Country Profile: Per capita income a draw in Japan
The red disk in the middle of the flag represents the sun without rays. The sun plays an important role in Japanese mythology and religion as it is said the emperor is a direct descendant of the sun goddess, Amaterasu. The flag itself is called Hinomaru, which means “circle of the sun.”
Location: The island chain between the North Pacific Ocean and the Sea of Japan is slightly smaller than California.
Total Population: 126 million
Government: Parliamentary constitutional monarchy. Emperor Naruhito retains the throne as a symbol of national unity, but elected politicians hold actual decision-making power.
Religion: Shintoism (70.4%) and Buddhism (69.8%), with many people practicing both.
Economy: The third largest economy in the world after the U.S. and China, Japan is also the fourth largest importer of U.S. products as goods exports to Japan reached $75.7 billion in 2018, while service exports were $45.4 billion. A per capita income of $43,118 bolsters Japan’s strength as a consumer market, which itself is broad-based and sophisticated. The country’s aging population, however, is impacting its society and economy as it shapes demand in various segments such as medical services, pharmaceuticals, leisure and travel, and financial services. Japan entered the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in December 2018 without the U.S. The two countries negotiated a limited bilateral trade deal in 2019, with talks expected to continue.
News note: Though the Olympic Games were postponed to 2021 because of the coronavirus pandemic—an unprecedented move—the Games will still carry the official moniker of Tokyo 2020. Sponsors in Japan have been using the Tokyo 2020 logo since 2015, official stores have been selling merchandise since 2018, and advertising around Japan is already prominent.
GDP (official exchange rate): $4.96 trillion
Currency: Japanese yen (conversion rate at press time: 1,000 JPY equals $9.14 USD).
Franchising in Japan: The franchise model is popular and well understood in Japan, with U.S. restaurant and retail concepts accounting for more than 50 percent of the market. In the service sector, a variety of concepts have developed, particularly in education and fitness-related businesses, reflecting Japan’s declining population and the increase in health consciousness. An understanding and appreciation of Japanese business culture is crucial for U.S. franchises looking to enter the market; indifference to local customs conveys a lack of commitment. Consumers and business people have high expectations of excellence in product and service quality; pay close attention to appearance, along with after-sales service.
Ease of doing business rank by World Bank: 29.