Japan Economic Risk Analysis

Strong stimulus, slow return to normal


MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD5081.770bn (World ranking 3, World Bank 2019)
Population 126.3mn (World ranking 11, World Bank 2019)
Form of state Parliamentary government with a Constitutional Monarchy
Head of government Shinzo ABE (PM)
Next elections on or before 22 October 2021, House of Representatives
  • Robust external position (current account surplus, low public external debt etc.)
  • JPY considered safe-haven currency
  • Innovative industries and high-quality products
  • Large financial surplus of non-financial corporations
  • Developed country in a dynamic region
  • Vulnerable to natural disasters
  • Aging population
  • Huge public debt and large public deficit
  • Highly dependent on energy imports

Trade structure by destination/origin

(% of total)

Exports Rank Imports
United States 20%
26% China
China 18%
11% United States
Korea, Republic of 7%
5% Australia
Taiwan (PRC) 6%
4% Korea, Republic of
China, Hong Kong SAR 5%
4% Taiwan (PCR)

Trade structure by product

(% of total)

Exports Rank Imports
Road vehicles 22%
10% Petroleum, petroleum products and related materials
Electrical machinery, apparatus and appliances, n.e.s. 13%
9% Electrical machinery, apparatus and appliances, n.e.s.
Specialised machinery 7%
6% Telecommunication and sound recording apparatus
Other industrial machinery and parts 6%
6% Gas, natural and manufactured
Power generating machinery and equipment 4%
4% Articles of apparel & clothing accessories
The payment culture in Japan is excellent with only a minority of invoices remaining unpaid thanks to strong cultural particularities. However, excessive DSO and significant payment disparities may be observed from one sector to another.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

Although domestic courts tend to be fairly efficient in delivering timely decisions, tribunals are time-consuming, expensive and complex. Therefore, conducting well-orchestrated pre-legal collection actions is essential.

Similarly, collecting debt from insolvent debtors is overall a challenging exercise and, even though insolvency proceedings could yield dividends, these would spread over years and generate significant costs.

Contact Euler Hermes

Economic Research Team


Contact Françoise Huang

Senior Economist for Asia


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