Japan and the Net

Japan is an enchanting nation with interesting and exciting people. It is also a world-leading and dynamic center for business.

It is well-known that Japan has suffered through a recession for several years, but what may not be known is that a large, growing, and increasingly virtual marketplace is evolving. Many market watchers are painting a positive picture as the Net economy picks up prominence in Japan.

(This page is a work in progress. Be sure to visit this page frequently - we will continually be adding and updating our information.)

Introduction to Japan
State of the Japanese Economy
The Japanese Online Marketplace
State of the Japanese Domain Name Business
The Latest in Japanese Technology - What's Happening in the World's Leading Tech-Centric Nation?



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Introduction to Japan

Japan is a country only about the size of California, but it comprises the second largest economy in the world after the United States.

CAPITAL: Tokyo

POPULATION: 126.5m (2000)

POPULATION GROWTH: 0.2% (average, 1996-2000)

LAND AREA: 145,882.91 sq mi (377,719 sq km)

FISCAL YEAR: Starts April 1st

LITERACY: 99% (1970 est.)

LIFE EXPECTANCY: 77.51 male, 84.05 female (2000 est.)

CURRENCY: Yen (Y); Y122:US$1 (2001, average); Y132.8:US$1 (March 25th 2002)

GDP: Y534trn (2000, at constant 1995 prices); US$4.8trn (2000, at market exchange rates); US$3.4trn (2000, at PPP)

GDP GROWTH: 1.3% (average, 1996-2000); 2.2% (2000)

GDP PER HEAD: US$37,676 (2000, at market exchange rates); US$26,664 (2000, at PPP)

INFLATION: 0.3% (average, 1996-2000); -0.7% (2000, average)

LABOR FORCE (by occupation): trade and services 65%, industry 30%, agriculture, forestry, and fishing 5%

INDUSTRY: among world's largest and technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals; textiles, processed foods

POLITICAL STRUCTURE: Legislative and executive powers are vested in the Diet (parliament), which is composed of the House of Councillors (upper house) and the more powerful House of Representatives (lower house). The Liberal Democratic Party governs in coalition with New Komeito and the New Conservative Party.

Sources: Country ViewsWire, Economist.com, various Government Sources.

State of the Japanese Economy

Japan is the second largest economy in the world - generating more than double the business and commerce of the next largest economy. The sheer size of the business opportunity has made Japan a favorite market for investment from around the world.



Introduction
While retaining its time-honored culture, Japan rapidly absorbed Western technology during the late 19th and early 20th centuries, but it's industrial facilities were largely destroyed in the Second World War. Thereafter, a high ratio of investment to GDP and efficient industrial techniques resulted in strong real growth rates, particularly in the 1960s. These were helped by a high standard of education, good relations between labor and management, and government guidance for selected industries.
The Japanese economy boomed in the 1960's, 1970's, and 1980's. But in the last decade, the economy has slowed down rapidly as the heavy industry and electronics sectors that once drove the economy have given way in importance to the services and digital sectors.

Policy issues
Deregulation and liberalization are important policy issues, but the pace of change has been disappointingly slow. The rapid ageing of the population has implications for the structure of the future labor force, the savings rate and the government's budget. The banking system is heavily burdened by bad debt, mainly as a result of the bursting of the asset bubble at the beginning of the 1990s. (Government data show that in the period of 1990-97, which saw the steepest decline in asset values, cumulative losses from post-bubble asset deflation totaled Y1,117trn, or about US$9trn at the 1997 average exchange rate of Y121:US$1. Of this, Y729.6trn arose from losses on real estate.) The government's fiscal position is also deteriorating rapidly, largely owing to the implementation during the 1990s of successive fiscal stimulus packages with a combined headline value of more than Y100trn (about US$820bn at the 2001 average exchange rate of Y122:US$1) and to sluggish tax revenue growth.

Foreign trade
According to national data, Japan's merchandise trade surplus fell by 5.4% year over year to US$116.7bn in 2000, with exports of US$460bn and imports of US$343bn. The current account recorded a surplus of US$116.9bn for the year, a rise of 9.4% compared with the 1999 level.

Main exports (2000)	% of total	Main imports (2000)	% of total
Electrical machinery	25.5	equipment	31.6
Non-electrical machinery	20.7	Mineral fuels	20.3
Transport equipment	20.2	Food	12.1
Chemicals	7.1	Chemicals	7.0
Metals	5.3	Raw materials	6.5
Leading markets (2000)	% of total	Leading suppliers (2000)	% of total
US	29.7	US	19.0
Taiwan	7.5	China	14.5
China	6.4	South Korea	5.4
South Korea	6.3	Taiwan	4.7
Hong Kong	5.7	Indonesia	4.3

Sources: Economist.com, AskJeeves.com

The Japanese Online Marketplace

On the Online front, Japan is just beginning to emerge. Starting slowly, the Internet is quickly becoming critical to Japan's economy.

• Japan's online population is climbing 60% year over year, according to eMarketer
• There are over 21 million Internet users in Japan, according to Nielsen NetRatings. (Mar. 2000)
• PC Internet Penetration (Source: Gartner Group, 2000)
  • 1999 -18.0%
  • 2003 Forecast - 46.0%

Japan's e-commerce market is expected to expand roughly six fold to 6.14 trillion yen (U.S. $4.8bn) by 2006. The big winners will be business-to-consumer (growing 5.8 times from 940 billion yen in 2001 to 5.5 trillion yen), consumer-to-consumer (ballooning from 110 billion yen to 640 billion yen), and electronic learning (19 billion yen in 2001 to 100 billion yen). Due in part to ISP price wars, time spent online - and therefore money spent online - has grown and is expected to grow quickly in the years to come.

Nearly one-fourth of all households in Japan will have high-speed (128Kbps or greater) Internet connections by the end of 2002, according to the Ministry of Public Management, Home Affairs, and Posts and Telecommunications. The number of cable Internet users has already reached 1.2 million, outstripping the number of cable television subscribers, according to newspaper reports.

Telephones (main lines in use)
60.3 million (1997)
Telephones (mobile cellular)
36.5 million (1998)
Internet Service Providers (ISPs)
357 (1999)

Sources: Nomura Research Institute, eMarketer, Neilsen NetRatings, Gartner Group, Various Government Sources

It is well known that English is the common language of the Internet, and most sites as well as user activity is conducted in English. But due to the relatively large size of the Japanese population, and its high degree of Net activity, Japanese is the second most important online language.


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State of the Japanese Domain Name Business

As the Japanese online economy develops and grows, the domain name business is becoming one of its chief beneficiaries.

.jp domain names are increasingly being looked to as the facilitator of online business development in Japan, and as a result, registrations have skyrocketed.

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The Latest in Japanese Technology - What's Happening in the World's Leading Tech-Centric Nation?

Please stay tuned for coverage of this exciting topic.