Japan's Per-Capita GDP Could Fall Behind Korea's

  • By Sung Ho-chul

    July 25, 2022 13:10

    Japan's per-capita GDP could fall behind Korea's if the tumbling yen falls to 140 to the U.S. dollar, according to a leading Japanese economist. The yen's purchasing power against the greenback already stands at a level last seen 50 years ago.

    Yukio Noguchi, an emeritus professor at Hitotsubashi University, said in the business magazine Toyo Keizai said, "Even at the start of this year, a dollar was worth around 115 yen but weakened to 139 yen on July 14. The yen's relative depreciation was serious compared to other currencies."

    According to Noguchi's analysis, Korea's per-capita GDP stands at $31,902 if the exchange rate is W1,316.35 to the dollar, while Japan's per-capita GDP stands at $32,010 if the exchange rate is 139 yen.

    "In 2012, right before Abenomics started, Japan's per-capita GDP was about twice the size of Korea's," he recalled.

    Noguchi added that the real effective exchange rate, which gauges the purchasing power of a currency, stood at 61.77 for the yen in May, assuming it was 100 for a dollar in 2010. That is almost the same level as 1971. "This means Japan became poorer and Japanese industries have grown weaker," he added.

    The trend is best seen in real wage levels. The average annual wage in Japan was 444,000 yen last year, compared to Korea's W42.54 million (US$1=W1,313). In dollar terms at the current rate, Japan's was $31,714 and Korea’s $32,316.

    Japanese business giant Toyota now ranks only 39th in the world in terms of total market capitalization at $211 billion, while Korea's Samsung ranks 25th at $299.1 billion. But Noguchi added, "The weak yen trend could stop if interest rates are raised." 

    • Copyright © Chosunilbo & Chosun.com
    Previous Next
    All Headlines Back to Top