ABSTRACT From 1953 to 1992, Japan reached the highest economic growth rates among industrialized countries. This performance was achieved despite two oil shocks and the endaka - the continuous rise of the yen vis-à-vis the dollar. This long-term growth cycle came to a sudden halt in early 90’s. Japanese economy stagnated while other industrialized countries continued growing. This was mainly due to the “economic bubkle” burst. From 1990 to 1992, the value of urban land and of the stock market index were cut to almost half. As a result, Japanese banks accumulated US$ 800 billion performing assets. This paper intends to analyse the Japanese “bubble economy crisis” and its long-term impacts on the Japanese economy, on its financial system and on its bilateral relations with the United States.

Key information about Japan M2 Growth

• Japan Money Supply M2 increased 1.1 % YoY in Feb 2025, compared with a growth of 1.3 % in the previous month
• Japan Money Supply M2 growth data is updated monthly, available from Jan 1968 to Feb 2025
• The data reached an all-time high of 28.5 % in Nov 1972 and a record low of -0.6 % in Oct 1992

CEIC calculates M2 Growth Rate from monthly M2. The Bank of Japan provides M2 in local currency. Average M2 is used. M2 Growth Rate prior to April 2004 includes Certificates of Deposits and prior to April 1999 excludes Foreign Banks.


Further information about Japan M2 Growth

• In the latest reports, Japan Foreign Exchange Reserves was measured at 1,108.4 USD bn in Feb 2025
• The Foreign Exchange Reserves equaled 16.2 Months of Import in Jan 2025
• Japan Domestic Credit reached 11,754.7 USD bn in Dec 2024, representing an increased of 1.3 % YoY
• The country's Non Performing Loans Ratio stood at 1.2 % in Sep 2024, compared with the ratio of 1.3 % in the previous half a year
• Household Debt of Japan reached 2,739.5 USD bn in Sep 2024, accounting for 65.1 % of the country's Nominal GDP

Japan JP: GDP: Deflator: Gross Capital Formation data was reported at 1.062 Index, 2011 in 2022. This records an increase from the previous number of 1.058 Index, 2011 for 2021. Japan JP: GDP: Deflator: Gross Capital Formation data is updated yearly, averaging 1.035 Index, 2011 from Dec 1960 (Median) to 2022, with 63 observations. The data reached an all-time high of 1.168 Index, 2011 in 1992 and a record low of 0.432 Index, 2011 in 1960. Japan JP: GDP: Deflator: Gross Capital Formation data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Japan – Table JP.OECD.EO: GDP: Deflator: Forecast: OECD Member: Annual. PITISK - Gross capital formation, deflatorIndex, national reference year

In 2024, Japan had an average inflation rate of 2.74 percent. Japan's inflation rate had hit a record high in 2023 at 3.27 percent, marking the highest rate of inflation in Japan in recent times. However, this figure was still very low compared to most other major economies, such as Japan's fellow G7 members, four of which had inflation rates around six or seven percent in 2023 due to the global inflation crisis. Why is Japan's inflation rate lower? There are a number of contributing factors to Japan's relatively low inflation rate, even during economic crises. Japan eased its Covid restrictions more slowly than most other major economies, this prevented post-pandemic consumer spending that may have driven inflation through supply chain issues caused by higher demand. As the majority of Japan's food and energy comes from overseas, and has done so for decades, the government has mechanisms in place to prevent energy and wheat prices from rising too quickly. Because of this, Japan was able to shield its private sector from many of the negative knock on effects from Russia's invasion of Ukraine, which had a significant impact on both sectors globally. Persistent deflation and national debt An additional factor that has eased the impact of inflation on Japan's economy is the fact that it experienced deflation before the pandemic. Deflation has been a persistent problem in Japan since the asset price bubble burst in 1992, and has been symptomatic of Japan's staggering national debt thereafter. For almost 30 years, a combination of quantitative easing, low interest rates (below 0.5 percent since 1995, and at -0.1% since 2016), and a lack of spending due to low wages and an aging population have combined to give Japan the highest national debt in the world in absolute terms, and second-highest debt in relation to its GDP, after Venezuela. Despite this soaring debt, Japan remains the fourth-largest economy in the world, behind the U.S., China, and Germany.

Graph and download economic data for Value of Exports to Japan from District of Columbia (DCJPNA052SCEN) from 1992 to 2022 about DC, Japan, and exports.

Graph and download economic data for Value of Exports to Japan from Maryland (MDJPNA052SCEN) from 1992 to 2022 about MD, Japan, and exports.

Japan JP: Net Acquisition of Financial Assets: % of GDP data was reported at -0.035 % in 2017. This records an increase from the previous number of -1.431 % for 2016. Japan JP: Net Acquisition of Financial Assets: % of GDP data is updated yearly, averaging 0.281 % from Mar 1992 (Median) to 2017, with 26 observations. The data reached an all-time high of 6.535 % in 2004 and a record low of -3.202 % in 1999. Japan JP: Net Acquisition of Financial Assets: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Japan – Table JP.World Bank: Government Revenue, Expenditure and Finance. Net acquisition of government financial assets includes domestic and foreign financial claims, SDRs, and gold bullion held by monetary authorities as a reserve asset. The net acquisition of financial assets should be offset by the net incurrence of liabilities.; ; International Monetary Fund, Government Finance Statistics Yearbook and data files.; Weighted average;

Japan: Taxes on goods and services, percent of total revenue: The latest value from 1993 is 14.45 percent, an increase from 13.94 percent in 1992. In comparison, the world average is 26.86 percent, based on data from 77 countries. Historically, the average for Japan from 1991 to 1993 is 13.87 percent. The minimum value, 13.21 percent, was reached in 1991 while the maximum of 14.45 percent was recorded in 1993.

Japan JP: Revenue Excluding Grants: % of GDP data was reported at 12.237 % in 2017. This records a decrease from the previous number of 12.611 % for 2016. Japan JP: Revenue Excluding Grants: % of GDP data is updated yearly, averaging 11.504 % from Mar 1973 (Median) to 2017, with 45 observations. The data reached an all-time high of 21.576 % in 1992 and a record low of 9.430 % in 1976. Japan JP: Revenue Excluding Grants: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Japan – Table JP.World Bank: Government Revenue, Expenditure and Finance. Revenue is cash receipts from taxes, social contributions, and other revenues such as fines, fees, rent, and income from property or sales. Grants are also considered as revenue but are excluded here.; ; International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates.; Weighted Average;

Japan JP: Central Government Debt: Total: % of GDP data was reported at 195.520 % in 2017. This records a decrease from the previous number of 197.037 % for 2016. Japan JP: Central Government Debt: Total: % of GDP data is updated yearly, averaging 124.032 % from Mar 1991 (Median) to 2017, with 27 observations. The data reached an all-time high of 197.037 % in 2016 and a record low of 38.854 % in 1992. Japan JP: Central Government Debt: Total: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Japan – Table JP.World Bank.WDI: Government Revenue, Expenditure and Finance. Debt is the entire stock of direct government fixed-term contractual obligations to others outstanding on a particular date. It includes domestic and foreign liabilities such as currency and money deposits, securities other than shares, and loans. It is the gross amount of government liabilities reduced by the amount of equity and financial derivatives held by the government. Because debt is a stock rather than a flow, it is measured as of a given date, usually the last day of the fiscal year.; ; International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates.; Weighted average;

Japan JP: General Government: % of Potential GDP: Cyclically Adjusted Current Disbursements data was reported at 38.793 Ratio in 2026. This records a decrease from the previous number of 38.843 Ratio for 2025. Japan JP: General Government: % of Potential GDP: Cyclically Adjusted Current Disbursements data is updated yearly, averaging 32.924 Ratio from Dec 1985 (Median) to 2026, with 42 observations. The data reached an all-time high of 41.640 Ratio in 2020 and a record low of 26.473 Ratio in 1992. Japan JP: General Government: % of Potential GDP: Cyclically Adjusted Current Disbursements data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Japan – Table JP.OECD.EO: Government Accounts: % of Potential GDP: General Government: Forecast: OECD Member: Annual. YPGQA - Cyclically-adjusted general government current disbursements, as a percentage of potential GDP

Key information about Japan Gross Savings Rate

• Japan Gross Savings Rate was measured at 30.1% in Mar 2024, compared with 30.1% in the previous quarter.
• Japan Gross Savings Rate is updated quarterly, with data available from Mar 1980 to Mar 2024, and an average rate of 30.1%.
• The data reached an all-time high of 30.1% in Mar 1992 and a record low of 22.9% in Mar 2014.
• CEIC calculates quarterly Gross National Savings Rate from quarterly Gross Savings and quarterly Gross National Income. Economic and Social Research Institute provides Gross Savings in local currency and Gross National Income in local currency, based on SNA 2008 with benchmark year 2015. Gross National Savings Rate prior to Q1 1994 is based on SNA 1993 with benchmark year 2000.
• In the latest reports, Japan GDP expanded 1.1% YoY in Sep 2025.
• Japan Nominal GDP reached 1,077,560.8 USD mn in Sep 2025. Its GDP deflator (implicit price deflator) increased 2.8% in Sep 2025.
• Japan GDP Per Capita reached 32,434.4 USD in Dec 2024.

Japan JP: Revenue and Grants: Revenue: Tax Revenue: % of GDP data was reported at 11.103 % in 2017. This records a decrease from the previous number of 11.409 % for 2016. Japan JP: Revenue and Grants: Revenue: Tax Revenue: % of GDP data is updated yearly, averaging 10.530 % from Mar 1973 (Median) to 2017, with 45 observations. The data reached an all-time high of 13.133 % in 1992 and a record low of 8.369 % in 2010. Japan JP: Revenue and Grants: Revenue: Tax Revenue: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Japan – Table JP.World Bank: Government Revenue, Expenditure and Finance. Tax revenue refers to compulsory transfers to the central government for public purposes. Certain compulsory transfers such as fines, penalties, and most social security contributions are excluded. Refunds and corrections of erroneously collected tax revenue are treated as negative revenue.; ; International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates.; Weighted Average;

Japan JP: Gain of Natural And Semi Natural Vegetated Land: Since 1992 data was reported at 1.840 % in 2019. This records an increase from the previous number of 1.290 % for 2004. Japan JP: Gain of Natural And Semi Natural Vegetated Land: Since 1992 data is updated yearly, averaging 1.565 % from Dec 2004 (Median) to 2019, with 2 observations. The data reached an all-time high of 1.840 % in 2019 and a record low of 1.290 % in 2004. Japan JP: Gain of Natural And Semi Natural Vegetated Land: Since 1992 data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Japan – Table JP.OECD.GGI: Environmental: Land Resources: OECD Member: Annual.

Key information about Japan Retail Sales Growth

• Japan Retail Sales grew 1.8 % YoY in Oct 2025, compared with a 0.2 % increase in the previous month.
• Japan Retail Sales Growth YoY data is updated monthly, available from Oct 1992 to Oct 2025, with an average growth rate of -2.5 %.
• The data reached an all-time high of 12.1 % in Mar 1997 and a record low of -14.0 % in Mar 1998.
• In the latest reports, Car Sales of Japan recorded 395,189.0 units in Oct 2025, representing a drop of 1.8 %.

CEIC calculates monthly Retail Sales: Incl. Motor Vehicles Growth from monthly Retail Trade Index. The Ministry of Economy, Trade and Industry provides Retail Trade Index with base 2020=100. Retail Sales: Incl. Motor Vehicles Growth prior to January 2003 is calculated from Retail Trade Index with base 2005=100, and prior to January 2001 is calculated from Retail Trade Index with base 1995=100.

Japan Labor Hours data was reported at -0.246 % in Sep 2018. This records an increase from the previous number of -0.250 % for Mar 2018. Japan Labor Hours data is updated semiannually, averaging -0.286 % from Sep 1983 (Median) to Sep 2018, with 71 observations. The data reached an all-time high of 0.013 % in Mar 1984 and a record low of -0.983 % in Sep 1992. Japan Labor Hours data remains active status in CEIC and is reported by Bank of Japan. The data is categorized under Global Database’s Japan – Table JP.A053: SNA 2008: Potential Growth Rate and Output Gap.

Graph and download economic data for Value of Exports to Japan from Maine (MEJPNA052SCEN) from 1992 to 2022 about ME, Japan, and exports.

JP: Loss of Natural And Semi Natural Vegetated Land: Since 1992 data was reported at 4.740 % in 2019. This records an increase from the previous number of 3.670 % for 2004. JP: Loss of Natural And Semi Natural Vegetated Land: Since 1992 data is updated yearly, averaging 4.205 % from Dec 2004 (Median) to 2019, with 2 observations. The data reached an all-time high of 4.740 % in 2019 and a record low of 3.670 % in 2004. JP: Loss of Natural And Semi Natural Vegetated Land: Since 1992 data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Japan – Table JP.OECD.GGI: Environmental: Land Resources: OECD Member: Annual.

Japan (DC)GDP Deflator: GFCF: Computer Software data was reported at 94.000 2000=100 in Jun 2011. This records an increase from the previous number of 93.800 2000=100 for Mar 2011. Japan (DC)GDP Deflator: GFCF: Computer Software data is updated quarterly, averaging 94.150 2000=100 from Mar 1980 (Median) to Jun 2011, with 126 observations. The data reached an all-time high of 104.800 2000=100 in Jun 1992 and a record low of 66.700 2000=100 in Mar 1980. Japan (DC)GDP Deflator: GFCF: Computer Software data remains active status in CEIC and is reported by Economic and Social Research Institute. The data is categorized under Global Database’s Japan – Table JP.A106: SNA 93: Benchmark Year=2000: GDP: Deflator: 2000 Price: Chain Linked.

Japan JP: Artificial Surfaces: % of Total Surface data was reported at 6.650 % in 2019. This records an increase from the previous number of 6.630 % for 2018. Japan JP: Artificial Surfaces: % of Total Surface data is updated yearly, averaging 6.590 % from Dec 1992 (Median) to 2019, with 5 observations. The data reached an all-time high of 6.650 % in 2019 and a record low of 3.310 % in 1992. Japan JP: Artificial Surfaces: % of Total Surface data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Japan – Table JP.OECD.GGI: Environmental: Land Resources: OECD Member: Annual.