Background Information

Japan, otherwise known as, The Land of Rising Sun, is located in Eastern Asia and is slightly smaller than California. With a population of 127,368,088 the majority of the population are Japanese. The people are 98. 5% Japanese, . 5% Korean, . 4% Chinese, and . 6% other. The average age of the people is 45. 4 years, 0-14 years makes up 13. 5% of the population, 62. 6% 15-64, and 23. 9% other. Much of the population practice both Shintoism and Buddhism religions, while about 9% follow other religions. Japan still has an emperor as a symbol of national unity, and there are also elected politicians that have decision-making power.

After experiencing the strongest earthquake in March 2011, Japan’s economy was crippled. The electricity is still tight because the nuclear plants were shut down after the Fukushima Daiichi nuclear reactors were damaged by the earthquake and tsunami. There were $235-$310 billion in damages and the GDP declined by . 5%. The Prime Minister, Yoshihiko Noda has proposed to open service and agricultural service sectors to greater foreign competition and to boost exports by joining US-led Trans-Pacific Partnership. The United States has urged Japan to join the Trans-Pacific Partnership for the last two years.

In an effort to regain public support the Prime Minister will likely decide to join the pact. Farmers in Japan oppose joining the pact, but it is supported by consumers and industry groups. If Japan joins the free trade pact, immediately after Parliament would be dissolved for national elections (www. post-gazette. com). The major cities and populations are Tokyo 35. 507 million, Osaka-Kobe 11. 325 million, Nagoya 3. 257 million, Fukuoka-Kitakyushu 2. 809 million, and Sapporo 2. 673 million. The ports are located in Chiba, Kawasaki, Kobe, Mizushima, Moji, Nagoya, Osaka, Tokyo, Tomakomai, and Yokohmam.

There are over 175 airports throughout Japan (www. cia. gov). Japan’s major agriculture products are rice, sugar beets, vegetables, fruit, pork, poultry, dairy products, eggs, and fish. Japan has the largest fishing fleets that makes up 15% of the World’s global catch. Japan’s major industries are motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, and chemicals. The Yen After the earthquake and tsunami the yen strengthened. This may seem backwards because of all the expenses Japan had to cover because of the damage.

This particular earthquake and tsunami have been recorded as the most costliest natural disaster ever. After the storm the yen reached a post World War II high of 76 yen to the dollar. There are a few reasons why the yen may have strengthened. There was thought to be a dramatic increase in the buying of Japanese equities because bargain hunters were looking for any value in the Japanese market. Many didn’t think that the disaster would effect the value of the stocks for long, and they return to market value shortly after.

Another reason was that the market felt that the Japanese government might have had to liquidate part of their large non-yen denominated investment to fund relief. The Japanese government is the second largest foreign owner of United States Treasuries, with $886 billion, and the market felt that they might have to liquidate part of this. The Japanese government became concerned with how strong the yen was getting because the economy is based on exports and currency rate fluctuations. The change in the yen has also affected other countries because Japanese businesses don’t need as many exports from other countries.

Thailand lost at least $1 billion in exports to Japan because of this. The automotive industry was the most affected by the strengthening of the yen. Japan has also increased imports of fossil fuels to make up for lost power output (www. investopedia. com). Labor Service Due to the earthquake and tsunami, Japan has a long road to economic and employment recovery. The labor force is 65. 91 million, with 3. 9% agriculture, 26. 2% industry, and 69. 8% services (www. cia. gov). With an unemployment rate of 4. 3%, 2. 76 million Japanese are without jobs. 16% of the population is below the poverty line.

The Yen continues to get stronger and it is hurting exports and preventing businesses from expanding. Many employers however, are hiring again and looking forward to future growth. Japan’s population has more than 50% going on to higher education. Only 65% of college-educated women are employed. This is a lost economic opportunity. If this number increased to 80% there would be 8. 2 million more workers. Many women don’t return to work after having their first child, this is because of insufficient child care and cultural norms. Many of the foreign workers left because of the earthquake and storm and Japan is urging them to return.

80% of the businesses are struggling to find employees that are qualified for specific jobs, right now the hardest job to fill is sales representatives (www. goinglobal. com). Economy In 2011 Japan was the 4th largest economy in the world. China passed Japan in 2001, while India passed Japan in 2011. Japan’s economy is strong because of close interlocking structures of manufacturers, suppliers, and distributors. The GDP of Japan in 2011 was $4. 497 trillion, which put Japan in the 5th highest GDP globally. The United States had $15. 29 trillion, China $11. 44 trillion, and India $4. 515 (www. cia. gov).

Japan is now in a deficit. This is Japan’s first annual deficit since 1963, before 2011 Japan has always had a huge trade surplus. The earthquake and tsunami played a role in this, as well as imports were inflated by higher oil prices and larger imports of energy following the shutdown of nuclear plants (www. economist. com). The economy is clearly struggling. Employment has been challenged, the population is now aging very rapidly, and there’s not a lot of immigration into the country. Many Japanese are seeing this as a wakeup call and that there is too much production concentrated within Japan and not enough over seas.

Before the earthquake and tsunami 30% of the population was dependent on nuclear power, and today it’s 0. Japan doesn’t have a lot of resources so they need other alternatives. Japan has the basics to have a successful economy, educated people, capital, and ideas. The economy may be struggling but that may be the push Japan needs to head in the right direction and to start buying companies overseas (www. goldmansachs. com). Trade: Exports and Imports In 2011, Japan had exported $787 billion up from $730. 1 billion in 2010; 13. 6% motor vehicles, 6. 2% semiconductors, 5. 5% iron and steel products, 4.

6% auto parts, 3. 5% plastic materials, and 3. 5% power generating machinery. China received 19. 7% of the exports, 15. 5% United States, 8% South Korea, 5. 2% Hong Kong, 4. 6% Thailand (www. cia. gov). In 2010, China received the highest amount of exports from Japan at $149. 5 billion, which was a 36. 2% increase from 2009. The United States exported $120. 5 billion, an increase of 26. 4%. South Korea exported $62. 4 billion, an increase of 31. 9%. Hong Kong exported $42. 3 billion, an increase of 32. 7%. Thailand exported $34. 2 billion, an increase of 54. 1%. Malaysia exported $17. 6, an increase of 37.

1%. Australia exported $15. 9 billion, an increase of 30. 4%. Finally United Kingdom exported $14. 2 billion, an increase of 20% (suite101. com/). Japan’s leading export is motor vehicles. With four of the top leading companies in the world, Japan exported 13. 6% motor vehicles. Japan’s number one car manufacturer is Toyota Motor Corporation, located in Aichi, Japan. Toyota was funded in 1935, by Kiichiro Toyoda. In the 1950’s, Toyota was first exported to the United States with Toyota Motor Sales U. S. A. , Inc. It was the first Japanese cars in the states. In the 1970’s Toyota was beyond Japan.

In the 90’s Japan had produced more than 100 million Toyota vehicles in Japan (www. edmunds. com). Honda Motor Company in Tokyo, Japan was founded by Soichiro Honda. In 1959 it was the world’s largest motorcycle maker. In 1963 they made their first car. Honda was the first Japanese car maker to establish factories in the United States, and is now Japan’s second largest car maker (www. autozine. org). Nissan, Japan’s third largest car manufacturer was founded in 1933. By the 60’s Nissan had a strong reputation in both America and Japan. In the 70’s United States sales passed the quarter-million mark.

In the 80’s the first Nissan truck was manufactured in the United States. Finally in the 2000’s sales were doubled (www. nissanusa. com). Suzuki Motor Corporation, founded in 1952 by Michio Suzuki, first had a power free moped. In 1967, they had their first overseas plant in Thailand. In 1981, Suzuki entered a marketing and production alliance with General Motors. In 1986, Suzuki Motor Corporation established themselves as the fourth largest automaker, and they are in more than 190 countries (www. fundinguniverse. com). Semiconductors are Japan’s second leading export, at 6. 2%.

Japan has two major companies that produce semiconductors, Toshiba and Renesas Electronics. Toshiba has 60% of the company’s net sales domestically. It’s known as one of Japan’s general electric companies. In 1986 semiconductor sales increased by 55% when they signed contracts with France and West Germany. Toshiba is the second largest semiconductor manufacturer in the world (www. fundinguniverse. com). Renesas Electronics just merged and was created in April 2010. It is currently in 20 different countries (www. am. renesas. com). The fishing industry is another large export for Japan, accounting for 15% of the world’s catch.

In 2000 4,989,354 tons were caught which was number three in the world. Japan has cold and warm currents, which attract the fish. In 1986, 2769 whales were caught which were used as food and byproducts. However in 1987 commercial whaling was ended (www. nationsencyclopedia. com). There are four types of fishing that makeup Japan’s catch. The first is coastal, which usually comes from small boats. Independent fishermen sell their caught fish in order to make a living. They sell what they catch to wholesalers who then sell the fish. With supermarkets emerging in Japan, they don’t deal with wholesalers and this is hurting coastal fishing.

There is also a reduction of resources which makes coastal fishing difficult. Deep-sea fishing makes up about half of the market. There’s a 200 nautical mile zone because past that there have been restrictions from Japan on fishing. It’s also stated in the United Nations Convention on the Law of the Sea. Another type of fishing is farming the seaweed, carp, yellowtail, snapper, and eel. This has killed some reef life though (internationalbusiness. wikia. com). Japan imported a total of $807. 6 billion in 2011 up from $639. 1 billion in 2010; 15. 5% petroleum, 5. 7% liquid natural gas, 3. 9% clothing, 3. 5% semiconductors, 3.

5% coal, 2. 7% audio and visual apparatus. Japan imported from China 21. 5%, United States 8. 9%, Australia 6. 6%, Saudi Arabia 5. 9%, United Arab Emirates 5%, and South Korea 4. 7% (www. cia/gov). In 2010, China exported $153. 2 billion to Japan. The United States exported $69. 1 billion. Australia exported $44. 7 billion. Saudi Arabia exported $36 billion. The United Arab Emirates exported $29. 3 billion. South Korea exported $28. 1 billion. Thailand exported $21 billion (suite101. com/). Japan and the United States The earliest contact the United States had with Japan was through merchants and explorers.

First trade treaty was established in 1852, the Convention of Kangawa. In World War II Japan and the United States were forced against each other when Japan bombed Pearl Harbor in 1941. The war finally ended in 1945 after the United States dropped an atomic bomb on Hiroshima and Nagasaki, resulting in many casualties and a lot of damage. On August 14, 1945 Japan surrendered. President Harry Truman appointed General Douglas MacArthur as the Supreme Commander of the Allied Powers in Japan. He was in charge of reconstructing Japan, which included politically as well.

The New Constitution of Japan was written which included democratic principles, educational and economic reform, and demilitarization. General MacArthur returned control to Japan in 1952 with the Treaty of San Francisco (usforeignpolicy. about. com). “Under the treaty the allied powers recognized the full sovereignty of Japan. Japan renounced all rights and claims on various countries and islands including Korea, Taiwan, Hong Kong, and Antarctica. All occupation forces were to be withdrawn from Japan (except as outlined under new treaties with and agreed upon by Japan).

Japan agreed to enter into negotiations on repayment of reparations to the Allied Powers for damage and suffering it caused during the war and Japan agreed to the judgments of the International Military Tribunal for the Far East and other Allied War Crime Courts both within and outside Japan (homehearts. com). ” Since the treaty the United States – Japan Alliance has been an anchor of U. S. security role in East Asia. It benefits the United States because they have a deployment of 53,000 troops and other U. S. military assets in the Asia-Pacific. It benefits Japan because it allows them more room in dealing with China and North Korea.

Japan is very important economically to the United States. Japan and the United States had $267 billion goods and services traded with one another in 2011. $113 billion of that the United States exported, while the remaining $154 was imported from Japan. In goods, Japan is the United States fourth largest country they trade with. The United States exported $66 billion and imported $129 billion to Japan. In services the United States exported $47 billion and imported $25 billion with Japan. The United States exported; optic and medical instruments $7. 7 billion, machinery $5. 7 billion, cereals $5.

6 billion, electrical machinery $5 billion, aircraft $4. 8 billion, coarse grains $3. 9 billion, red meats $2. 8 billion, wheat $1. 4 billion, and soy beans $954 million to Japan. The United States imported; vehicles $41 billion, machinery $31. 2 billion, electrical machinery $18. 3 billion, optic and medical instrument $6. 9 billion, organic chemicals $3 billion, snack foods $54 million, wine/beer $53 million, processed fruit and vegetables $36 million from Japan (www. ustr. gov/countries). The United States imports $154 billion from Japan, while Japan only imports $113 billion from the United States.