The SCCIJ is pleased to present a concise report offering an updated analysis of Japan’s macroeconomic developments, foreign trade, investment flows, and priority growth sectors. This overview highlights both the opportunities and structural challenges that Swiss businesses may encounter when operating in or entering the Japanese market. It also underscores the continued strength and strategic depth of economic ties between Switzerland and Japan. The insights are based on the Economic Report Japan 2025, prepared by the Embassy of Switzerland in Japan.
Summary
In 2024, Japan’s real GDP grew by only 0.1%, slowing significantly from +1.8% in 2023. Inflation stood at 2.5%, still outpacing wage growth. After years of strong depreciation, the yen stabilized. The Bank of Japan (BOJ) ended its negative interest rate policy, raising rates gradually to +0.5% by early 2025. The government maintained an expansive fiscal policy, focusing on defense, inflation support, and critical technologies. Public debt remained high at 237% of GDP (down from 257% in 2023).
Bilateral trade between Switzerland and Japan reached CHF 15.3 billion in 2024 (+4.8% vs 2023). Swiss exports rose by 6.4%, driven by pharmaceuticals, chemicals (+7.3%), and watchmaking (+7.8%). Imports from Japan increased by 3%, hitting a record high, especially in chemical and pharmaceutical products. Switzerland became Japan’s 7th largest investor, and Japan remains Switzerland’s 9th most important investment destination, highlighting a deepening bilateral economic relationship.
Macroeconomic Context
| Indicator | 2023 | 2024 |
|---|---|---|
| Real GDP growth | +1.8% | +0.1% |
| Inflation | 3.1% | 2.5% |
| Unemployment | 2.6% | 2.6% |
| Public debt (% of GDP) | 257% | 237% |
| Yen/CHF | -22% | Stabilized (166-180) |
| BOJ interest rate | Negative | +0.5% |
| Nominal wage increase | +4.1% | +4.1% |
| Real wage growth | Negative | -0.3% |
Fiscal and Monetary Policy
- Two major fiscal packages in 2024 (regular + supplementary), including tax rebates and subsidies to counter inflation and new US tariffs.
- Public debt reached USD 8.7 trillion, with a primary surplus now forecasted for 2026 instead of 2025.
- Strong investments in economic security and tech resilience, including support for semiconductors and critical materials.
- Security clearance system launched for private companies in sensitive tech sectors (starting 2025).
Trade and Investment
| Indicator | 2023 | 2024 |
|---|---|---|
| Bilateral trade volume | CHF 14.6 billion | CHF 15.3 billion (+4.8%) |
| Swiss exports to Japan | CHF 7.68 billion | CHF 8.2 billion (+6.4%) |
| Imports from Japan | CHF 6.89 billion | CHF 7.1 billion (+3%) |
| Top Swiss exports | Pharma, chemicals, watches | Same sectors (+7.3% pharma, +7.8% watches) |
| Top imports from Japan | Chemicals, vehicles | Chemicals up (+26.8%), vehicles down (–20.7%) |
| Swiss trade surplus | CHF +793 million | CHF +1.07 billion |
| Swiss investment in Japan | USD 14 bn est. | USD 19.3 bn (+37%) |
| Japan’s investment in Switzerland | USD 38 bn est. | USD 41.6 bn (+9.2%) |
Opportunities for Swiss Companies
- Key growth sectors in 2024: cleantech, biotech, medtech, semiconductors, and finance.
- Significant growth in:
- Finance and insurance (+25%)
- Human health and social work
- Electronic components and devices
- Strategic opportunities:
- Expo 2025 Osaka – the Swiss Pavilion (“From Heidi to Hi-Tech”) will showcase innovation in quantum, robotics, sustainability, and life sciences.
- Rapidus project – aiming to produce 2nm chips by 2027, backed by a USD 66.3 billion public-private investment plan.
- Space Strategy Fund – USD 6.6 billion for space tech development, 23% of which already went to start-ups – opening doors for Swiss collaboration.
Regulation and Economic Security
- Expanded export controls on advanced technologies like semiconductors, quantum computing, and critical software.
- Mandatory registration of software and devices used in infrastructure sectors.
- Government subsidies for domestic production of critical goods (e.g., batteries, chips).
- Revised FDI screening rules and new incentives to attract foreign direct investment in strategic sectors and local regions.
Source: Economic Report 2025 – Japan
