Japan

Japan’s current economic situation presents a mixed outlook. Nominal GDP grew by 3.1% in 2024, yet real GDP expansion remained modest at around 0.2%. Forecasts for 2025 point to only a slight improvement, with real growth expected to remain below 1%. The government has approved a record budget for 2025, reflecting rising obligations in social insurance and debt servicing, and plans to finance it through a combination of tax revenue and continued bond issuance. For exporters, Japan’s growing interest in inbound foreign investment offers opportunities for partnerships and technology collaboration. However, the country’s slow real-growth environment and structural fiscal pressures underline the need for careful market assessment and strong local engagement to succeed.

Swiss exporters should note that Japan's trade environment is heavily influenced by its extensive network of free trade agreements, covering 79% of its trade, with ongoing negotiations potentially increasing this coverage. Additionally, Japan's imports have significantly increased in sectors such as electronic components and chemicals, indicating strong demand in these areas. Switzerland ranks as the 22nd largest exporter to Japan, suggesting opportunities for growth in these high-demand sectors.

Swiss companies have significant opportunities in Japan, particularly in the clean technology, biotechnology, pharmaceuticals, and medical technology sectors, as identified by the Swiss Business Hub Japan. Additionally, the manufacturing sector, especially chemicals and electronic components, has shown strong growth, suggesting further export potential. Collaborations with Japanese industry partners can be facilitated by the Science and Technology Office and Swissnex in Japan.

Swiss exporters should focus on the manufacturing sector, particularly chemicals, electronic components, and transport equipment, as these areas have shown significant growth, with chemicals and electronic components gaining over 20%. Additionally, the financial and insurance services sector presents opportunities due to its consistent growth and record values. Clean technology, biotechnology, pharmaceuticals, and medical technology are also promising sectors, especially in the Japanese market, as identified by the Swiss Business Hub Japan.

Swiss exporters face challenges such as fluctuating global trade policies and tariffs, which can impact competitiveness and market access. For example, Japan's experience with US tariffs on car imports highlights the risk of sudden policy changes affecting major export categories. Swiss exporters should closely monitor international trade agreements and diversify markets to mitigate such risks.