The economy of Japan is a highly developed/advanced social market

economy, often referred to as an East Asian model.[28] It is the third-

largest in the world by nominal GDP and the fourth-largest by purchasing
power parity (PPP).[29][30] It is the world's second-largest developed
economy.[31] Japan is a member of both the G7 and G20. According to
the IMF, the country's per capita GDP (PPP) was at $51,809 (2023).[32] Due
to a volatile currency exchange rate, Japan's GDP as measured in dollars
fluctuates sharply. The Japanese economy is forecast by the Quarterly
Tankan survey of business sentiment conducted by the Bank of Japan.
[33]
The Nikkei 225 presents the monthly report of top blue chip equities on
the Japan Exchange Group, which is the world's fifth-largest stock
exchange by market capitalisation.[34][35] In 2018, Japan was the
world's fourth-largest importer and the fourth-largest exporter.[36] It has the
world's second-largest foreign-exchange reserves, worth $1.4 trillion.[37] It
ranks 5th on the Global Competitiveness Report.[38] It ranks first in the world
in the Economic Complexity Index.[39] Japan is also the world's fourth-
largest consumer market.[40]
Japan is the world's second-largest automobile manufacturing country.[41] It
is often ranked among the world's most innovative countries, leading
several measures of global patent filings. Facing increasing competition
from China and South Korea,[42] manufacturing in Japan currently focuses
primarily on high-tech and precision goods, such as integrated
circuits, hybrid vehicles, and robotics.[43] Besides the Kantō region,[44][45][46]
[47]
the Kansai region is one of the leading industrial clusters and
manufacturing centers for the Japanese economy.[48] Japan is the world's
largest creditor nation.[49][50][51] Japan generally runs an annual trade
surplus and has a considerable net international investment surplus. Japan
has the third-largest financial assets in the world, valued at $12 trillion, or
8.6% of the global GDP total as of 2020.[52][53] As of 2022, 47 of the Fortune
Global 500 companies are based in Japan.[54] The country is the third-
largest in the world by total wealth.
Japan formerly had the second-largest assets and wealth, behind only the
United States in both categories, until it was surpassed by China in both
assets and wealth.[55][56] Japan also had the world's second-largest
economy by nominal GDP behind the United States. In 2010, it was
surpassed by China.[57]
Japan's asset price bubble collapse in 1991 led to a period of economic
stagnation known as the "lost decade", sometimes extended to a "lost 20
years" or greater. From 1995 to 2007 GDP fell from $5.33 trillion to $5.04
trillion in nominal terms.[58] From the early 2000s, the Bank of Japan set out
to encourage economic growth through a novel policy of quantitative
easing.[59][60] Debt levels continued to rise in response to the national crises,
such as the Great Recession in 2008, the Tōhoku earthquake and
tsunami and Fukushima nuclear disaster in 2011, and with COVID-19
pandemic in 2020 and 2021. As of 2021, Japan has significantly higher
levels of public debt than any other developed nation at approximately
260% of GDP.[61][62] 45% of this debt is held by the Bank of Japan.[61] The
Japanese economy faces considerable challenges posed by an aging and
declining population, which peaked at 128 million in 2010 and has fallen to
125.5 million as of 2022.[63] Projections show the population will continue to
fall, potentially to below 100 million by the middle of the 21st century.[64][65]