Thinking Citizen Blog —The Economy of Japan (Part One): What Should Every Thinking Citizen Know?
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s Topic: The Economy of Japan (Part One): what should every thinking citizen know?
Two weeks ago, France. Last week, Germany. Today, Japan. In terms of size, the Japanese economy is comparable to that of Germany, India, and the UK at roughly $4 trillion in GDP.
You could call these the second tier of economic powers — after the behemoths of China and the US. In terms of GDP per capita, Japan, at $33,000 is far above China at $12,720 and India at $2,410. but far below Germany ($48,717), the UK ($46,125), and the US ($76,329).
Who would have predicted in 1987 that the Japanese economy would fall from 17% of global GDP to 4%? What economic surprises lie in store for the next few decades?
Today, a few more notes. Experts — please chime in. Correct, elaborate, elucidate.
BETWEEN 1968 AND 2010 THE JAPANESE ECONOMY WAS THE SECOND LARGEST IN THE WORLD!
1. “The Plaza Accord in 1985, an agreement among major economies to devalue the American dollar relative to the Japanese yen, led to a rapid appreciation of the yen.”
2. “The burst of the Japanese asset price bubble in the early 1990s has resulted in a long period of economic stagnation known as the “Lost Decades”, characterized by extremely low or negative growth and deflation.”
3. “From 1995 to 2007, the country’s GDP fell from $5.33 trillion to $5.04 trillion in nominal terms.”
NB: “At the beginning of the 21st century, the Bank of Japan set out to encourage economic growth through a novel policy of quantitative easing, aiming to end deflation and eventually achieve 2% inflation. The increased international tension brought about by events such as the Russian invasion of Ukraine in 2022 finally helped the country achieve the inflation target, and the negative interest rate policy since 2016 was ended in March 2024.”
THE DEMOGRAPHIC CLIFF — population peaked at 128 million in 2010, scheduled to decline to 100 million by 2050 and could be under 60 million by 2100; fertility rate is now 1.2
1.”In 2023, the median age of Japanese people was projected to be 49.5 years, the highest level since 1950, compared to 29.5 for India, 38.8 for the United States and 39.8 for China. Japan has the second-highest median age in the world (behind only Monaco). An improved quality of life and regular health checks are just two reasons why Japan has one of the highest life expectancies in the world.”
2. “The fertility rate among Japanese women was around 1.4 children per woman from 2010 to 2018. From then until 2022, the fertility rate further declined to 1.2. Apart from a small baby boom in the early 1970s, the crude birth rate in Japan has been declining since 1950; it reached its currently lowest point of 6.6 births per thousand people in 2023.”
THE JAPANESE STOCK MARKET — IT HAS JUST RECENTLY RETURNED TO ITS 1989 HIGH!
1. The largest cap stocks in the Nikkei are Toyota ($275 bn), Mitsubishi ($127 bn), and Hitachi ($107 bn), Keyence ($107 bn), and Sony ($104 bn).
2. In 2020 Warren Buffett started buying stakes in Japanese trading houses. Then he increased his stakes after they dropped further. Then he tripled his money.
3. “It was awfully easy money, It was like having God just opening a chest and just pouring money into it.” (Charlie Munger, Buffett’s business partner). Yeah, right. How many investors lost their shirts trying to call the bottom in Japan between 1993 and 2013?
NB: Did you ever invest in Japan? How did it go?
List of countries by GDP (nominal) per capita — Wikipedia
This analyst predicted the Nikkei would cross 40,000. Here’s where he thinks it’ll go next
Largest Japanese companies by market capitalization
QUOTE OF THE MONTH
“Make your own Bible. Select and collect all the words and sentences that in all your readings have been to you like the blast of a trumpet.”
- Ralph Waldo Emerson
My spin — then periodically review, re-rank, and exchange your list with those you love. I call this the “Orion Exchange” because seven is about as many as any human can digest at a time. Game?
ATTACHMENTS BELOW:
#1 A graphic guide to justice (9 metaphors on one page).
#2 “39 Songs, Prayers, and Poems: the Keys to the Hearts of Seven Billion People” — Adams House Senior Common Room Presentation, (11/17/20)
NB: Palestine Orion (Decision) — let’s exchange Orions, let’s find Rumi’s field (“Beyond all ideas of right and wrong, there is a field. Meet me there” Rumi, 13 century Persian Sufi mystic)
THE LAST FOUR YEARS OF POSTS ORGANIZED THEMATICALLY INTO FOURTEEN BOOK-LENGTH PDFs:
PDF with headlines — Google Drive
YOUR TURN — Please share:
a.) the coolest thing you learned this week related to business, economics, finance.
b.) the coolest thing you learned in your life related to business, economics, finance.
c.) anything at all related to business, economics, finance.
d.) anything at all
