Japan (日本 Nihon or Nippon, officially 日本国 Nippon-koku or Nihon-koku) is an island country in East Asia. Located in the Pacific Ocean, it lies to the east of China, Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea in the south. The characters that make up Japan's name mean "sun-origin", which is why Japan is sometimes identified as the "Land of the Rising Sun".
Japan comprises over 3,000 islands making it an archipelago. The largest islands are Honshū, Hokkaidō, Kyūshū and Shikoku, together accounting for 97% of Japan's land area. Most of the islands are mountainous, many volcanic; for example, Japan’s highest peak, Mount Fuji, is a volcano. Japan has the world's tenth largest population, with about 128 million people. The Greater Tokyo Area, which includes the de facto capital city of Tokyo and several surrounding prefectures, is the largest metropolitan area in the world, with over 30 million residents.
Archaeological research indicates that people were living on the islands of Japan as early as the Upper Paleolithic period. The first written mention of Japan begins with brief appearances in Chinese history texts from the first century AD.
Influence from the outside world followed by long periods of isolation has characterized Japan's history. Since adopting its constitution in 1947, Japan has maintained a unitary constitutional monarchy with an emperor and an elected parliament, the Diet.
A major economic power, Japan has the world's second largest economy by nominal GDP. It is a member of the United Nations, G8, G4, OECD and APEC, with the world's fifth largest defense budget. It is also the world's fourth largest exporter and sixth largest importer and a world leader in technology and machinery.
Japan is the second largest economy in the world, after the United States, at around US$4.5 trillion in terms of nominal GDP and third after the United States and China in terms of purchasing power parity. GDP per hour worked is the world's 18th highest as of 2006.
Banking, insurance, real estate, retailing, transportation and telecommunications are all major industries. Japan has a large industrial capacity and is home to some of the largest, leading and most technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles and processed foods. Construction has long been one of Japan's largest industries, with the help of multi-billion dollar government contracts in the civil sector. Japan has high economic freedom, close government-industry cooperation for economic growth, emphasis on science and technology, and strong work ethic. Distinguishing characteristics of the Japanese economy have included the cooperation of manufacturers, suppliers, distributors and banks in closely-knit groups called keiretsu and relatively shallow international competition in domestic markets. There are many relationship-based - rather than productive - arrangements such as the guarantee of lifetime employment in big corporations. Recently, Japanese policy makers have encouraged reform and Japanese companies have begun to abandon some of these norms in an attempt to increase profitability. Japan is a low-tax overwhelmingly private enterprise economy. Overall tax burden is smaller than in any major Western country; it was 26.4% of GDP as of 2007. Only a minority of Japanese employees pay any income tax, value-added tax is very low at 5%, while corporate tax rates are high.
Some of the largest companies in Japan include Toyota Motor, NTT DoCoMo, Canon, Honda, Takeda Pharmaceutical, Sony, Nippon Steel, Tepco, Mitsubishi Estate, and Seven & I Holding. It is home to the world's largest bank by assets, Japan Post Bank (US$3.2 trillion) and others such as Mitsubishi UFJ Financial Group (US$1.2 trillion), Mizuho Financial Group (US$1.4 trillion) and Sumitomo Mitsui Financial Group (US$1.3 trillion). The Tokyo Stock Exchange with a market capitalization of over 549.7 trillion Yen as of December 2006 stands as the second largest in the world.
From the 1960s to the 1980s, overall real economic growth has been called a "Japanese miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s. Growth slowed markedly in the 1990s, largely because of the after-effects of over-investment during the late 1980s and domestic policies intended to wring speculative excesses from the stock and real estate markets. Government efforts to revive economic growth met with little success and were further hampered in 2000 to 2001 by the deceleration of the global economy. However, the economy showed strong signs of recovery after 2005. GDP growth for that year was 2.8%, with an annualized fourth quarter expansion of 5.5%, surpassing the growth rates of the US and European Union during the same period.
Because only about 15% of Japan's land is suitable for cultivation, a system of terrace farming is used to build in small areas. This results in one of the world's highest levels of crop yields per unit area, while the agricultural subsidies and protection are expensive. Japan imports about 50% of its requirements of grain and fodder crops other than rice, and it relies on imports for most of its supply of meat. In fishing, Japan is ranked second in the world behind China in tonnage of fish caught. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. Japan relies on foreign countries for almost all oil and food.
Most energy in Japan is produced from oil, natural gas and coal. Nuclear power in Japan makes a third of electricity production and Japan would like to double it in coming decades.