About Japan

In 2002-07, growth improved and the lingering fears of deflation in prices and economic activity lessened, leading the central bank to raise interest rates to 0.25% in July 2006, up from the near 0% rate of the six years prior, and to 0.50% in February 2007. Japan's huge government debt, which totals 182% of GDP, and the aging of the population are two major long-run problems. Some fear that a rise in taxes could endanger the current economic recovery. Debate also continues on the role of and effects of reform in restructuring the economy, particularly with respect to increasing income disparities and the 2007-17 privatization of Japan Post, which has functioned not only as the national postal delivery system but also, through its banking and insurance facilities, as Japan's largest financial institution.

* GDP (purchasing power parity): $4.305 trillion (2007 est.)

* GDP - real growth rate: 2% (2007 est.)

* GDP - per capita (PPP): $33,800 (2007 est.)

* GDP - composition by sector: agriculture: 1.5%

industry: 25.2%

services: 73.3% (2007 est.)

* Labor force: 66.07 million (2007 est.)

* Internet users: 87.54 million (2006)

* Government type: constitutional monarchy with a parliamentary government

* Inflation rate (consumer prices): 0% (2007 est.)

* Unemployment rate: 3.8% (2007 est.)

* Population: 127,433,494 (July 2007 est.)

* Age structure: 0-14 years: 13.8% (male 9,024,344/female 8,553,700)

15-64 years: 65.2% (male 41,841,760/female 41,253,968)

65 years and over: 21% (male 11,312,492/female 15,447,230) (2007 est.)

* Literacy: definition: age 15 and over can read and write

total population: 99%

male: 99%

female: 99% (2002)

Internet facts(2003)

* There are 32,244,000 broadband households which is 36.2%.

* There are 70,072,000 Internet users.

* 72.5% of people have heard of blogs, up from 39% last year.

* 25% of women in their teens and 20's have blogs.

* 9.5% of Internet users use RSS Readers.

* 46.5% of Internet users have decreased spending in physical shops because of online shopping.

* 29.6% of offices have wifi up from 10.7% last year.

* 2.8% of companies have corporate blogs and over 50% express no intention of ever having corporate blogs.

* 5.5% of companies have corporate web pages for mobile phone users.

Economic Relations

U.S. economic policy toward Japan is aimed at increasing access to Japan's markets and two-way investment, stimulating domestic demand-led economic growth, promoting economic restructuring, improving the climate for U.S. investors, and raising the standard of living in both the United States and Japan. The U.S.-Japan bilateral economic relationship--based on enormous flows of trade, investment, and finance--is strong, mature, and increasingly interdependent. Further, it is firmly rooted in the shared interest and responsibility of the United States and Japan to promote global growth, open markets, and a vital world trading system. In addition to bilateral economic ties, the U.S. and Japan cooperate closely in multilateral fora such as the WTO, Organization for Economic Cooperation and Development, the World Bank, and the International Monetary Fund, and regionally in the Asia-Pacific Economic Cooperation forum (APEC).

FOREIGN RELATIONS

Japan is the world's second-largest economy and a major economic power both in Asia and globally. Japan has diplomatic relations with nearly all independent nations and has been an active member of the United Nations since 1956.

GOVERNMENT AND POLITICAL CONDITIONS

Japan is a constitutional monarchy with a parliamentary government.

They have an anti monopoly act -jftc

Japanese business income taxes include the following:

every Japanese company, irrespective of domestic or foreign ownership, is treated as a Japanese resident and is liable to pay corporate taxes (~42% including national and local income taxes and 'inhabitants' tax) in Japan on its total income whether earned in Japan or overseas (so if your Japanese subsidiary also sells in South Korea, Taiwan etc. it will pay taxes in Japan on those revenues),

all royalties (but not payments for physical products) paid by a Japanese customer to a non-resident foreign company (including royalties paid by a Japanese company to its foreign parent or foreign affiliate) will incur a 20% withholding tax which must be deducted by the Japanese customer from the value of the invoice (for software, media, patent or license rights etc.) issued by the non-resident company and the tax paid by the customer directly to the Japanese national tax office (this withholding tax on royalties will be deleted for US parents in the new US-Japan tax treaty),

all dividends paid by a kabushiki kaisha from its post-tax profits to non-resident foreign stockholders will incur a 20% withholding tax which must be deducted by the kabushiki kaisha and paid direct to the Japanese national tax office (this withholding tax will be deleted for US parents in the new US-Japan