Japan profile

Demography and Health

Japan, as of 2024, is a populous, highly developed society with about 124 million people, placing it among the world’s most populous nations. The country benefits from exceptionally high life expectancy—84 years at birth in 2023—reflecting advanced healthcare, high standards of living, and strong social services. By contrast, the birth rate remains extremely low at 6.0 per 1,000 people (2023) and the crude death rate is 13.0 per 1,000 (2023), underscoring a society that is rapidly aging and facing potential pressures on pension systems, care provision, and the labor force. Child mortality is very low (2.4 per 1,000 live births in 2023), signaling effective maternal and child health care, though the suicide mortality rate of 17.4 per 100,000 (2021) highlights ongoing mental health and societal challenges that require targeted policy responses. Net migration rose to about 153,000 in 2024, indicating a gradual contribution of migrants to the demographic mix, but it remains modest relative to the total population.

Health expenditure is substantial, with current health expenditure at 11.4% of GDP in 2022 and domestic general government health expenditure per capita, PPP, of about 4,634 International US dollars (2022), suggesting strong public support for health services. The country also invests heavily in knowledge and innovation—R&D expenditure equals 3.41% of GDP in 2022, and resident patent activity reached 222,452 applications in 2021, ranking among the world’s top three. Together, these indicators point to a health system that is well-supported and integrated with cutting-edge research, contributing to one of the longest life expectancies globally. Yet social challenges persist, including mental health concerns and an aging population whose costs and care needs will influence future fiscal and health system planning.

Overall, Japan shows high human development outcomes (life expectancy, education implied by health and innovation capacity, and low under-5 mortality) alongside demographic headwinds that will shape labor markets, productivity, and intergenerational equity in the coming decades. The data suggest a society with strong preventive care, advanced medical infrastructure, and robust investment in science, but with aging demographics and social issues that require coordinated policy action.

Economy

Japan’s economy is mature, highly productive, and technology-driven. GDP per capita stands at about $32,476 in 2024, with a purchasing power parity (PPP) measure around $51,685, underlining a high standard of living relative to many peers. The country has a strong export sector, with exports of goods and services accounting for 21.9% of GDP in 2023 and imports at 23.3% of GDP, reflecting a highly open and trade-dependent economy. The large share of imports relative to exports also signals substantial domestic demand and the importance of global supply chains for manufacturing and consumption.

Japan is a leading innovator, evidenced by high-technology exports totaling roughly $102.5 billion in 2024 (second place worldwide in absolute terms) and a robust patent ecosystem (resident patent applications around 222,452 in 2021, ranking third globally). Research and development intensity remains strong at 3.41% of GDP (2022), supporting competitiveness in advanced industries such as electronics, automotive, and precision machinery. Economic performance is further underpinned by a resilient current account balance of about 4.8% of GDP in 2024, indicating a surplus that supports macroeconomic stability and external sustainability.

Financial openness shows mixed signals: net foreign direct investment (FDI) inflows amounted to about 0.427% of GDP in 2024, and while financial markets are deep and sophisticated, FDI penetration as a share of GDP remains relatively modest by some standards. Inflation sits at 2.74% in 2024, a moderate rate consistent with a mature economy seeking balance between price stability and growth. The unemployment rate is low at 2.6% (2023), reflecting a tight labor market, though this must be reconciled with an aging workforce and structural labor market frictions. Innovation, governance quality, and public investment combine to sustain Japan’s high-value manufacturing and advanced services sector, even as global competition and demographic shifts pose longer-run challenges.

Trade and Investment

Japan’s trade profile is that of a highly integrated, export-oriented economy with strong performance in high-value goods. Exports represent 21.9% of GDP in 2023, while imports account for 23.3%, indicating a closely linked, open economy that relies on global supply chains and inputs from abroad. The country runs a healthy external balance, with a current account surplus of 4.82% of GDP in 2024, signaling durable external strength, currency resilience, and net saving relative to investment. High-tech exports are a standout feature, totaling about $102.5 billion in 2024 and underscoring the country’s global leadership in electronics, machinery, and related technologies. Japan’s innovation ecosystem—as evidenced by strong R&D intensity and a large volume of patent activity—supports sophisticated production and competitive export performance.

Foreign direct investment remains a modest share of GDP (0.427% in 2024), suggesting that while Japan is open to investment, capital inflows are moderated by high domestic savings, corporate structures, and market dynamics. On the logistics front, Japan benefits from a high-quality trade and transport infrastructure environment, reflected in a Logistics Performance Index of 4.2 (2022) and a 4.2 rating, indicating efficient customs, cargo handling, and transport networks that facilitate exports and imports. Overall, Japan’s trade and investment profile blends a technologically advanced, innovation-driven economy with prudent macro management and exceptional connectivity to global markets.

Governance and Institutions

Japan possesses well-established institutions and governance indicators that align with its status as a high-income economy. Political stability and absence of violence/terrorism stand at 0.951 (2023), suggesting a stable political environment relative to many peers. Regulatory quality is high at 1.47, with rule of law at 1.54, indicating strong legal frameworks and predictable regulatory processes. Control of corruption is also favorable at 1.4, while government effectiveness is notably strong at 1.63, ranking in the upper tier globally. These measures collectively point to a governance environment that supports business, science, and public administration, with effective policy implementation and institutions that can adapt to changing economic and social needs.

Military expenditure in 2023 was about $50.16 billion, ranking 10th in the world, highlighting Japan’s security role and the broader policy context in which governance choices are made. The unemployment rate, though low at 2.6% in 2023, sits alongside aging demographics, which can influence labor policy, social protection, and long-term fiscal sustainability. Domestic public finance and governance structures, coupled with a robust rule-of-law environment, underpin investor confidence and the efficient functioning of markets in Japan.

Infrastructure and Technology

Japan’s infrastructure and technology profile is state-of-the-art, anchored by its ecosystem of research, innovation, and digital connectivity. Internet usage is high, with 87% of the population online in 2023, supporting digital services, e-commerce, and advanced manufacturing. The country leads in high-technology exports (over $102 billion in 2024) and maintains a very high level of R&D intensity (3.41% of GDP in 2022), alongside a prolific patent activity (residents’ patent applications around 222,452 in 2021). These indicators reflect a deeply embedded culture of innovation and the capacity to translate research into globally competitive products and processes.

Japan’s physical and logistical infrastructure ranks among the world’s best. The Logistics Performance Index stands at 4.2 (2022), indicating high-quality trade and transport-related infrastructure, efficient logistics services, and effective border procedures. The country’s energy profile shows renewable energy accounting for 8.8% of total final energy consumption (2021), signaling ongoing diversification of energy sources, though the data also imply continued reliance on traditional energy inputs given the relatively modest share of renewables. Per-capita health spending and public health infrastructure are strong, with domestic health expenditure per capita (PPP) around $4,634 in 2022, underscoring the integration of health and technology in public policy. In energy and climate terms, total greenhouse gas emissions per capita (excluding LULUCF) are about 8.36 t CO2e in 2023, reflecting a high-energy-use, advanced economy trajectory, while water resources stress remains manageable (freshwater withdrawal at 36% of available resources in 2021). Overall, Japan’s infrastructure and technology base supports its leadership in high-tech manufacturing, services, and digital transformation while navigating energy and environmental challenges through innovation and policy.

The combination of advanced infrastructure, strong governance, and deep innovation capacity helps explain Japan’s high productivity, global supply-chain role, and resilience in both traditional and emerging sectors, even as demographic and environmental transitions create new policy demands for investment, efficiency gains, and sustainable growth trajectories.

Environment and Sustainability

Japan faces a mixed environmental profile characteristic of a high-income, resource-constrained economy. Renewable energy consumption accounts for 8.8% of total final energy consumption as of 2021, indicating ongoing efforts to diversify away from fossil fuels, yet still leaving room for expansion in clean energy and energy security. Total greenhouse gas emissions per capita, excluding LULUCF, stand at 8.36 t CO2e in 2023, a level consistent with high energy use and heavy industry, while climate and energy policies aim to reduce emissions through efficiency, technological innovation, and gradual decarbonization. Water stress, measured as freshwater withdrawal relative to available resources, is 36% as of 2021, placing Japan in a moderate category that supports sustainable water management but calls for continued efficiency and conservation in agriculture, industry, and urban use.

On the social front, undernourishment remains low at 3.4% of the population in 2022, reflecting food security and nutrition improvements. The country’s health and social systems, including widespread internet access and high life expectancy, provide broad resilience to environmental and economic shocks. However, aging demographics intensify pressures on healthcare, housing, and public services, with sustainability planning increasingly anchored in R&D, innovation policy, and fiscal discipline. Japan’s environmental trajectory is thus characterized by progress in decarbonization and resource efficiency, tempered by the scale of its energy transition, the needs of an aging society, and the imperative to maintain competitive advantage through technological leadership and intelligent policy design.