KEY TAKEAWAYS

• Is this the decline of Japan?

• Should we transfer our money out of Japan?

• Are taxes way to high in Japan?

• Are Japanese nationals moving out of Japan in 2026?

• Is the Japanese economy good only for International talent?

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THE DOWN-FALL OF THE YEN?

Michael Machida Career Search Consultant TheJEGroup! Tokyo, Japan

I’ve lived in Japan long enough to watch seasons change in more ways than just weather. There’s this quiet, almost whisper-like shift that people here talk about—sometimes over coffee, sometimes not at all.

You start to notice how often the word “kareshi” (boyfriend) or “kekkon” (marriage) gets dodged in conversation, how shops you’ve known for years close, and how the price on that same coffee you buy once a week somehow costs more even though wages barely budge.

These are the little signals that market data and national stats eventually reflect.

If you look at the big charts, Japan’s economic story from 2000 to 2026 isn’t about a sudden crash. It’s more like a long plateau, then a slow drift that eventually starts to slope downward.

Japan vs the U.S.: GDP and Growth

In the early 2000s, Japan still had one of the largest economies in the world. Around 2000, Japan’s nominal GDP was roughly $4.97 trillion.

Over the next decade, it bumped up and down with global ups and downs—financial shocks, the 2008 crisis, the 2011 earthquake—but generally stayed in the $4–$6 trillion range for years. By 2023–2024, Japan’s GDP in dollar terms was around $4.2 trillion, reflecting weaker export demand and also the effect of the weak yen.

Meanwhile, the U.S. economy has grown more aggressively—from around $10 trillion in 2000 to roughly $27–$30 trillion in the mid-2020s.

That stark contrast isn’t because Japan’s economy is worthless—it’s real output is still enormous—but because the U.S. expanded faster due to population growth and stronger productivity trends.

It struck me personally when I first compared a chart of Japan’s nominal GDP over time with an American one: while Japan’s curve was almost flat through chunks of the 2000s and 2010s, the U.S. curve kept climbing steadily.

That’s the kind of thing economists talk about in graphs—but for a person living here it’s a story you feel every time prices tighten and wages stay the same.

The Yen’s Roller Coaster and Exchange Rates. The yen’s history reflects another part of this picture.

In the 2010s and early 2020s, the yen struggled. Around 2016–2020, it hovered around ¥95–¥105 to the U.S. dollar. By the early 2020s it weakened further. In 2024 and 2025, yen rates averaged in the ¥68–¥75 range per dollar, a significant decline compared to older decades.

That change makes imports more expensive in yen terms and affects how Japan’s GDP looks when compared in U.S. dollars.

I remember people in Tokyo talking about the yen losing its “magic.” Not dramatic panic, just a resigned acceptance—especially among older business owners who remember a time when a strong yen felt like national pride.

Population Shifts and Demographics

Here’s where things get very real beyond the economic headlines.

Japan’s population peaked around 2009 and has been shrinking since. The number of births has fallen every year for over a decade, and 2024 saw record-low births—around 720,000, the lowest in 125 years—while deaths topped 1.6 million, causing a net drop of nearly 900,000 people in a single year.

That’s not just data on a page—that’s your neighbor’s kid moving overseas for work because there just aren’t enough jobs that pay well here, or middle-aged friends thinking seriously about settling abroad so they can afford childcare and housing.

Today about 30 % of Japan’s population is over 65. That’s a huge share for any nation and puts strain on everything from public pensions to healthcare systems.

Are International Talent Moving To Japan In 2026?

At the same time, the number of international residents in Japan has quietly ticked up. Figures from 2023 show the resident foreign population exceeded 3 million for the first time, making up nearly 3 % of residents, and rising each year.

For local employers and policymakers, this shift—slow as it is—matters. There are projections that Japan could face a shortage of nearly one million international workers by 2040 if it wants to keep its target growth rates, especially given labor shortages in healthcare, services, and construction sectors.

What It Feels Like

Walking through Osaka’s business districts on a weekday afternoon, I once chatted with a manager at a small import business. He was telling me how a shipment that used to cost ¥100 million now feels like it eats up more of the budget because the yen isn’t strong.

“We’re selling the same stuff,” he said, “but it feels like we’re running on a treadmill.”

On another occasion in Kyoto, I met a young teacher who said straight-up that many of her friends were considering English-speaking countries for work—not because they didn’t love Japan, but because they were trying to get ahead in ways that felt harder here.

There’s a kind of honesty in those everyday conversations that doesn’t show up in raw GDP figures. It’s not a melodrama of collapse; it’s a persistent, slow tension between tradition and adaptation.

Key Data Comparison: Japan 2000–2026

(All figures approximate and simplified for readability; sources cited above.)

• Indicator 2000 2010 2020 2024 2026

• Nominal GDP (US$) ~$4.97T ~$5.76T ~$5.05T ~$4.2T ~$4.0T (est)

• GDP per capita (US$) ~$37,500~$45,000~$40,000~$33,000~$32,000

• Population (million) ~126.8 ~128.1 ~125.1 ~123.8 ~122–123

• Population Growth Slight growth Stable Slight decline Decline Decline

• % Age 65+ ~17% ~22% ~29–30% ~30% ~30%

• Yen to USD ~100–110* ~90–100* ~100–105* ~70–75* ~70–75*

• International Residents (approx) <1M ~1M ~3M ~3.6M ~3.7M+

*Exchange rate ranges vary year by year; these are rough ballpark averages.

Summing It Up...

So is Japan’s economy “tanking”? From the outside looking in, the story is more nuanced:

Yes, Japan’s relative global ranking in GDP has slipped—now around 4th place rather than 2nd or 3rd. Yes, the yen has weakened significantly, which affects dollar-based comparisons.

Yes, population decline and aging are structural challenges.

And yes, there’s an increasing reliance on international talent to keep sectors running.

But there’s also resilience—the services sector still employs millions, Japan remains a technological leader in many industries, and daily life continues with all its ordinary joys and frustrations.

For many people here, it’s not a crisis movie—it’s a slow, messy, very human process of adaptation.

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