as compared to the U.S.A. and European countries.
On the other hand, in 2017, the child population (0-14 years) in Japan amounted to 15.59 million, accounting for 12.3 percent of the total population, which was the lowest level on record. In terms of their proportion of the total population, the aged (65 years and over) have surpassed the child population since 1997. The productive-age population (15-64 years) totaled 75.96 million. In share terms, it accounted for 60.0 percent of the entire population, continuing its decline since 1993. As a result, the ratio of the dependent population (the sum of aged and child population divided by the productive-age population) was 66.8 percent.
4. Births and Deaths
Population growth in Japan had primarily been driven by natural increase, while social increase played only a minor part. However, in 2005, the natural change rate (per 1,000 population) fell for the first time since 1899, and has since been on a declining trend. In 2017, the natural change rate was -3.2 and decreased for the eleventh consecutive years since 2007.
During the second baby boom, the live birth rate was at a level of 19 (per 1,000 population) between 1971 and 1973. Since the late 1970s, it has continued to fall. The rate for 2017 was 7.6.
The decline in the live birth rate may partly be attributable to the rising maternal age at childbirth. The average mothers' age at first childbirth rose from 25.6 in 1970 to 30.7 in 2017. The total fertility rate was on a downward trend after dipping below 2.00 in 1975, and reached a record low of 1.26 in 2005. The rate was on a path of recovery with an increase after that. However, the total fertility rate dropped a little to 1.43 in 2017.
The death rate (per 1,000 population) was steady at 6.0 - 6.3 between 1975 and 1987, and maintained an uptrend since 1988, reflecting the aging of the population. It reached 10.8 in 2017.
Average life expectancy in Japan climbed sharply after World War II, and is today at the highest level in the world. In 2016, the life expectancy at birth was 87.1 years for women and 81.0 years for men. Setting a new all-time record for both genders.
5. Marriages and Divorces
The annual number of marriages in Japan exceeded 1 million couples in the early 1970s, which, coupled with the marriage rate (per 1,000 population) hovering over 10.0, showed an apparent marriage boom. However, both the number of couples and the marriage rate started declining thereafter. They rose again in the late 1980s, but in recent years, they have been on a declining trend in general. In 2017, 606,863 couples married, and the marriage rate was 4.9.
The mean age of first marriage was 31.1 for men and 29.4 for women in 2017. These were the same ages for both men and women as the previous year. The mean age of first marriage for men rose by 2.6 years, while that of women rose by 2.8 years over the past 20 years. (in 1997: grooms, 28.5; brides, 26.6). In addition, there has been an increasing trend in the percentage of lifetime non-marriages, reaching 23.4 percent for males and 14.1 percent for females in 2015, the highest percentages ever. The declining marriage rate, rising marrying age and increased choice of unmarried life in recent years as described above is one explanation for the dropping birth rate.
In contrast, divorces have shown an upward trend since the late 1960s, hitting a peak of 289,836 couples in 2002. Subsequently, both the number of divorces and the divorce rate have been declining since 2003. In 2017, the number of divorces totaled 212,262 couples, and the divorce rate (per 1,000 population) was 1.70.
6. Population Density and Regional Distribution
(1) Population Density
In 2015, Tokyo Metropolis had the largest population of 13.52 million among Japan's 47 prefectures, followed in decreasing order by the prefectures of Kanagawa, Osaka, Aichi, and Saitama. These five prefectures each had a population of 7 million or more, and together accounted for 36.4 percent of the total population.
In addition, the population density in Tokyo Metropolis was the highest among Japan's prefectures, at 6,168.7 persons per square kilometer. This was almost 18.1 times the national average (340.8 persons per square kilometer).
In 2015, there were 12 cities in Japan with a population of 1 million or more. Their total population topped 29 million, a figure equivalent to 23.2 percent of the national total. The largest single city was the 23 Cities of Tokyo Metropolis, with 9.27 million citizens. It was followed in decreasing order by Yokohama City (3.72 million), Osaka City (2.69 million), and Nagoya City (2.30 million).
(2) Population Distribution
The percentage of the urban population started increasing in the late 1950s. In 2015, 51.9 percent of the total population was concentrated in the three major metropolitan areas: the Kanto, Chukyo, and Kinki major metropolitan areas. Population density in the Kanto major metropolitan area was 2,771 persons per square kilometer. In the Chukyo major metropolitan area, it was 1,288 persons per square kilometer, and in the Kinki major metropolitan area, it was 1,459 persons per square kilometer.
Chapter 3 Economy (PDF:3,716KB)
1. Economic Development
During the 1960s, Japan's economy grew at a rapid pace of over 10 percent per annum. This rapid economic growth was supported by: (i) the expansion of private investments in plant and equipment, backed by a high rate of personal savings; (ii) a large shift in the working population from primary to secondary industries and "an abundant labour force supplied by a high rate of population growth"; and (iii) an increase in productivity brought about by adopting and improving foreign technologies.
In the 1970s, the sharp increase of Japan's exports of industrial products to the U.S.A. and Europe began to cause international friction. In 1971, the U.S.A. announced it would end the convertibility of the dollar into gold. In December 1971, Japan revalued the yen from 360 yen against the U.S. dollar, which had been maintained for 22 years, to 308 yen. In February 1973, Japan adopted a floating exchange-rate system.
In October 1973, the fourth Middle East War led to the first oil crisis, triggering high inflation. Accordingly, Japan recorded negative economic growth in 1974 for the first time in the post-war period. Following the second oil crisis in 1978, efforts were made to change Japan's industrial structure from "energy-dependent" to "energy-saving", enabling Japan to successfully overcome inflation.
In the 1980s, the trade imbalance with advanced industrial countries expanded because of the yen's appreciation. As part of administrative and financial reforms, Japan National Railways and Nippon Telegraph and Telephone Public Corporation were privatized. As a result, domestic demand-led economic growth was achieved.
2. Bubble Economy and Its Collapse
At the end of the 1980s, Japan's economy enjoyed favorable conditions, with stable wholesale prices and a low unemployment rate. Corporate profits were at their highest level in history, and corporate failures were at their lowest level, while investments in plant and equipment for manufacturing products, such as semiconductors, were very active. Stock and land prices continued to rise rapidly, and large-scale urban developments and resort facility developments in rural areas progressed at a very fast pace. However, excessive funds flowed into the stock and real estate markets, causing abnormal increases in capital asset values (forming an economic bubble).
At the end of 1980, Japan's net worth (national wealth) stood at 1,363 trillion yen, 5.6 times the GDP. It then increased, reaching 3,531 trillion yen, 8.0 times the GDP, at the end of 1990, owing to increasing land and stock prices. After that, due to the collapse of the bubble economy, the national wealth decreased, and though there were fluctuations, continued on a downward trend. At the end of 2016, it was 3,351 trillion yen.
At the beginning of 1990, stock prices plummeted, followed by sharp declines in land prices. This marked the start of major economic recession (collapse of the bubble economy). Japan's financial and economic systems, which were excessively dependent on land, consequently approached collapse.
Massive bad debts were created in financial institutions' loan portfolios, as corporate borrowers suffered serious losses due to declining land prices. As a result, shareholders' equity in financial institutions shrank. In 1997, large banks began to fail. In 1998 and 1999, the government injected public money into the banking sector to stabilize the financial system.
The Japanese economy began to make a moderate recovery in February 1999. This, however, was only a temporary phenomenon, as investments in plant and equipment were weak and the economy was too dependent on foreign demand and information and communication technologies. With the global decline in IT demand from mid-2000, Japan's exports to Asia dropped, necessitating adjustments of excess inventory and production facilities. In line with this, the Japanese economy again entered into an economic downturn in 2001.
Through the economic recovery starting at the beginning of 2002, the corporate sector, centering on export-related industries, became favorable based on a reflection of the steady recovery of the global economy, and shifted mainly with a bullish tone up until mid-2007.
3. Recent Economic Trends
At the start of 2008, the Japanese economy was faced with a standstill in its path to recovery as private consumption and investments in plant and equipment fell flat and so did production. This occurred against the backdrop of soaring crude petroleum and raw material prices and repercussions from the American subprime mortgage loan problem that, since mid-2007, rapidly clouded future prospects for the world economy further. In addition, the bankruptcy of the major American securities firm Lehman Brothers in September 2008 led to a serious financial crisis in Europe and the U.S.A. Japan was also affected by the yen's rise and the sudden economic contraction in the U.S.A. and other countries. Declining exports contributed to a large drop in production and a sharp rise in unemployment.
Subsequently, the Japanese economy recovered with foreign demand and economic measures after April 2009, and came to a standstill starting around October 2010. In early 2011, however, it began to rally. The Great East Japan Earthquake that took place on March 11, 2011, and the nuclear power plant accident it caused weakened the economic recovery.
In order to achieve an early end to deflation and break free of economic stagnation, in January 2013, the government set forth its "three-arrows" strategy (also known as "Abenomics").
The first "arrow" is "aggressive monetary policy". The Bank of Japan (BOJ) made it clear that it would set a consumer price index annual growth rate of two percent as a "price stabilization target". The BOJ also introduced "quantitative and qualitative monetary easing" to double the monetary base over two years.
The second "arrow" is "flexible fiscal policy". An emergency economic stimulus package with a scale of approximately 10 trillion yen was developed.
The third "arrow" is "growth strategy that promotes private investment". Efforts are being made in growth strategies such as encouraging investments by private corporations based on the easing of regulations.
Under such approaches, the profits of companies shifted at high levels, and the employment and income environment improved and continued a moderate recovery. The latest economic recovery is thought to be in the process of continuation after bottoming out in November 2012. As the Japanese economy moves out of a deflation through approaches based on financial, monetary and growth policies, fiscal consolidation has been progressing and primary deficit has been shrinking, such as by centering on increased tax revenue, etc.
4. Industrial Structure
Japan's industrial structure has undergone a major transformation over the half century since the end of World War II. The chronological changes in the industrial structure during this period by industry share of employed persons and GDP show that shares in the primary industry in particular have fallen dramatically since 1970, when Japan experienced rapid economic growth. During the 1980s, the secondary industry's share of employed persons and GDP also began to decline gradually. On the other hand, the tertiary industry's shares of both employed persons and GDP have risen consistently.
In 1970, the primary industry accounted for 19.3 percent of employed persons, the secondary industry for 34.1 percent, and the tertiary industry for 46.6 percent. In 2015, the corresponding shares of these three sectors were 4.0 percent, 25.0 percent and 71.0 percent, respectively.
As for GDP by type of economic activity, in 1970, the primary, secondary and tertiary industries accounted for 5.9 percent, 43.1 percent and 50.9 percent, respectively. In 2015, these figures for the primary, secondary and tertiary industries were 1.1 percent, 26.5 percent and 72.4 percent, respectively.
According to the "2016 Economic Census for Business Activity", there were 5.6 million establishments (excluding businesses whose operational details are unknown, national government services, and local government services) in Japan, at which a total of 56.9 million persons were employed. The average number of persons engaged per establishment was 10.6 establishments with less than 10 persons accounted for 77.3 percent of the total.
The number of establishments by the major groupings of the Japan Standard Industrial Classification was the most numerous in the "wholesale and retail trade" category, numbering 1.4 million, followed by "accommodations, eating and drinking services" and "construction". In terms of the number of persons engaged, establishments in the "wholesale and retail trade" ranked first as they employed 12.0 million persons, followed by "manufacturing" and "medical, health care and welfare".
The domestic manufacturing industry has progressed in relocating production bases overseas, stemming from approaches to cutting back on production costs, production in consumption areas, and fluctuations in exchange rates.
According to the Ministry of Economy, Trade and Industry's "Survey of Overseas Business Activities", which surveys Japanese companies that have local affiliates overseas, the number of overseas affiliates in the manufacturing industry was 10,919 companies at the end of fiscal 2016, and the overseas production ratio was 23.8 percent in actual performance in fiscal 2016, indicating a 1.5 percentage point decrease as compared to the previous fiscal year, a decrease for the first time in five years.
In the future, it is anticipated that companies in the manufacturing industry in Japan will expand their overseas business. There are many companies that are planning on expanding their business to China, India, Vietnam and Thailand.
Chapter 4 Finance (PDF:3,716KB)
1. National and Local Government Finance
(1) National Government Finance
Japan's fiscal year starts in April, and ends in March of the following year. In setting the national budget, the government submits a proposed budget for the upcoming fiscal year to the Ordinary Session of the Diet, which begins in January. The proposal is then discussed, and an initial budget is approved usually before the fiscal year begins in April. In the event that the Diet does not approve the budget by the end of March, an interim budget comes into effect. The interim budget is effective from the beginning of April until such time when the proposed budget is approved. If it becomes necessary to amend the budget in the course of a fiscal year, the government submits a supplementary budget for Diet approval.
Japan's national budget consists of the general account budget, special account budgets, and the budgets of government-affiliated agencies. Using revenues from general sources such as taxes, the general account covers core national expenditures such as social security, public works, culture/education/science, and national defense.
Special accounts are accounts established for the national government to carry out projects with specific objectives, and are managed and administered independently of the general account. The number and particulars of special accounts change from year to year; for fiscal 2018, a total of 13 special accounts have been established, including the national debt consolidation fund, the local allocation tax and local transfer tax, and the reconstruction from the Great East Japan Earthquake.
Government-affiliated agencies are entities established by special laws and are entirely funded by the government. Currently, the Japan Finance Corporation, the Okinawa Development Finance Corporation, Japan Bank for International Cooperation, and the Japan International Cooperation Agency (Finance and Investment Account) are operated as government-affiliated agencies.
In national government finance, expenditure has continued to surpass revenue. Since fiscal 2008 in particular, the worsening economy has decreased tax revenue, contributing to an increasing gap between revenue and expenditure. Since fiscal 2009, bond issues have exceeded tax revenue in most years, but since fiscal 2013, tax revenue exceeded borrowing (on an initial budget basis).
The size of the general account budget for fiscal 2018 was 98 trillion yen, an increase of 0.3 trillion yen (0.3 percent) from the initial budget of fiscal 2017. This is equivalent to 17.3 percent of the fiscal 2018 GDP, forecasted by the government at 564 trillion yen.
In fiscal 2018, major expenditures from the initial general account budget include social security (33.7 percent), national debt service (23.8 percent), local allocation tax grants, etc. (15.9 percent), public works (6.1 percent), education and science (5.5 percent), and national defense (5.3 percent).
With regard to revenue sources for the fiscal 2018 initial general account budget, income tax, consumption tax and corporation tax account for 50.0 percent. Even with the addition of other taxes and stamp revenues, these revenue sources only amount to 60.6 percent of the total revenue.
(2) Local Government Finance
There are two budget categories in local government finance: the ordinary accounts and the public business accounts. The former covers all kinds of expenses related to ordinary activities of the prefectural and municipal governments. The latter covers the budgets of independently accounted enterprises such as public enterprises (water supply and sewerage systems, hospitals, etc.), the national health insurance accounts, and the latter-stage elderly medical care accounts.
While expenditures such as defense expenses are administered solely by the national government, a large portion of expenditures that directly relate to the people's everyday lives are disbursed chiefly through local governments. In particular, a high proportion of the following expenditures are disbursed through local governments: public hygiene and sanitation expenses, which include areas such as medical service and garbage disposal; school education expenses; judicial, police and fire services expenses; and public welfare expenses, which cover the development and management of welfare facilities for children, the elderly and the mentally and/or physically challenged.
The revenue composition of local governments usually remains almost the same each fiscal year, while their budget scale and structure vary from year to year. The largest portion of fiscal 2016 (net) revenues came from local taxes, accounting for 38.8 percent of the total. The second-largest source, 17 percent, was local allocation tax grants.
(3) National and Local Government Finance
Finance refers to revenue and expenditure of administrative services from national and local governments. In the initial budget for fiscal 2017, the gross total of national government expenditure was 493 trillion yen, the net total was 242 trillion yen after eliminating duplications. Furthermore, the local public finance plan, which consists of the estimated sum of ordinary accounts for the following fiscal year for all local governments, amounted to 88 trillion yen. Therefore, after eliminating duplications between national and local accounts (34 trillion yen), the net total of both national and local government expenditures combined was 296 trillion yen.
The settlement amount for fiscal 2016, the net total of national and local government expenditures was 168 trillion yen. The national government disbursed 42.2 percent of this amount, while the local governments disbursed 57.8 percent.
A function-by-function breakdown of expenditures "directly related to people's lives" showed that social security expenditure accounted for the largest portion (34.4 percent), followed by public bonds (20.6 percent), education (11.7 percent), general administration (11.4 percent), and then land preservation and development (10.4 percent). Public bonds are issued to compensate for shortages of national and local revenues. Their issue volumes have increased mainly due to, for example, economic stimulus measures and decreasing tax revenues after the bubble economy ended at the beginning of 1990. A rising amount of public bond redemptions and an increase in social security expenditures associated with the progression of an aging society in recent years has resulted in public bonds and social security expenditures making up a high percentage of net total government expenditures. Issuance of government bonds increased after fiscal 2009 in comparison to years leading up to then, due to the effects of the bankruptcy of Lehman Brothers, but has decreased in recent years.
Japan's ratio of outstanding general government debt to GDP, a stock measure in a fiscal context, has been increasing rapidly as compared to major industrial countries due to a steady advance of fiscal consolidation in the second half of 1990s, and is now the worst among major industrial countries.
(4) Tax
Taxes consist of national tax (income tax, corporation tax, etc.), which is paid to the national government, and local tax, which is paid to the local government of the place of residence. The ratio of taxation burden, which is the ratio of national and local taxes to national income, was 18.3 percent in fiscal 1975. This ratio gradually increased thereafter, reaching 27.7 percent in fiscal 1989. The ratio subsequently decreased due to the decline in tax revenue arising from the recession that ensued after the bubble economy ended, reaching 20.6 percent in fiscal 2003. In fiscal 2015, it was 25.5 percent in terms of national and local taxes combined (15.4 percent for national tax and 10.1 percent for local tax). Japan's ratio is lower in comparison with other major industrial countries. However, the consumption tax rate was raised from five to eight percent on April 1, 2014. This was the first increase in 17 years. Hereafter, there is a possibility that the taxation burden will become heavier due to an increase in welfare and pension-related spending as the population ages.
2. Bank of Japan and Money Stock
As the central bank, the Bank of Japan (i) issues Bank of Japan notes, or the currency of Japan; (ii) manages and stores treasury funds and provides loans to the government; (iii) provides deposit and loan services to general financial institutions; and (iv) implements monetary policies by adjusting the level of money stock to promote the sound development of the economy.
At the end of 2017, currency in circulation totaled 112 trillion yen (106.7 trillion yen in Bank of Japan notes and 4.8 trillion yen in coins), up 4.0 percent from the year before.
The Bank of Japan compiles and publishes statistics on the following indices: (i) M1, or currency in circulation plus deposit money deposited at depository institutions; (ii) M2, or currency in circulation plus deposits deposited at domestically licensed banks, etc.; (iii) M3, or M1 plus quasi-money plus CDs (certificates of deposit); and (iv) broadly-defined liquidity, which covers a broad range of liquidity, including government securities. The average amounts outstanding money stock in 2017 was 712 trillion yen in M1 and 974 trillion yen in M2.
In January 2013, the government and the Bank of Japan decided to strengthen policy coordination in order to overcome deflation and achieve sustainable economic growth with stable prices. In April 2013, the Bank of Japan changed the operating target for money market operations from the uncollateralized overnight call rate to a monetary base to facilitate quantitative easing. The Bank of Japan first introduced Quantitative and Qualitative Monetary Easing (QQE) in April 2013; in January 2016, it decided to introduce "QQE with a Negative Interest Rate". In September 2016, the Bank decided to introduce "QQE with Yield Curve Control" by strengthening these two policy frameworks, in order to achieve the price stability target at the earliest possible time.
Japan's monetary base is the amount of currency supplied by the Bank of Japan. It is the combined total of banknotes in circulation, coins in circulation, and current account balances. The monetary base was 498.3 trillion yen as of the end of April 2018, up 7.8 percent from the same month of the previous year, and setting a new record high.
3. Financial Institutions
In addition to the Bank of Japan, Japan's financial system is comprised of private and public financial institutions. Private financial institutions include those that accept deposits (banks, credit depositories, agricultural cooperatives, etc.) and those that do not (securities companies, insurance companies, etc.).
In the course of the financial system reform, mergers and restructuring progressed among major banks, resulting in their being reorganized into three major financial groups. Regional banks and credit depositories operating in their respective regions have been making efforts to their expand operations bases through corporate mergers. In September 2017, the number of offices, including the branches of financial institutions operated domestically, post offices handling postal savings had the largest network with 24,052 offices. This was followed by domestically licensed banks, including city banks and regional banks, with a combined total of 13,567 offices and branches.
The fundamental role of the bank sector was to adjust the surplus and deficiency of funds, but as the corporate sector has been in a surplus in recent years in Japan, the percentage of loans to bank funds has been on a downward trend almost consistently. The decline in percentage of national debt and increase in deposits in recent years are thought to be a result of the Bank of Japan buying national debt owned by banks due to the abovementioned monetary easing policy.
4. Financial Assets
The Flow of Funds Accounts Statistics, which is a comprehensive set of records of financial transactions, assets and liabilities, indicates that financial assets in the domestic sectors totaled 7,524 trillion yen according to figures at the end of March 2017. Of these assets, those of the domestic nonfinancial sector were 3,628 trillion yen. The household sector (including the business funds of individual proprietorships) had assets of 1,808 trillion yen, in the forms of deposits, stocks and other financial assets. In Japan, the household sector holds more than 50 percent of its financial assets in currency and deposits.
5. Stock Market
Stock prices in Japan rose sharply in the second half of the 1980s, spearheading the bubble economy. However, the stock market started to fall in 1990 ahead of land prices. At the end of 1989, the total market capitalization of the first section of the Tokyo Stock Exchange was 591 trillion yen, but only three years later, at the end of 1992, it had dropped by more than 50 percent to 281 trillion yen. Even after recovering to 442 trillion yen at the end of 1999, the stock market repeatedly fell and rose afterwards. The September 2008 the bankruptcy of Lehman Brothers led to a fall in total market capitalization, which amounted to 251 trillion yen at the end of 2011. Since 2012, the total market capitalizaion has turned upward due to the effects of various measures including a comprehensive economic policy package called Abenomics.
In 2012, the high yen in Japanese economy was corrected due to expectations toward anti-deflationary economic and fiscal policies by the new government, and share prices soared. In April 2013, changes in policies of the Bank of Japan were regarded as affecting stocks and markets, and the Nikkei Stock Average at the end of 2013 was 16,291.31 yen, representing an increase of 56.7 percent as compared to the end of 2012 (10,395.18 yen) and the first significant gain in 41 years. Afterwards, the Nikkei Stock Average in April 2015 recovered to the 20,000 yen level for the first time in 15 years and stood at 22,764.94 yen at the end of 2017.
At the end of March 2017, the total number of individual stockholders (individuals of Japanese nationality and domestic groups without corporate status) in possession of stocks listed on the Tokyo/Nagoya/Fukuoka/ Sapporo Stock Exchanges totaled 49.7 million. In terms of value, the ratio of stocks they possessed was 17.1 percent, and falling to a new low. The ratio of Japanese stocks held by foreign investors (total of corporations and individuals) was 30.1 percent in terms of value, and was back to the level over three tenth for the first time in two years.
A survey conducted of 260 securities firms by the Japan Securities Dealers Association (JSDA) showed that 27.7 percent of those companies offered Internet trading at the end of September 2017. Internet trading thus accounted for 20.6 percent of the total value of stock brokerage transactions from the period of April 2017 to September 2017.
Chapter 5 Agriculture, Forestry, and Fisheries (PDF:3,716KB)
1. Overview of Agriculture, Forestry, and Fisheries
Over the course of Japan's economic growth, its agricultural, forestry and fishing industries employ fewer and fewer workers every year, and their GDP share has also dropped. The number of workers decreased from 13.40 million in 1960 (30.2 percent of the total workforce) to 2.23 million in 2016 (3.4 percent), and the GDP share of the industries fell from 12.8 percent in 1960 to 1.2 percent in 2016.
2. Agriculture
(1) Agricultural Production
Japan's total agricultural output in 2016 was 9.20 trillion yen, up 4.6 percent from the previous year. Crops yielded 5.98 trillion yen, up 6.3 percent from the previous year.
(2) Farmers and Farmland
In 2015, the number of farm households engaged in commercial farming (which refers to households with cultivated land under management of 0.3 hectares and over, or with annual sales of agricultural products amounting to 500,000 yen or more) was 1.33 million. Of these commercial farm households, 33.3 percent were full-time farm households, 12.4 percent were part-time farm households with farming income exceeding non-farming income, and 54.3 percent were part-time farm households with non-farming income exceeding farming income.
Of the commercial farm household members, 2.10 million people were engaged in farming as their principal occupation (commercial farmers) in 2015, of whom 63.5 percent were aged 65 years and over.
In 2016, the total income per commercial farm household was 5.21 million yen, up 5.1 percent from the previous year. Of that amount, 1.85 million yen was from farming income, 1.40 million yen from non-farming income, and 1.95 million yen from pension benefits and other sources.
Japan's cultivated acreage shrank year after year from 6.09 million hectares in 1961 to 4.44 million hectares in 2017. In the one-year period of 2017, there were 6,060 hectares of new cultivation but also a 32,500-hectare decrease. The most common cause for the decrease was degraded farmland, accounting for approximately 60 percent of all cases.
3. Forestry
Japan's forest land area is 25.08 million hectares (approximately 70 percent of the entire surface area of the country). Of this, natural forests account for 54 percent while planted forests, most of which are conifer plantations, make up 41 percent. Meanwhile, Japan's forest growing stock is 4,901 million cubic meters, of which 3,042 million cubic meters are from planted forests.
The growing stock of Japan's forest has increased, centering on planted forests on deforested sites right after World War II and during the period of rapid growth. Such forests are in a period of full-scale use as resources. From the perspectives of effective use of forest resources, proper development of preservation and multi-faceted functions of forests, and promotion of forestry industry and of mountainous areas, the use of domestic wood is being promoted through the use of timber in housing, public buildings, etc., energy use as woody biomass, and through PR and popularization activities to expand timber use.
Domestic wood supply (log conversion) totaled 22.4 million cubic meters in 2016, which is equivalent to about 40 percent of the peak in 1967 (52.7 million cubic meters). In 2016, Japan's self-sufficiency rate for lumber was 31.1 percent. Currently, Japan depends mostly on imported lumber for pulp, woodchip, and plywood materials.
Although the number of workers engaged in forestry has declined due to a slowdown in domestic lumber production activities, the pace of decline has slackened in recent years. In 2015, there were 63,663 workers engaged in forestry, approximately one out of five workers was aged 65 and over, highlighting the aging of the labour force. Meanwhile, there has been an increase in the number of new young workers, which is lifting the average age of workers engaged in forestry.
4. Fisheries
(1) Fishery Production
In Japan, a country surrounded by the ocean, the fishing industry has been developing since ancient times, and has contributed greatly to the lives of the Japanese, not only in economic terms, but also in promoting a food culture that is boasted to the world as Washoku. However, in recent years, the consumption of seafood has decreased due to changes in the environment surrounding food in Japan.
Japan's fishery output has been on the decline since 1989. Its 2017 fishery production totaled 4.30 million tons. Of this, marine fishery and aquaculture production amounted to 4.24 million tons.
(2) Fishery Workers
The number of workers in the marine fishery industry (the workers who engage in work at sea for 30 days or more yearly) has been decreasing constantly. In 2017, there was a 4.1 percent decrease from the previous year, bringing the count to 153,490 workers. In every age group, the number of workers in the marine fishery industry decreased from the previous year.
As the aging of fishing vessels progresses and the fishery workers aging increases, fisheries have been gaining attention as a place for employment, based on the diversification of values regarding work and life, and support is also being provided for new fishery workers.
5. Self-Sufficiency in Food
Japan's food self-sufficiency rate in terms of calories, although there is a downward trend over the long term, the ratio has been fluctuating at a level of around 40 percent since fiscal 1997. Whereas the ratio was 53 percent in fiscal 1980, the ratio was 38 percent in fiscal 2016. The major reason behind the decrease in the food self-sufficiency rate is that despite a decrease in the domestic production force caused by a decline in agricultural workers, etc., diversification of the Japanese dietary life, and decline in consumption of rice, of which self-sufficiency within Japan is possible, consumption of livestock products and oils and fats, for which overseas dependence for feed and raw materials is inevitable, increased.
In fiscal 2016, the self-sufficiency rate (on an item-specific weight basis) was 100 percent for rice, 12 percent for wheat, eight percent for beans, 80 percent for vegetables, 41 percent for fruits, 53 percent for meats, and 56 percent for seafood. Although completely self-sufficient in rice, the staple food of its people, Japan relied almost entirely on imports for the supply of wheat and beans.
Japan's present food self-sufficiency rate is the lowest among major industrialized countries, and Japan is thus the world's leading net importer of agricultural products.
Chapter 6 Manufacturing and Construction (PDF:3,716KB)
1. Overview of the Manufacturing Sector
The proportion of added value produced in Japan's manufacturing sector to its nominal GDP has been around 20 percent recently, and the sector has a large ripple effect on other sectors.
In Japan, the September 2008 Lehman Brothers Bankruptcy led to a sharp drop in worldwide demand for the mainstays of Japan's manufacturing industries, namely, consumer durables such as automobiles and capital goods such as machine tools. Additionally, in 2011, the Great East Japan Earthquake, the historically high yen, and the slowing global economy contributed to sluggish domestic production. Against such background, the Japanese government announced an economic policy ("Abenomics") in January 2013, resulting in the Japanese economy shifting to a recovery. Afterwards, in April 2014, there were impacts caused by a response to last-minute demand associated with the increase in consumption tax. However, the economy has continued a gradual upward momentum, and improvements in earnings can also be seen in enterprises in the manufacturing industry.
In 2016, there were 217,601 establishments (with four or more persons engaged) in the manufacturing sector. By industry, "fabricated metal products" had the most, with 28,776 establishments (component ratio of 13.2 percent), followed by "food" with 28,239 establishments (13.0 percent) and "production machinery" with 20,651 establishments (9.5 percent).
In 2016, there were 7.50 million persons engaged, and by industry, "food" had the most, with 1.11 million persons engaged (component ratio of 14.8 percent), followed by "transportation equipment" with 1.04 million persons engaged (13.9 percent) and "fabricated metal products" with 0.58 million persons engaged (7.8 percent).
The value of manufactured goods shipments in 2015 was 313.1 trillion yen, and by industry, "transportation equipment" had the most at 64.7 trillion yen (component ratio of 20.6 percent), followed by "chemical and related products" at 28.6 trillion yen (9.1 percent) and "food" at 28.1 trillion yen (9.0 percent).
Based on the Indices on Mining and Manufacturing (2010 average=100), the production index for 2017 was 102.0, up 4.4 percent from the previous year, while shipments stood at 100.1, an increase of 3.9 percent from the year before.
2. Principal Industries in the Manufacturing Sector
This section describes the major industries in the manufacturing sector. For each industry, (a) is described by the "2016 Economic Census for Business Activity (with four or more persons engaged)", and (b) is described by the "Indices on Mining and Manufacturing" (2010 average=100).
(1) Machinery Industry
(A) Transport Equipment Industry
(a) In 2016, a total of 11,423 establishments employed 1,041,452 persons, and shipped 64.7 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 5.4 percent and 4.8 percent, respectively, from the previous year, representing their second consecutive year of increase. These increases (in both production and shipments) were due to an increase in "passenger cars", "motor vehicle parts", etc.
(B) Production Machinery Industry
(a) In 2016, a total of 20,651 establishments employed 564,958 persons, and shipped 17.8 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 11.7 percent and 11.4 percent, respectively, from the previous year, representing their first increase in two years. These increases (in both production and shipments) were due to an increase in "semiconductor and flat-panel display manufacturing equipment", "engineering and construction machinery", etc.
(C) Electrical Machinery, Equipment and Supplies Industry
(a) In 2016, a total of 9,476 establishments employed 482,552 persons, and shipped 17.4 trillion yen worth of products in 2015.
(b) In 2017, production and shipments both increased by 3.1 percent, from the previous year, representing their first increase in three years. These increases (in both production and shipments) were due to an increase in "switching devices", "household electrical machinery", etc.
(D) Electronic Parts and Devices Industry
(a) In 2016, a total of 4,535 establishments employed 381,686 persons, and shipped 14.8 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 11.2 percent and 12.8 percent, respectively, from the previous year, representing their first increase in two years. These increases (in both production and shipments) were due to an increase in "electronic parts", "integrated circuits", etc.
(E) General-purpose machinery Industry
(a) In 2016, a total of 7,336 establishments employed 306,415 persons, and shipped 10.8 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 6.1 percent and 3.0 percent, respectively, from the previous year, representing their first increase in three years. These increases (in both production and shipments) were due to an increase in "parts of general-purpose machinery", "fans, pumps and oil hydraulic equipment", etc.
(2) Chemical Industry
(a) In 2016, a total of 4,957 establishments employed 348,895 persons, and shipped 28.6 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 5.6 percent and 3.0 percent, respectively, from the previous year, representing their third consecutive year of increase. These increases (in both production and shipments) were due to an increase in "cosmetics", "plastic materials", etc.
(3) Iron and Steel Industry
(a) In 2016, a total of 4,625 establishments employed 209,748 persons, and shipped 17.8 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 2.2 percent and 2.0 percent, respectively, from the previous year, representing their first increase in three years. The increase in production was due to an increase in "hot rolled steel", "steel castings and forgings", etc. The increase in shipments was due to an increase in "cold finished steel", "metallic coated steel", etc.
(4) Fabricated Metal Products Industry
(a) In 2016, a total of 28,776 establishments employed 583,664 persons, and shipped 14.3 trillion yen worth of products in 2015.
(b) In 2017, production and shipments increased by 0.6 percent and 1.2 percent, respectively, from the previous year. This marked the first increase in production in five years, and the first increase in shipments in four years. These increases (for both production and shipments) were due to an increase in "heating and kitchen equipment", etc.
3. Construction
The construction industry, accounting for about 10 percent of both GDP and all employed persons, is one of the core industries in Japan. Construction investments at current prices had been on a declining trend after reaching a peak of 84 trillion yen in fiscal 1992, and fell to half of this peak (42 trillion yen) in fiscal 2010. Since then, they have been on a recovery trend due to such factors as the recovery from the Great East Japan Earthquake.
Construction investments in fiscal 2016 amounted to 52.5 trillion yen at current prices, up 3.2 percent compared to the previous fiscal year; they totaled 48.0 trillion yen at constant fiscal 2005 prices, up 3.3 percent from the previous fiscal year.
A breakdown of construction investment shows that building construction totaled 29.2 trillion yen (up 6.8 percent from the previous fiscal year), while civil engineering works amounted to 23.3 trillion yen (down 0.9 percent).
In terms of public and private construction investment in fiscal 2016, public investment amounted to 21.1 trillion yen (down 0.1 percent from the previous fiscal year), while private investment totaled 31.4 trillion yen (up 5.7 percent). Public investment accounted for 40.2 percent of total construction investment, while private investment accounted for 59.8 percent.
The number of new construction starts of dwellings (in the case of apartment buildings, the number of apartment units was counted) in 2017 was 0.96 million housing units (down 0.3 percent from the previous year), and saw a decline for the first time in three years. When compared according to owner occupant relations, the number of housing for rent, and housing built for sale increased, however this was because the number of owned housing decreased.
The floor space (public and private) of the entire building whose construction started in 2017 was 134.68 million square meters, up 1.3 percent compared to the previous year.
Chapter 7 Energy (PDF:3,716KB)
1. Supply and Demand
Japan is dependent on imports for 91.7 percent of its energy supply. Since experiencing the two oil crises of the 1970s, Japan has taken measures to promote energy conservation, introduce alternatives to petroleum such as nuclear power, natural gas, coal, etc., and secure a stable supply of petroleum through stockpiling and other measures. As a result, its dependence on petroleum declined from 75.5 percent in fiscal 1973 to 40.3 percent in fiscal 2010. However, since the Great East Japan Earthquake, the percentage of fossil fuels has been increasing, as a substitute for nuclear power as fuel for power generation. The level of dependence on petroleum, which had been on a declining trend in recent years, increased to 44.5 percent in fiscal 2012. However, it is once again on a declining trend as the switch to LNG power and renewable energy progresses.
In fiscal 2016, the domestic supply of primary energy in Japan was 19,836 petajoules, down 0.9 percent from the previous fiscal year. Its breakdown was: 39.7 percent in petroleum, 25.4 percent in coal, 23.8 percent in natural gas, 3.3 percent in hydro power, and 0.8 percent in nuclear power. Other sources were also used, including energy from waste, geothermal, and natural energy (photovoltaic, wind power, biomass energy, etc.).
Energy units
Joule (J) is employed as a common unit (International System of Units: SI) for energy across all energy sources in presenting international statistical information. The unit Petajoule (PJ: 1015 or quadrillion joules) is used here to reduce the number of digits. The energy of one kiloliter of petroleum is calculated using the following formulae:
| 1 kiloliter of petroleum | = | 3.87 1010 joules |
| 1 gigajoule | = | 109 joules |
| 1 petajoule | = | 1015 joules |
| 1 exajoule | = | 1018 joules |
Petroleum is traded internationally using the volume unit of barrels. One barrel equals approximately 158.987 liters.
The government has been working to construct a new energy supply-demand structure oriented toward stable supply of energy and lowering energy costs. In this process, energy-saving and renewable energy that takes global warming into consideration has been introduced, and aims are being made toward reducing dependency on nuclear power.
Energy consumption per GDP is lower in Japan than in other industrialized countries. This indicates that Japan is one of the most energy-efficient countries in the world.
Energy consumption in Japan increased from the 1970s to 1990s, during which there were two oil shocks and a decrease in crude oil prices. However, in the 2000s, as crude oil prices rose again, final energy consumption peaked in fiscal 2004, and then started decreasing. In fiscal 2016, real GDP was higher than in fiscal 2015, but final energy consumption decreased.
Final energy consumption in fiscal 2016 decreased 1.3 percent from the previous fiscal year, and even by sector, it has decreased in the industry sector, commercial industry sector, and transportation sector.
2. Electric Power
Approximately half of Japan's primary energy supply of petroleum, coal and other energy sources is converted into electric power.
Electricity output (including in-house power generation) in Japan totaled 998 billion kWh in fiscal 2016, down 2.6 percent from the previous fiscal year. Of this total, thermal power accounted for 87.9 percent; hydro power, 8.5 percent; nuclear power, 1.7 percent.
3. Gas
Gas production was 1,423 petajoules in fiscal 2016, up 3.7 percent from the previous fiscal year. Of this total, natural gas plus liquefied natural gas (LNG) accounted for 96.8 percent; and the remaining 3.2 percent was made up of petroleum gases, such as volatile oil and liquefied petroleum gas. Gas purchases for fiscal 2016 totaled 245 petajoules.
Gas sales for fiscal 2016 totaled 1,578 petajoules, or a year-on-year growth of 4.0 percent. Of this total, 55.6 percent was sold to industry, 24.9 percent to residential use, and 11.4 percent to the commercial sector.
Chapter 8 Science and Technology/Information and Communication (PDF:3,716KB)
1. Science and Technology
(1) Researchers and R&D Expenditures
Japan's expenses for the research and development (R&D) of science and technology are at a top level among major countries, and support the technology-based nation of Japan. Researchers in the fields of science and technology (including social sciences and humanities) as of the end of March 2017 totaled 853,700. The total R&D spending in fiscal 2016 amounted to 18.4 trillion yen, a decrease of 2.7 percent from the previous fiscal year. Relative to GDP, R&D spending was 3.42 percent and has decreased for two consecutive years.
As of the end of March 2017, the number of researchers amounted to 488,800 persons in business enterprises, 38,600 persons in non-profit institutions and public organizations, and 326,200 persons in universities and colleges. In terms of R&D expenditures in fiscal 2016, business enterprises spent 13.3 trillion yen (72.3 percent of total R&D expenditures), non-profit institutions and public organizations spent 1.5 trillion yen (8.2 percent), and universities and colleges spent 3.6 trillion yen (19.6 percent).
Universities and colleges spend more than 90 percent of their R&D expenditure on natural sciences for basic research and applied research, while business enterprises allocate over 70 percent for development purposes.
Based on the Science and Technology Basic Law, which was promulgated and enforced in 1995, the Japanese government has formulated a Basic Plan since fiscal 1996, and has promoted science and technology policies.
Currently, the Fifth Science and Technology Basic Plan (fiscal 2016 to fiscal 2020) is being initiated.
Approximately 90 percent of the 488,800 researchers at business enterprises at the end of March 2017, or 426,700 persons, were in the manufacturing industries; the largest number was in the motor vehicles, parts and accessories industry, followed by the information and communication electronics equipment industry, then by the business oriented machinery industry.
In terms of R&D expenditures in fiscal 2016, of 13.3 trillion yen spent by business enterprises, 11.6 trillion yen was spent by manufacturing industries. The motor vehicles, parts and accessories industry spent the most, followed by the information and communication electronics equipment industry, then by the medicines industry.
(2) Technology Balance of Payments (Technology Trade)
Technology trade is defined as the export or import of technology by business enterprises with other countries, such as patents, expertise, and technical guidance. In fiscal 2016, Japan earned 3,571.9 billion yen from technology exports, which was down 9.6 percent from the previous fiscal year. This was the first decrease in five years. Of the total receipts, 76.5 percent was from overseas parent/subsidiary companies. Meanwhile, payments to technology imports stood at 452.9 billion yen, a decrease of 24.8 percent compared with the previous fiscal year. It decreased for the first time in two years. Of this figure, 27.6 percent was for payments to overseas parent/subsidiary companies.
In fiscal 2016, Japan exported 3571.9 billion yen of technologies; major export destinations were: the U.S.A. (1,382.4 billion yen, or 38.7 percent of total exports), followed by China (445.6 billion yen), Thailand (301.6 billion yen), and the U.K. (221.1 billion yen). On the other hand, Japan imported 452.9 billion yen of technologies, mainly from the U.S.A. (328.0 billion yen, or 72.4 percent of total imports), followed by the Netherlands (24.1 billion yen), Switzerland (22.3 billion yen) and Germany (19.1 billion yen).
2. Patents
The total number of patent applications remained robust in and after 1998 as more than 400,000 applications were filed every year, but a gradual drop has been seen since 2006. It fell significantly in 2009. In 2016, there were 318,381 applications (down 0.1 percent from the previous year), and the width of decrease is shrinking.
Over 150 countries, including Japan, have joined the international patent system of the World Intellectual Property Organization (WIPO) as of March 2017. In 2016, the number of international patent applications filed under the Patent Cooperation Treaty (PCT) was 233,000, of which 45,239 were from Japan, accounting for 19.4 percent.
The United States Patent and Trademark Office ranked first among major patent offices for applications filed by Japanese applicants in 2016, with 85,313 applications. The number of patent applications filed by Japanese applicants at the State Intellectual Property Office of the People's Republic of China was 39,207.
3. Information and Communication
(1) Diffusion of the Internet
The population of Internet users, the commercial use of which began in 1993, continues to increase. The number of people who used the Internet over the past year as of the end of September 2016 (individuals who are 6 years of age and older; Internet connected equipment includes any and all types of Internet connection devices, including computers, cell phones, PHS (personal handyphone systems), smartphones, tablets and game consoles) was 100.8 million and exceeded 100 million people since the end of 2013. According to the individual Internet usage rate by age group, the usage rate exceeded 90 percent in each age group between 13 to 59 years old, and the usage rate of 6 to 12 years old was 82.6 percent, which was a significant increase from 74.8 percent the previous year.
According to the status of Internet use by device by age group as of the end of September 2016, the usage rate of computers was the highest (58.6 percent), followed by smartphones (57.9 percent). Figures for the rate of Internet use by device by age group show that more than 70 percent use smartphones in each age group between ages 13-49, and more than 90 percent use smartphones in the 20-29 age group.
As of the end of September 2016, 13.3 percent of enterprises had introduced telework. The most frequent telework pattern was mobile work, 63.7 percent, followed by working from home, 22.2 percent and working from a satellite office, 13.8 percent.
(2) Progress of Communication Technologies
The number of broadband (connection) subscribers as of the end of March 2017 was 189 million. Among the number of broadband subscribers, those with subscriptions for 3.9-4G mobile phones (LTE) were the highest, amounting to 103 million subscriptions and accounting for 54.3 percent of the total. Those with BWA (Broadband Wireless Access) service (access service connecting to networks via broadband wireless access systems using the 2.5GHz band [WiMAX, etc.]) was the second highest, with 48 million subscribers, making up 25.3 percent of the total.
Meanwhile, IP phone services (voice phone services that use Internet Protocol technology across part or all of the communication network), which use broadband circuits as access lines, entered full-scale use between 2002 and 2003. As of the end of March 2017, the total number of IP phone subscribers was 41 million.
In 2016, the number of fixed-broadband subscribers in Japan was 40 million, the third-largest after China, 323 million and the U.S.A., 106 million.
(3) Telephones
The number of fixed phone service subscription contracts has continued to decrease in recent years. As of the end of March 2017, the number of fixed phone subscribers was 20 million (down 8.5 percent from the previous year). Meanwhile, the number of mobile phone subscribers (cell phones and personal handyphone systems) totaled 161 million at the end of March 2016, marking a rise by 3.9 percent year-on-year to 167 million at the end of March 2017.
(4) Postal Service
As of the end of March 2018, Japan Post Co., Ltd. had 24,395 post offices nationwide. In fiscal 2017, post offices handled 21.7 billion items of domestic mail (including parcels), which was a 0.9 percent decrease from the previous fiscal year. Meanwhile, the total quantity of international mail (letters, Express Mail Services [EMS], and parcels) sent in fiscal 2017 amounted to 47.2 million items, an increase of 1.6 percent from the previous fiscal year.
Chapter 9 Transport (PDF:3,716KB)
1. Domestic Transport
Various modes of domestic transport are used in Japan; almost all passenger transport is by railway, while nearly all freight transport is by motor vehicle and cargo ship.
(1) Domestic Passenger Transport
No major changes have been observed in recent years in the volume of domestic passenger transport. Under these circumstances, a shift from private automobiles to public transportation should be promoted as a measure against global warming, along with promotion of the development and distribution of environment-friendly vehicles and measures for traffic flow improvement. Therefore, in addition to the promotion of computerization, such as adoption of IC cards (multiple-use IC [integrated circuit] cards) and increased convenience in public transportation through the improvement of transfers, workplace "eco-commuting" measures have been promoted.
In fiscal 2016, the number of domestic transport passengers was 30.73 billion (up 0.7 percent from the previous fiscal year). The total volume of passenger transport was 592.49 billion passenger-kilometers (up 0.4 percent).
In fiscal 2016, the Japan Railways (JR) group reported 9.39 billion passengers (up 0.9 percent from the previous fiscal year) and 272.00 billion passenger-kilometers (up 1.0 percent). Railways other than JR reported 15.21 billion passengers (up 1.5 percent) and 159.80 billion passenger-kilometers (up 1.1 percent).
To promote the use of buses, approaches to improve punctuality and speed using bus lanes and to make buses more convenient, such as by introducing a bus location system that provides locational information of buses as well as an IC card system that enables smooth bus rides, are being carried out. Commercial buses recorded an increase in passengers to 4.58 billion (up 0.4 percent from the previous fiscal year), but a decline in passenger-kilometers to 63.74 billion (down 1.8 percent) in fiscal 2016.
In recent years, in order to beef up Japan's competitiveness in the global arenas of business and tourism, development of aviation networks has been carried out, such as through enhancements to the functions of the metropolitan airports, promotion of entry of LCCs that could create new demand for aviation through the expansion of domestic tourism, etc. Fiscal 2016 air transport records show that there were 98.12 million passengers (up 2.1 percent from the previous fiscal year), and passenger-kilometers amounted to 90.58 billion (up 2.7 percent).
In fiscal 2015, passenger ships reported 87.95 million passengers (up 2.4 percent from the previous fiscal year) and 3.14 billion passenger-kilometers (up 7.4 percent).
(2) Domestic Freight Transport
In the area of domestic freight, a total of 4.79 billion metric tons (up 1.9 percent from the previous fiscal year) of freight was transported for a total of 413.07 billion ton-kilometers (up 1.4 percent) in fiscal 2016. As for transport tonnage volume in fiscal 2016, motor vehicle transport accounted for more than 90 percent of the total.
2. International Transport
(1) International Passenger Transport
The global economic downturns after September 2008, the spread of new influenza in early 2009, and the influence of the Great East Japan Earthquake decreased international air passenger transport with Japanese airlines. In 2012, this trend reversed to an increase, and in 2016, Japanese airlines transported 20.51 million passengers (up 12.3 percent from the previous year) on international flights, and registered 90.40 billion passenger-kilometers (up 10.1 percent). Both recorded their fifth consecutive year of increase.
The number of Japanese overseas travelers in 2017 was 17.89 million (up 4.5 percent from the previous year). The number of foreign visitors to Japan in 2017 was 28.69 million, representing an increase of 19.3 percent from the previous year. The number of visitors was the highest ever since statistics came to be recorded in 1964.
According to reports on arrivals by tourist offices in countries around the world, the U.S.A., China and the Republic of Korea had many Japanese visitors in 2016.
The number of foreign visitors to Japan in 2017 broken down by country/region, the number of visitors from Asian countries was highest, totaling 24.72 million (up 21.0 percent from the previous year). Among Asian countries, the number of visitors from China was highest, amounting to 7.36 million, and reached seven million people for the first time. The figure accounted for 25.6 percent of the total number of foreign visitors to Japan.
This increase is attributed to expanding aviation networks, an increase in demand for visits to Japan by foreigners through continuous promotion of tourism, visa alleviation measures for various Southeast Asian countries, expansion of the consumption tax exemption program, etc.
In 2017, of the total number of foreign visitors to Japan, tourists numbered 25.44 million people, or 88.7 percent of total foreign visitors. The highest number of tourists came from the Republic of Korea, with 6.59 million travelers, followed by China, with 6.45 million travelers.
(2) International Freight Transport
The volume of seaborne foreign transport in 2016 was 1,018 million tons, down 3.6 percent over the previous year. Of this figure, total exports increased by 8.4 percent to 66 million tons, and total imports decreased by 5.8 percent to 513 million tons.
Air-shipped international freight in 2016 totaled 1.53 million tons in terms of volume (up 9.0 percent from the previous year) and 8.41 billion tons in terms of ton-kilometers (up 5.9 percent).
Chapter 10 Commerce (PDF:3,716KB)
1. Wholesale and Retail
The "2016 Economic Census for Business Activity" showed that 1.36 million wholesale and retail establishments were in operation in Japan. The number of persons engaged at such establishments became 11.84 million. Sales in the wholesale and retail industries amounted to 500.79 trillion yen, accounting for 30.8 percent of the total of all industries.
(1) Wholesale Trade
The number of wholesale establishments was 364,814 in 2016. Observed by size of operation in terms of persons engaged, establishments with less than 20 persons accounted for 88.6 percent of the total. A total of 88.5 percent were corporations, while 11.4 percent were individual proprietorships.
The number of persons engaged in wholesale was 4 million in 2016, of which 703,623 were persons other than full-time employees (including those who are referred to as "contract employees", "non-regular members of staff", "part-timers", and similar appellations) and temporary employees, making up 17.6 percent of the total.
(2) Retail Trade
The number of retail establishments in operation totaled 990,246 in 2016. Observed by size of operation in terms of persons engaged, establishments with less than 10 persons accounted for 79.2 percent of the total. By type of legal organization, 60.6 percent of retail establishments were corporations, while 39.2 percent were individual proprietorships. The proportion of individual proprietorships was higher in the retail sector than in the wholesale sector.
The number of persons engaged in retail was 7.84 million in 2016, of which 4.39 million were persons other than full-time employees (including those referred to as "contract employees", "non-regular members of staff", "part-timers", and similar appellations) and temporary employees, comprising 56.1 percent of the total.
2. Eating and Drinking Places
There were 590,847 eating and drinking places establishments in operation and 4.12 million persons engaged at them in 2016.
Chapter 11 Trade, International Balance of Payments, and International Cooperation (PDF:3,716KB)
1. Trade
(1) Overview of Trade
In 2017, Japan's international trade on a customs clearance basis increased, together with exports and imports. Exports (in FOB value) amounted to 78.3 trillion yen, which was an 11.8 percent increase as compared to the previous year, and an increase for the first time in two years. Imports (in CIF value) amounted to 75.4 trillion yen, which was a 14.1 percent increase as compared to the previous year. It increased for the first time in three years. Trade surplus totaled 2.9 trillion yen. This was for the second consecutive year of trade surplus.
Japan's 2017 exports increased by 6.2 percent from the previous year in terms of unit value index (the first increase in two years), and increased by 5.2 percent from the previous year in terms of quantum index (an increase for the second consecutive year).
Japan's imports in 2017, unit value index and quantum index, increased by 10.7 percent and 3.2 percent compared to the previous year; both indices recorded an increase for the first time in three years.
(2) Trade by Commodity
Japan's exports in 2017 consisted of transport equipment, which accounted for the largest portion of the total export value, 23.3 percent, followed by general machinery and electrical machinery, making up 20.0 percent and 17.5 percent, respectively. Motor vehicles, which are in the transport equipment category, constituted 15.1 percent of the total export value, up 2.8 percent in quantity and up 4.3 percent in value from the previous year. One characteristic of Japan's exports is the large proportion of high value-added products manufactured with advanced technology, such as motor vehicles, iron and steel, and integrated circuits.
The leading import item category was mineral fuels, which represented 21.0 percent of the total value imported, followed by electrical machinery and chemicals, with 16.0 percent and 10.0 percent, respectively. Crude petroleum and partially refined petroleum, in the mineral fuels category, constituted 9.5 percent of the total import value, down 4.0 percent in quantity and up 29.3 percent in value from the previous year.
(3) Trade by Country/Region
Japan has maintained a trade surplus with Asia and the U.S.A., while having a continuous trade deficit with the Middle East and Oceania.
(A) Trade with Asia
Japan's 2017 trade balance with Asia resulted in a 5.9 trillion yen in surplus, an increase for the third consecutive year (up 50.8 percent from the previous year). Exports (in FOB value) totaled 42.9 trillion yen (up 15.7 percent), an increase for the first time in two years; this was mainly due to the contributions for the increase in electrical machinery and general machinery. Imports (in CIF value) amounted to 37.0 trillion yen (up 11.5 percent), an increase for the first time in three years; this was mainly attributed to the increase in electrical machinery.
In 2017, Japan's trade with China amounted to 14.9 trillion yen in exports and 18.5 trillion yen in imports. The percentage of the total amount of Japan's imports and exports that is accounted for by imports and exports between Japan and China is approximately 20 percent, signifying that China is Japan's largest trading counterpart.
(B) Trade with U.S.A.
Japan's 2017 trade balance with the U.S.A. showed a surplus of 7.0 trillion yen (up 3.0 percent from the previous year), an increase for the first time in two years. The U.S.A. has been the biggest export counterpart for Japan for five consecutive years. Exports (in FOB value) totaled 15.1 trillion yen (up 6.9 percent), an increase for the first time in two years. The growth was due mainly to the contributions of transport equipment and general machinery. Imports (in CIF value) totaled 8.1 trillion yen (up 10.5 percent), an increase for the first time in two years. The growth was due mainly to the contributions of general machinery and mineral fuels.
(C) Trade with EU
In 2017, Japan's exports (in FOB value) to the EU (28 countries) increased by 8.5 percent year-on-year, to 8.7 trillion yen. Commodities such as transport equipment and general machinery contributed to the growth in exports. Imports (in CIF value) from the EU (28 countries) totaled 8.8 trillion yen, up 7.4 percent from the previous year. Commodities such as transport equipment and foodstuffs contributed to the growth in imports. Japan's trade balance with the EU (28 countries) registered a deficit of 100.0 billion yen.
2. International Balance of Payments
Breaking down the current account in 2017, goods and services fell by 1.5 trillion yen from the previous year to 4.2 trillion yen. This trade surplus was for the second consecutive year. Primary income amounted to 19.7 trillion yen, which was a 9.1 percent increase from the previous year, indicating an increase in its surplus. As a result, the current account totaled 21.9 trillion yen, and its surplus bulged for the third consecutive year.
Breaking down the financial account in 2017, there was an increase in net assets for direct investment as compared to the previous year. However, since there was a decrease in net assets for portfolio investment as compared to the previous year, the financial account amounted to 17.1 trillion yen.
Japan's external assets (the balance of overseas assets held by residents in Japan) as of the end of 2017 amounted to 1,012.4 trillion yen, while its external liabilities (assets held in Japan by nonresidents) were 684.0 trillion yen. As a result, Japan's net external assets (external assets minus external liabilities) were 328.4 trillion yen.
Japan's foreign reserve assets remained at around 220 billion U.S. dollars during the period from 1996 to 1998. Beginning in 1999, foreign reserve assets increased continuously. At the end of 2012, however, they began to decrease, falling to 1,268.1 billion U.S. dollars (down 2.1 percent year-on-year). However, at the end of 2017, they were amounted to 1,264.3 billion U.S. dollars (up 3.9 percent), marking an increase for the first time in six years.
The yen began appreciating sharply in late 2008. From 2011 into 2012, the exchange rate of yen to the U.S. dollar stayed between the higher 70 yen range and the lower 80 yen range. In April 2013, the Bank of Japan introduced quantitative and qualitative monetary easing to put an end to deflation. Based on this, the exchange rate shifted towards yen depreciation. Afterwards, after continuing to hold steady, there was a trend towards somewhat of a yen appreciation. As of April 2018, the exchange rate was 109.4 yen per U.S. dollar.
3. International Cooperation
In Japan, there are diverse international cooperation donors: Official Development Assistance (ODA) by the government, direct investments and export credits by private corporations, grants by private nonprofit agencies, assistance activities by NGOs and volunteer citizen groups, etc. In addition, there are various forms of ODA, including bilateral assistance, which assists developing countries or regions directly, and multilateral assistance, which contributes to international organizations.
In the ODA framework, Japan's spending (on the basis of net disbursement at current prices) in 2016 increased by 13.2 percent over the previous year to 10.4 billion U.S. dollars. Japan has contributed to the growth of developing countries as the world's number-one ODA donor for ten consecutive years up until 2000. Recently, Japan's ODA budget has been declining because of the country's severe economic and financial situation.
In the 2016 comparison of the ODA provided by the member countries of the Development Assistance Committee (DAC) of the OECD, Japan was the fourth-largest contributor behind the U.S.A., Germany and the U.K. The ratio of Japan's ODA to Gross National Income (GNI) was 0.20 percent, which is at the same level as compared with that of the previous year.
Of the 10.4 billion U.S. dollars in ODA provided by Japan in 2016, 7.0 billion was bilateral ODA (up 14.3 percent year-on-year), and 3.4 billion was ODA contributed through multilateral institutions (up 10.9 percent).
Bilateral ODA (net disbursement at current prices, including assistance to graduated countries) provided in 2016 consisted of 2.8 billion U.S. dollars in grants-in-aid, 2.8 billion in technical cooperation, and 1.5 billion in loans, etc.
By region, bilateral ODA (net disbursement at current prices, including assistance to graduated countries) was distributed as follows: Asia, 1,788 million U.S. dollars; Sub-Saharan Africa, 1,389 million U.S. dollars; Middle East and North Africa, 1,288 million U.S. dollars; Europe, 336 million U.S. dollars; Oceania, 163 million U.S. dollars; and Latin America and the Caribbean, 82 million U.S. dollars.
Bilateral ODA in 2016 (including assistance to graduated countries) was broken down by purpose (on a commitment basis) as follows: 51.0 percent for improving economic infrastructure, followed in descending order by social and administrative infrastructure (including education, water supply and sanitation), with 17.1 percent.
In addition to the financial assistance described above, Japan has also been active in the areas of human resources development and technology transfer, both vital to the growth of a developing country, through its ODA activities.
Chapter 12 Labour (PDF:3,716KB)
Because of the effects of the Great East Japan Earthquake which occurred in March 2011, the data on labour in 2011 (1. Labour Force - 3. Unemployment) are supplementary estimated figures.
1. Labour Force
After the population in Japan aged 15 years and over peaked at 111.17 million people in 2011, it has been broadly flat since 2012. In 2017, this population reached 111.08 million people.
The labour force (among the population aged 15 years and over, the total of persons who are employed and persons who are unemployed) was decreasing in the 2000s in association with aging of the population, but shifted to an increase in 2013. The labour force numbered 67.2 million people in Japan in 2017, up 470,000 (0.7 percent) for the fifth consecutive year of increase.
The 2017 labour force participation rate (rate of the labour force to the population aged 15 years and over) was 60.5 percent (up 0.5 percentage points from the previous year). Observed by gender, the rate was 70.5 percent for men (up 0.1 percentage points) and 51.1 percent for women (up 0.8 percentage points).
The female labour force participation rate by age group is in an M-shaped curve, which indicates that women leave the labour force when they get married or give birth and then rejoin the labour force after their child has grown and the burden of child-rearing is reduced. However, the shape of the M-shaped curve has changed in recent years. A comparison with the data from twenty years ago (1997) shows that, in 2017, the 35-39 age group replaced the 30-34 age group to form the bottom of the M-shaped curve. The participation rate rose by 19.0 percentage points in the 30-34 age group and by 11.1 percentage points in the 35-39 age group, resulting in the bottom of the M-shaped curve becoming flatter and more gradual. Although this is thought to be greatly affected by the progression of enhancement of the legal system with respect to establishing both work and child-rearing, and development of a work environment such as at companies, there are also effects from the trend of getting married and having children later in life.
2. Employment
The number of employed persons continued to decline continuously since 1998, but began to rise in 2004 and continued rising for four years in a row. Although a downward trend set in once again in 2008, the number of employed persons increased again starting in 2013, which led to an increase of 650,000 in 2017, from 64.65 million (58.2 percent of the population aged 15 years and over) in the previous year to 65.3 million (58.8 percent).
(1) Employment by Industry
In 2017, the primary industry accounted for 3.4 percent of employment; the secondary industry, 24.2 percent; and the tertiary industry, 72.4 percent.
Over the long term, the percentage of people employed in the primary industry and in the secondary industry have been continually falling, while the percentage of people employed in the tertiary industry has been continually rising. The tertiary industry accounts for 70 percent of all industries. By industry, the number of persons employed in the primary industries of "agriculture and forestry" and in the secondary industry of "manufacturing" have been on a downward trend. On the other hand, the number of persons employed in the tertiary industries of "medical, health care and welfare" has been increasing.
Depending on the industrial sector, a difference was seen in the employment tendency between men and women. In 2017, of male employment was highest in "electricity, gas, heat supply and water" (86.2 percent), followed by "construction" (84.7 percent) and "transport and postal activities" (80.2 percent). The percentage of female employment was highest in "medical, health care and welfare" (75.2 percent), followed by "accommodations, eating and drinking services" (61.4 percent) and "living-related and personal services and amusement services" (59.0 percent).
(2) Employment by Occupation
In terms of occupation, employment in the "administrative and managerial workers" and "agricultural, forestry and fishery workers" categories has been declining. In contrast, "service workers" such as home-care workers have been on a rising trend over the past few years due to a trend toward a service-oriented economy, the aging population, and improvements to welfare services. There is also a rising trend in the number of "professional and engineering workers", which accounted for approximately 17.0 percent of the total employed persons in 2017.
In 2017, the percentages of male and female employed persons by occupation show that men were particularly prominent among "construction and mining workers" (98.0 percent) and "transport and machine operation workers" (97.7 percent). Women were prominent among "service workers" (67.5 percent) and "clerical workers" (60.3 percent).
(3) Employment by Employment Pattern
When looking at the trends in the number of employed persons by employment pattern, non-regular staff members, such as part-time workers and agency-dispatched workers, have been increasing continuously for the eighth consecutive year since 2010. The number of regular staff members has been on a slight declining trend since the early 2000s, but began to rise in 2015 and continued rising for three years in a row.
In 2017, there were 54.6 million employees (excluding company executives), of whom 20.36 million, or 37.3 percent, were non-regular staff members. The ratio of non-regular staff members among all male employees was 21.9 percent, while the corresponding ratio for females was 55.5 percent, revealing a large difference between the genders.
When looking at the percentage of non-regular staff members to the total of regular and non-regular staff members by gender and age group, for males, the percentages of young people aged 15 to 24 years, and the elderly aged 65 or older were high. Among females, non-regular staff members accounted for more than 50 percent across all age groups, with the exception of females aged 25 to 34 years old.
When looking at the main reasons for the current employment patterns of males and females who are non-regular staff members, for males, the reason "For working at convenient times" was the most popular, on average in 2017, with 1.57 million males (26.6 percent) choosing this reason, representing an increase by 80,000 people as compared to the previous year. The most popular reason among females was also "For working at convenient times", with 3.83 million females (29.1 percent) choosing this reason, representing an increase by 160,000 people.
The employment rate of new graduates had been worsening as a result of the economic slowdown since 2008, but in recent years, their employment situation has been improving continuously.
3. Unemployment
In 2017 the unemployed numbered 1.9 million people, down 8.7 percent from the previous year and representing a decline for the eighth consecutive year. The unemployment rate was 2.8 percent, down 0.3 percentage points from the previous year.
After the ratio of job openings to job seekers peaked in 2006, it has been on a falling trend in recent years. Since 2009, the ratio has been increasing. The ratio of job openings to job seekers was 1.50 times in 2017, up 0.14 points from the previous year.
A breakdown by gender shows that the unemployment rate in 2017 was 3.0 percent among men, and 2.7 percent among women. The unemployment rate has been higher among men for the twentieth consecutive year since 1998.
The unemployment rate was seen as notably higher in younger age groups than in other age groups, in men and women alike.
Analyzing the total number of unemployed in 2017 (1.90 million people), by reason for job-seeking, the major reasons were: (i) involuntarily dismissed due to corporate or business circumstances, or reaching retirement age limit, 0.50 million persons; (ii) voluntarily left a job for personal or family reasons, 0.82 million persons; (iii) new job seekers due to the necessity to earn income, 0.27 million; and (iv) new job seekers just graduated from school, 0.07 million.
In terms of the duration of unemployment, most were unemployed for "one year or more" (0.67 million persons), followed by "less than three months" (0.64 million persons).
4. Hours Worked and Cash Earnings
In 2017, the monthly average of total hours worked was 143.4 per regular employee (in establishments with five or more regular employees), down 0.3 percent from the previous year, and an annual average of 1,721 hours.
Of the total monthly hours worked, 132.5 were scheduled working hours, representing a decrease of 0.4 percent from the previous year. Non-scheduled work such as overtime work averaged 10.9 hours per month, representing an increase of 1.0 percent from the previous year. Working days averaged 18.6 days per month in 2017.
In 2017, the monthly average of total cash earnings per regular employee (in establishments with five or more regular employees) was 316,966 yen. This total amount includes 260,776 yen in "contractual cash earnings" (which include "scheduled cash earnings" plus "non-scheduled cash earnings" for working overtime, on holidays and late at night, as well as other allowances), and 56,190 yen in "special cash earnings" (which include summer and year-end bonuses, payments to celebrate employees' marriages, etc.).
Generally, the average earnings (scheduled cash earnings) in Japan go up with age until roughly the 40s to mid-50s are reached and then decline. Into the 1990s, an increasing number of enterprises reviewed their salary system, resulting in a more widespread introduction of a merit-based pay system placing emphasis on performance. In recent years, many companies have also adopted wage determination based on job performance skills with consistency.
Chapter 13 Family Budgets and Prices (PDF:3,716KB)
1. Family Budgets
In 2015, there were approximately 53 million private households in Japan, of which about 65 percent are two-or-more-person households and about 35 percent are one-person households. Family budgets vary significantly depending on the employment situation and ages of their members. In this section, family budgets in various types of households are described on the basis of the 2017 results of the "Family Income and Expenditure Survey".
(1) Income and Expenditure
(A) Two-or-more-person Households
The 2017 average monthly consumption expenditures per two-or-more-person household (the average number of household members being 2.98 and the average age of the household head being 59.6 years) was 283,027 yen. Compared to the previous year, it increased by 0.3 percent in nominal terms and decreased by 0.3 percent in real terms. The share of food expenses to total consumption expenditures (Engel's coefficient) was 25.7 percent.
When looking at the real annual change in consumption expenditures, although the width of decrease in 2017 has shrunk compared to 2016, there was a decrease in real terms for four consecutive years.
(a) Workers' Households
A workers' household means a household of which the head is employed by a company, public office, school, factory, store, etc. The average income of workers' households (the average number of household members being 3.35 and the average age of the household head being 49.1 years) was 533,820 yen in 2017, of which about 80 percent came from the household head's income.
Disposable income, calculated as income minus non-consumption expenditures such as taxes and social insurance contributions, was 434,415 yen. Of this disposable income, 313,057 yen was used for living expenses (consumption expenditures), such as food and housing expenses, while the remainder (surplus), totaling 121,358 yen, was applied to savings, life insurance premiums and repaying debt such as housing loans.
A comparison of consumption expenditures by category showed that spending on "transportation and communication" and "culture and recreation" increased from the previous year in real terms, while spending on "food", "education", etc. decreased in real terms.
Family budgets differ among households according to their stages in life. Observed by age group of the household head, the 2017 average monthly disposable income of workers' households was the highest in households in the 40s group (481,684 yen), followed by those in the 50s group (478,119 yen) and the 30s group (406,605 yen).
The 2017 average propensity to consume (the ratio of consumption expenditures to disposable income) was the lowest in households in the under-30 group (63.7 percent). The figure was 63.9 percent for households in the 30s group, 66.4 percent in the 40s group, 74.8 percent in the 50s group, 90.3 percent in the 60s group, and 86.5 percent in the 70-and-over group. The percentage tends to be higher as the age goes up, except for the 70-and-over group. Meanwhile, a net increase in financial assets (an amount added to savings) was the highest in households in the 40s group, followed by those in the 20s group.
(b) Non-working Elderly Households
According to an analysis of the average monthly income and expenditures of non-working elderly households (two-or-more-person households where the age of the household head is 60 and over), the average income was 204,587 yen in 2017. Social security benefits amounted to 175,799 yen, thus accounting for 85.9 percent of income.
Disposable income averaged 176,636 yen, while consumption expenditures averaged 237,682 yen. The average propensity to consume in non-working elderly households was 134.6 percent, which means consumption expenditures exceeded disposable income. The deficit of disposable income to consumption expenditures (61,046 yen) increased from that of the previous year (60,517 yen). This deficit was financed by withdrawing financial assets such as deposits, etc.
(B) One-person Households
The average monthly consumption expenditures of one-person households in 2017 was 161,623 yen, up 1.7 percent in nominal terms and up 1.1 percent in real terms from the previous year. Compared on an age-group basis to the previous year in real terms, the average monthly consumption expenditures were up 2.8 percent for the under 35-year-old group, up 4.4 percent in the 35-59 age group, and down 1.4 percent in the 60-and-over group. Spending on categories such as "fuel, light and water charges" and "medical care" tended to be larger in older age groups. Meanwhile, older age groups were found to spend increasingly less on categories such as "housing" and "transportation and communication".
(2) Savings and Debts
Two-or-more-person households in 2017 showed that the average amount of savings per workers' household was 13.27 million yen, resulting in a ratio to yearly income (7.22 million yen) of 183.8 percent. The median value of household savings (the value of household savings that is in the middle when households are lined up in order from those with the lowest amount of savings to those with the highest amount of savings) was 7.92 million yen. On the other hand, the average amount of debt per household was 7.94 million yen, which was 110.0 percent relative to yearly income. The median value of households holding liabilities was 13.15 million yen. The portion of household debt accounted for by "housing and/or land" averaged 7.39 million yen. A total of 42.6 percent of workers' households held "debts for housing and/or land".
By age group of household head, the average amount of savings was found to be the highest in the 60s group, while debts were the highest in the 30s group.
(3) Internet Shopping by Households
Due to popularization of computers, smartphones, etc., the use of Internet shopping has been increasing in recent years. According to the Survey of Household Economy, the percentage of two-or-more-person households that utilize Internet shopping has continued to increase since 2002, reaching 34.3 percent in 2017. Total monthly expenditures used on Internet shopping amounted to an average of 10,586 yen per household.
Looking at the breakdown of total expenditures per two-or-more-person households spent on Internet shopping, "travel-related" were the highest at 22.9 percent, followed by "food" at 14.3 percent, "clothing and footwear" at 10.8 percent, "culture-related" (such as books and music software) at 10.0 percent, and "home electronics and furniture" at 8.9 percent.
(4) Electronic Money
Use of electronic money has been increasing, as a means for settling accounts that can be easily used at transportation facilities, convenience stores, supermarkets, etc. Based on all households in the Survey of Household Economy, the percentage of households with members who have electronic money and the percentage of households with members who have used electronic money have been on an increasing trend starting in 2008. In 2017, the percentage of households with electronic money was 52.0 percent, and the percentage of households that have used electronic money was 42.9 percent, indicating increases as compared to the previous year.
2. Prices
Producer prices were on a downward trend starting in 1992, after the collapse of the bubble economy, and then turned upward in 2004. Producer prices are easily affected by changes in the price of imported raw materials such as crude petroleum and iron ore, due to fluctuations in the conditions of international commodity markets as well as in the exchange rate, and its impact is significant in advances and declines from 2008 to 2009 around the time of the bankruptcy of Lehman Brothers. Starting in 2010, producer prices have been fluctuating within a range of plus or minus 2 percent (as compared to the same month of the previous year). Although they continued to increase starting in the second quarter of 2013 due to a yen depreciation, the index turned downward in the second quarter of 2015, but showed an upward trend since the first quarter of 2017.
On the other hand, the width of the increase in consumer prices also shrank starting in 1992. Although the width of the increase of this index expanded temporarily when the consumption tax rate was raised from 3 percent to 5 percent in 1997, it subsequently went on a downward trend. Starting in the fourth quarter of 2007, prices were once again on an upward trend due to sharp increases in the price of imported raw materials, and in the third quarter of 2008, the increase in prices exceeded 2 percent year-on-year. Thereafter, consumer prices were affected by the fall in prices of imported raw materials, and started to decrease in the first quarter of 2009. After that, they shifted mainly downwards, but turned upward starting in the third quarter of 2013 due to a weakening of the yen. Due to the increase in the consumption tax from 5 percent to 8 percent in April 2014, the width of increase expanded, but in the second quarter of 2015, the effects of the tax increase cycled. Fluctuations after that were strongly impacted by global resource prices such as crude petroleum and exchange.
(1) Consumer Price Index (CPI)
The all items index of consumer prices (with base year 2015 = 100) was 100.4 in 2017, up 0.5 percent from the previous year.
According to the general index (all items, less imputed rent) in the regional difference index of consumer prices, which compares the difference in consumer price levels by prefecture, Tokyo had the highest score in 2017, with a figure of 104.4 against the national average set at 100, followed by Kanagawa, with 104.2. On the other hand, Gunma registered the lowest score, with 96.2. The index for Tokyo was 8.5 percent higher than that of Gunma.
(2) Corporate Goods and Services Producer Price Indices
The Corporate Goods Price Index measures price changes of goods traded in the corporate sector. It is comprised of the Producer Price Index (price index of domestically-produced and domestically-traded goods in the corporate sector), the Export Price Index, and the Import Price Index.
In 2017, the Producer Price Index (2015 as the base year = 100) was 98.7, up 2.3 percent from the previous year.
In 2017, the Export Price Index increased to 100.2 on a contract currency basis (up 3.4 percent from the previous year), and to 95.5 on a yen basis (up 5.3 percent from the previous year). Meanwhile, the Import Price Index rose to 98.1 on a contract currency basis (up 8.8 percent from the previous year) and to 92.7 on a yen basis (up 10.9 percent from the previous year).
The Services Producer Price Index measures price movements of services traded between companies. In 2017, the Services Producer Price Index (CY2010 as the base year = 100) was 103.7, up 0.7 percent from the previous year.
Chapter 14 Environment and Life (PDF:3,716KB)
1. Environmental Issues
The list of environmental issues is wide-ranging, from waste management to global warming. Japan is, while pursuing regional development at home, taking the initiative in efforts to prevent global warming and conserve the natural environment to help achieve sustainable growth of the entire world.
In fiscal 2016, Japan's total emission of greenhouse gases, which are a major cause of global warming, amounted to 1.3 billion tons (calculated after their conversion into carbon dioxide), representing a decrease of 1.2 percent from the previous fiscal year. Carbon dioxide accounted for 92.3 percent of these greenhouse gases, with an emission volume of 1.2 billion tons. A breakdown of carbon dioxide emissions by sector revealed that emissions from the industrial sector accounted for 34.6 percent of the total, followed in order by emissions from the transport sector, the commercial sector (office buildings, etc.), the residential sector, and the energy sector (electric power plants, etc.).
The state of waste management in Japan had remained grave due to the shrinking remaining capacity of final disposal sites and increased illegal dumping. This led to the Basic Act on Establishing a Sound Material-Cycle Society (brought into force in January 2001), which defines basic principles for the creation of a sound material-cycle society. This Act has established a legal framework to address issues such as waste disposal and automobile and electrical appliance recycling. Furthermore, in Japan, the "3R" (reduce, reuse and recycle) in waste management including R&D on waste recycling technology and appropriate management of materials of hazards were promoted, but recently, the construction of the socio-economic system efforts to especially implement the "2R" (reduce and reuse) from the "3R" is now promoted.
Of various types of waste generated as a result of business activities, 20 of them, including sludge, waste oil, and soot and dust, are designated as "industrial waste". The fiscal 2015 nationwide industrial waste generation totaled 391 million tons. Sludge, animal waste and debris, which account for approximately 80 percent of the total industrial waste, are now increasingly recycled into construction materials, fertilizers, and other materials. Thanks to this development, the volume of final disposal (to be put into landfills) fell from 90 million tons in fiscal 1990 to 10 million tons in fiscal 2015.
Meanwhile, a total of 44 million tons of "nonindustrial waste" (household waste and also shop, office and restaurant waste) was generated in fiscal 2015. This translates to 939 grams per person per day. In terms of nonindustrial waste disposal in fiscal 2015, the total volume of processed waste was 42 million tons. The total volume of recycled waste was 9 million tons, with the recycling rate at 20.4 percent.
2. Housing
According to the "Housing and Land Survey" conducted in October 2013, the total number of dwellings (in the case of apartment buildings, counting the number of individual units) in Japan was 61 million, up by 3 million, 5.3 percent from 2008. The number of households was 52 million, representing the excess in number of dwellings over households by 8 million.
In 2013, the number of occupied dwellings (where people usually live) amounted to 52 million, accounting for 85.9 percent of the total number of dwellings. Of these, the number of dwellings used exclusively for living totaled 51 million, accounting for 97.8 percent of the occupied dwellings. Meanwhile, the number of vacant dwellings increased by 0.6 million, 8.3 percent from 2008, to 8 million. That vacancy rate represented 13.5 percent of the total number of dwellings, the highest-ever ratio.
A breakdown of occupied dwellings by category of ownership showed that owned houses totaled 32 million, accounting for 61.7 percent of the total, which represented an increase of 0.6 percentage points from the figure of 61.1 percent in 2008. Rented houses, on the other hand, numbered 19 million, accounting for 35.5 percent of the total.
Occupied dwellings by building type showed that 29 million or 54.9 percent were detached houses, and 22 million or 42.4 percent were apartments. The proportion of apartments has consistently increased in recent years.
In terms of construction materials, 26 million or 92.2 percent of the detached houses were wood-frame houses (including fire-resistant ones). On the other hand, 16 million or 73.8 percent of the component apartments were steel-framed concrete structures.
A study of housing with accessibility equipment for the elderly and physically challenged persons showed that the number of housing units "with equipment for the elderly, etc." was 27 million, or 50.9 percent of all housing, up 2.2 percentage points from 24 million, 48.7 percent in 2008. Housing "equipped with handrails" accounted for 40.8 percent of all housing, and housing with a "step-free interior" made up 21.4 percent.
3. Traffic Accidents
In 1970, the annual number of fatalities from traffic accidents hit a record high of 16,765, leading to the enactment of the Traffic Safety Policies Basic Act in the same year. Based on this Act, the government has since promoted traffic safety measures in a comprehensive and systematic manner. As a result, the number of traffic accident fatalities was 3,904 in 2016, and this represented less than one-fourth the number in 1970.
In 2016, traffic deaths per 100,000 population were 3.1 persons, while the number of persons killed per 10,000 motor vehicles was 0.5 persons.
4. Crime
In 2017, the reported number of penal code offenses was 915,042, a decrease of 81,078, or 8.1 percent compared to the previous year. The proportion of thefts was the highest, accounting for 71.6 percent, or 655,498 cases (down 9.4 percent from the previous year).
The number of persons arrested for penal code offenses was 215,003 in 2017, a decrease of 11,373, or 5.0 percent compared to the previous year, marking a decline for the thirteenth consecutive year.
The ratio of arrests to reported number of offenses marked a post-World War II low, at 19.8 percent, in 2001. From 2002 to 2007, this ratio increased, and levelled off afterwards. In 2017, it was 35.7 percent, an increase of 1.9 point from the previous year.
Various kinds of computers and computer networks are currently playing an essential role as a social foundation. In line with this, crimes utilizing computer networks are becoming increasingly diversified. The number of arrests for cybercrime (violation of the Unauthorized Computer Access Act, offenses involving computers or electromagnetic records, offenses related to creation of unauthorized commands for electromagnetic records, offenses using cyber networks) in 2017 was 9,014, up 8.3 percent from the previous year. This represented about a ten-fold increase from the 913 cases registered in 2000.
The police organization consists of the National Public Safety Commission and the National Police Agency, both of which are state organizations, as well as the Prefectural Public Safety Commission and prefectural police, both of which are organizations under the authority of individual prefectures. As of April 1, 2017, the prefectural police operated police headquarters, police academies, 1,163 police stations, 6,256 police boxes and 6,380 police substations in 47 prefectures.
Community police officers at their respective police boxes/substations are engaged in standing guard over their communities, patrolling, and dealing with criminal cases and accidents to prevent crime and catch criminals.
Chapter 15 Social Security, Health Care, and Public Hygiene (PDF:3,716KB)
1. Social Security
In Japan, the birth rate has been falling, while the number of elderly people has been growing. Meanwhile, its social security system is required to address various changes in the socioeconomic environment.
In April 2000, a long-term care insurance system was launched. When the system was first established, there were 2.18 million people certified as needing care or needing support. This number grew by approximately 2.9-fold, to 6.22 million people as of April 2016, and the long-term care insurance system has become anchored in society. Today, there are approaches aimed at enhancing services for promoting integrated community care systems (system where medical care, nursing care, preventive care, and livelihood support are provided integrally in regions where one is used to living), as well as realizing a local, inclusive society.
The number of monthly users of long-term care insurance services totaled, on average, 5.21 million per month in fiscal 2015, and increased by approximately 2.8-fold over 15 years in comparison to the approximately 1.84 million users in fiscal 2000, when the system was initiated. In addition, the amount of nursing care costs in fiscal 2015 (including allowances for high-cost long-term care service, for high-cost medical care and long-term care service, and for long-term care service to a person admitted to a specified facility), totaled 9.8 trillion yen.
In fiscal 2015, social security benefit expenditures totaled 114.9 trillion yen (up 2.4 percent from the previous fiscal year), a figure which amounted to 903,700 yen per person. The ratio of Japan's social security benefit expenditures to national income registered 29.6 percent. Benefits for the aged accounted for approximately 70 percent of total social security benefit expenditures.
In fiscal 2015, pensions accounted for 47.8 percent of total social security benefit expenditures, while medical care accounted for 32.8 percent, and social welfare and others for 19.3 percent. Social security benefit expenditures are forecasted to continue growing, and are projected to reach 149 trillion yen in fiscal 2025.
In accordance with the rise in social security benefit expenditures, the amount of social insurance contributions and taxes has also increased, reaching 123.2 trillion yen in fiscal 2015. This was financed by 66.9 trillion yen from social insurance contributions, 46.1 trillion yen from taxes and 10.2 trillion yen from other sources. The government is making approaches toward drastic reform of the tax system, including raising the consumption tax, as the first step towards simultaneously ensuring stable funding for social security and achieving sound public finance.
The national contribution ratio (the combined ratios of taxes and social security costs to national income) was 42.8 percent in fiscal 2016 (taxation burden: 25.1 percent; social security premiums: 17.7 percent), up 0.2 percentage points from 42.6 percent in fiscal 2015 (taxation burden: 25.4 percent; social security premiums: 17.2 percent). The national contribution ratio in 2015 was 33.3 percent in the U.S.A., 46.5 percent in the U.K., and 67.1 percent in France. While the ratio in Japan was higher than that of the U.S.A., it was lower than European countries.
2. Health Care and Public Hygiene
Japan has a universal health insurance regime to ensure that anyone can receive necessary medical treatment. Under this regime, every citizen enters a publicly regulated medical insurance system, such as employees' health insurance or national health insurance.
This medical care system has contributed to Japan's achieving the highest life expectancy in the world, as well as a high standard of healthcare along with improvements in the living environment and better nutrition. Currently, reform of the whole system is being undertaken in order to preserve the stability of this medical insurance system in the future.
Life expectancy at birth was 87.3 years for women and 81.1 years for men in 2017. Japan's life expectancy remains at a high level in the world. Even with regard to healthy life expectancy, which is the "period during which one can lead a daily life without being restricted by health problems", Japan was among the world's highest as of 2016, with 74.8 years for women and 72.1 years for men. Japan's infant mortality rate was 1.9 per 1,000 births in 2017.
The death rate was 1,075.4 per 100,000 population in 2017. The leading cause of death was malignant neoplasms (299.4 per 100,000 population). Other major causes were lifestyle diseases such as heart diseases (163.8; excluding hypertensive diseases) and cerebrovascular diseases (88.1), in which people's daily diet and behavior are significant factors therefore. Together, these causes accounted for approximately 50 percent of all deaths. Malignant neoplasms became the leading cause of death in 1981. The death rate by malignant neoplasms has continued to increase since, reaching 27.8 percent of all deaths in 2017.
The number of deaths caused by suicide in Japan hovered at around 30,000 annually in 1998 and onwards, but for eight consecutive years, this number has been below 30,000, and the number of annual suicides has also been decreasing for the last eight years. The number of suicides in 2017 was 20,431. In 2017, suicide became the leading cause of deaths for people aged between 15 and 39.
In the past, humanity has faced the threat of various epidemic diseases, including new strains of influenza. In 2014, cases of infection from Dengue fever in Japan were confirmed for the first time in approximately 70 years. Currently, in Japan, infection control measures are being advanced, such as through the implementation of vaccinations, with the objective of preventing the occurrence and spread of infectious diseases.
In terms of healthcare provision, Japan had 317,162 physicians engaged in medical care, or 249.9 physicians per 100,000 population, in 2016. While the number of physicians providing healthcare is increasing nationwide, their uneven distribution has become a problem due to the lack of physicians specializing in certain areas of medicine and the lack of physicians operating in regional parts of the country.
As of October 1, 2016, the number of hospitals in Japan (excluding medical clinics and dental clinics) totaled 8,442. The number of hospital beds amounted to 1,561,005 (1,229.8 per 100,000 population).
National medical care expenditures have been increasing gradually. In fiscal 2015, the expenditures totaled 42.4 trillion yen or 10.91 percent of Japan's national income. The cost of medical care per person averaged 333,300 yen in fiscal 2015.
Medical costs for treating the latter-stage elderly in fiscal 2015 were 15.1 trillion yen, or about one-third of national medical care expenditure, and accounted for 3.88 percent of the national income. The per-capita cost of medical care for the latter-stage elderly averaged 949,070 yen for the year. The percentage of national medical care expenditures accounted for by medical care costs for the late-stage elderly decreased when the age of persons eligible to receive later-stage elderly medical care was raised in a phased manner over 5 years from 70 years to 75 years old in October 2002, but in recent years, there has been a slight uptrend.
Chapter 16 Education and Culture (PDF:3,716KB)
1. School-Based Education
Japan's primary and secondary education is based on a 6-3-3 system: 6 years in elementary school, 3 years in lower secondary school, and 3 years in upper secondary school. The period of compulsory schooling is the 9 years at elementary and lower secondary schools. Higher education institutions are universities, junior colleges, and colleges of technology. Other education establishments include kindergartens, which provide pre-school education, and schools for special needs education. There are also specialized training colleges and miscellaneous schools for a wide range of vocational and other practical skills learning. In order to promote diversity of the school education system, unified lower-upper secondary schooling began at some schools in 1999. Furthermore, in 2016, compulsory education schools, where compulsory education for elementary schools to lower secondary schools is carried out consistently, were established. On an additional note, the school year in Japan starts in April and ends in March of the following year.
Of the March 2017 upper secondary school graduates, 54.8 percent went straight on to enter a university, junior college, etc. The ratio of upper secondary school graduates who entered a university or junior college in 2017 was 57.3 percent (56.8 percent of male and 57.7 percent of female graduates), including graduates from previous years.
As of May 1, 2017, a total of 125,834 foreign students were enrolled in Japanese junior colleges, universities, and graduate schools. Of the total foreign students, 88.9 percent were from Asia, including 63,283 from China, 13,508 from Vietnam and 11,225 from the Republic of Korea.
Fiscal 2015 public expenditure on education in Japan was 23 trillion yen, which is equivalent to 14.0 percent of the net expenditure of national and local governments.
Fiscal 2016 school expenditure by households with children attending public school averaged 60,043 yen per elementary school pupil, 133,640 yen per lower-secondary school student and 275,991 yen per upper-secondary school student.
2. Lifelong Learning
In recent years, people's demand for learning has been increasing and the contents are becoming more diverse and advanced. This has raised more and more expectations for the realization of a "Lifelong Learning Society" in which people are able to freely select learning opportunities during their life, and their learning outcomes are evaluated appropriately.
Today, in order to develop a society where people have the freedom to continue learning throughout their lives, efforts are being made to develop learning opportunities such as school education, social education, cultural activities, sports activities, recreational activities, volunteer activities, and corporate in-house education. In providing places and opportunities for such lifelong learning, educational institutions, social education facilities (public halls, libraries, museums, and sports facilities, etc.) play a vital role.
3. Leisure Activities
The results of the "2016 Survey on Time Use and Leisure Activities" conducted on people living in this country, aged 10 and over, show that the amount of free time each person has spent was 6 hours and 22 minutes, which was the time remaining after activities that were physiologically necessary (sleeping, eating, etc.) and societally essential (work, housework, etc.).
The participation rate for "hobbies and amusements" was 87.0 percent, and when separated according to gender, 87.2 percent was male and 86.8 percent was female. In addition, when separated according to the type of leisure, "watching movies in places other than cinemas" was the highest at 52.1 percent, followed by "listening to music on CD and smartphone, etc." at 49.0 percent, and "watching movies at the cinema" at 39.6 percent.
The participation rate for "sports" was 68.8 percent (percentage of people (aged 10 and over) who engaged in the activity within the past 12 months), and when the rate was separated according to gender, 73.5 percent was male and 64.4 percent was female. In addition, when separated according to the type of sport, "walking or light physical exercise" was the highest at 41.3 percent, followed by "training with gym equipment" at 14.7 percent.
4. Publishing and Mass Media
The total number of books and magazines published in Japan during 2016 was 1,138 million and 2,304 million, respectively. Of the latter, 1,516 million were monthlies and 788 million were weeklies.
A total of 78,113 new book titles were released in 2016. The number of magazine titles published was 3,589 (including 1,934 monthlies and 94 weeklies) as of the end of March 2017. In recent years, there has been an increasing trend in the popularization of the Internet and e-books.
A total of 117 daily newspapers were in circulation, and the penetration rate was 0.75 newspapers per household as of October 2017.
Japan has a public broadcasting network (NHK: Nippon Hoso Kyokai, or Japan Broadcasting Corporation), as well as commercial networks. NHK is the pioneer broadcasting station in Japan, and has been funded through fees paid by subscribers.
Major broadcasting services can be divided roughly into three categories: terrestrial, satellite, and cable television. Terrestrial digital broadcasting was launched in some areas of the Kanto, Kinki and Chukyo regions in December 2003 and then also in other areas, including all prefectural capitals, in December 2006. By March 31, 2012, analog broadcasting ended and was completely replaced with terrestrial digital broadcasting in all parts of Japan. Currently, promotion of the receiving environment is being steadily conducted on broadcasting services in 4K and 8K, which have 4 and 16 times the pixel number of existing full high definition, towards the commencement of actual broadcasting on December 2018.
In 2017, advertising expenditures in the four major mass media types in Japan (newspapers, magazines, radio and television) totaled 2.8 trillion yen, down compared with the previous year. This accounted for 43.7 percent of total advertising expenditures, which were 6.4 trillion yen. Spending on Internet advertising reached 1.5 trillion yen (up 15.2 percent from the previous year), maintaining a double-digit growth rate. This amounted to 23.6 percent of the total advertising expenditures.
5. Cultural Assets
Throughout the long history, Japan has been endowed with an abundance of valuable cultural assets, including works of art, historic landmarks, and many natural monuments. To pass on this cultural heritage to future generations, the Japanese government has accorded many of the most important assets as national treasures, designated important cultural properties, historic sites, places of scenic beauty, or natural monuments, based on the Act on Protection of Cultural Properties. In addition to preserving cultural assets, measures to utilize such assets are being established, such as expansion of viewing opportunities through exhibitions.
As of June 1, 2018, 13,166 items were assigned as designated important cultural properties, of which 1,110 were classified as national treasures. In addition, the government has provided support for such activities as theatrical performances, music, handicrafts, and other important intangible cultural properties. It also has worked to preserve important folk-cultural properties, such as annual cultural events and folk performing arts, as well as to train people to carry on such traditions.
Japan ratified the UNESCO World Heritage Convention (the Convention Concerning the Protection of World Cultural and Natural Heritage) in 1992.
In July 2017, "Sacred Island" of Okinoshima and Associated Sites in the Munakata Region were registered as Japan’s 21st World Heritage, as a unique "repository" of ancient sacrifices, and as evidence indicating what sacrifices called for in praying for safety of maritime navigation associated with active exchanges among the Japanese archipelago, Korean Peninsula, and Asian Continent that were carried out from the 4th century to the end of the 9th century.
In June 2018, sites connected to Hidden Christian Sites in the Nagasaki Region have been registered as the 22nd World Heritage site in Japan. It is a series of sites that testify the traditions of the hidden Christians in Nagasaki and Amakusa district who maintained their faith while co-exisitng with the extant society and religions, whose faith began from the 16th century when Christiantiy was introduced to Japan, a country of the Far East, and continued through the ban on religion during the Tokugawa shogunate.
In 2006, the UNESCO Convention for the safeguarding of intangible cultural heritage entered into force. As of May 2018, Japan has 21 entries on its list, including: Nogaku Theater, Ningyo Johruri Bunraku Puppet Theater, Kabuki Theater (the kind of Kabuki performed using a traditional method of acting and directing), and Washoku, the traditional dietary culture of Japan.
Chapter 17 Government System (PDF:3,716KB)
1. Separation of Powers
The Constitution of Japan, which went into effect on May 3, 1947, is based on three core principles: sovereignty of the people, respect for fundamental human rights and pacifism. To control governmental power effectively through checks and balances, governmental power is separated into three independent branches: legislative, executive and judicial, and each contains a separate set of agencies and personnel.
2. Legislative Branch
The Diet is the highest organ of state power, and is the sole law-making organ of the State. The Diet consists of the House of Representatives and the House of Councillors. Both Houses consist of elected members, representative of all the people.
The most important responsibility of the Diet is to enact legislation. The Diet also has the authority to fulfill a number of additional functions, including the deliberation and passage of the budget and other matters of fiscal importance, the approval of treaties, the designation of the Prime Minister and the initiation of motions to amend the Constitution. Each House may conduct investigations relating to the government, and demand the presence and testimony of witnesses, and the production of records. For the Diet to pass a resolution, the agreement of both Houses of the Diet is necessary. However, when the two Houses differ in their resolutions regarding legislative bills, draft budgets, the approval of treaties or the designation of the Prime Minister, under the terms of the Constitution, the decision of the House of Representatives overrides that of the House of Councillors.
The term of office for Diet members is set by the Constitution. Members of the House of Representatives serve a four-year term, while members of the House of Councillors, six years. Elections for the latter are held every three years, so that one half of the seats are contested in each election.
The House of Representatives has 465 members. Of these, 289 are elected under a single-seat constituency system, while 176 are elected under a proportional representation system in which the nation is divided into 11 regions. The last general election was held in October 2017. The House of Councillors has 242 members, of whom 96 are elected through proportional representation, and 146 are elected as representatives from 45 electoral districts of the nation, i.e. prefectures. The last regular election was held in July 2016.
In June 2015, revisions to the Public Offices Election Law, which consist mainly of lowering the voting age from 20 to 18 years or older, were established and promulgated. The revisions were applied starting with the abovementioned House of Councillors election, which was officially announced in June 2016. Furthermore, both men and women above the qualifying age are eligible to run in elections. The qualifying age for members of the House of Representatives is 25 years or older, while the qualifying age for members of the House of Councillors is 30 years or older.
3. Executive Branch
The Cabinet exercises its executive power on the basis of the laws and budgets adopted by the Diet. The Cabinet, composed of the Prime Minister and other Ministers of State, is collectively responsible to the Diet, regarding the exercise of the executive power. The Prime Minister is elected in the Diet from among its members. The majority of the ministers of state to be appointed by the Prime Minister must be Diet members. Thus, Japan adopts the parliamentary Cabinet system, in which the organization and existence of the Cabinet rest on the confidence in the Diet.
The Cabinet's powers include the following: (i) implementing laws; (ii) engaging in foreign diplomacy; (iii) signing treaties; (iv) overseeing the operational affairs of public officers; (v) formulating a budget and submitting it to the Diet; (vi) enacting Cabinet orders; and (vii) deciding amnesty. In addition, the Cabinet powers also include naming the Chief Justice of the Supreme Court and appointing other judges. The Cabinet also gives advice and approval to the Emperor in matters of state, and bears the responsibility for this.
4. Judicial Branch
Judicial power resides in the courts and is independent from the executive branch and the legislative branch.
The Constitution provides for the establishment of the Supreme Court as the highest court with final judgment, while the Court Act provides for four lower-level courts (High Court, District Court, Family Court and Summary Court). At present, there are eight High Courts, 50 District Courts, 50 Family Courts, and 438 Summary Courts throughout the nation.
To ensure fair judgments, Japan uses a three-tiered judicial system. The first courts in the court hierarchy are the District Courts, the second are the High Courts, and the highest court is the Supreme Court. The system allows a case to be heard and ruled on up to three times in principle, should a party involved in the case so desire. The Summary Courts and Family Courts handle simple cases, domestic relations and cases involving juveniles as first instances.
The Supreme Court has the authority to deliver the final judgment on the legitimacy of any law, ordinance, regulation, or disposition. It is chaired by the Chief Justice and 14 judges.
A lay judge system began in May 2009. This is a system under which citizens participate in criminal trials as judges to determine, together with professional judges, whether the defendant is guilty or not and, if found guilty, what sentence should apply. What is hoped for is that the public's participation in criminal trials will make citizens feel more involved in the justice process and make the trials easier to understand, thus leading to the public's greater trust in the justice system. A total of 10,514 people were tried in lay judge trials held between the start of the system and December 2017.
5. Local Governments
The affairs of local governments are conducted on two levels in Japan: by the prefectures and by the municipalities within each prefecture. As of April 1, 2018, Japan has 47 prefectures, within which there are 1,718 municipalities, plus the 23 Cities in metropolitan Tokyo. In order to strengthen the administrative and fiscal foundation of the municipalities, municipal mergers were promoted by law. Consequently, the number of municipalities was reduced by nearly half from the 3,232 existing at the end of March 1999.
Municipalities that satisfy certain population criteria (i.e., 500,000 people or more) are eligible for designation as "Ordinance-designated cities". This designation gives them administrative and fiscal authority equivalent to those of prefectures. With the addition of Kumamoto City in April 2012, there are presently 20 cities that have earned this designation. (Administrative map[PDF:873KB])
Some of the publications on this site are in PDF. To view them you will need to have Adobe Reader. Please click the graphic link to download Adobe Reader.