Income and wealth percentile in Japan

What the numbers say about Japan.

Japanese median income is around ¥3.8 million a year per adult, roughly $25,000 at current exchange rates. The average sits around ¥6 million. Those numbers look modest in dollar terms, but the comparison is misleading. Japan has run a long deflation through most of the 1990s and 2000s, and prices in the country are correspondingly lower than the dollar conversion suggests. A typical Tokyo apartment, restaurant meal, or train ticket costs less in real terms than the equivalent in any G7 peer.

Real-yen wages have barely moved for a generation. Average nominal salaries in 2024 sat at almost the same level as in the late 1990s, the longest wage stagnation in the OECD by some margin. The reasons are tangled. A weak labour movement, lifetime employment that prioritises retention over raises, a deflationary mindset embedded in corporate planning, and a workforce that aged faster than productivity adjusted. The country produces some of the world's most successful exporters, but those gains have flowed disproportionately to corporate balance sheets and shareholders rather than to wages.

Wealth concentration looks moderate by international standards. Median household net worth per adult is around ¥15.5 million, with the top 1% above ¥254 million. Most household wealth is held in cash and bank deposits, an unusually high share for a developed economy. Japanese households remain reluctant to hold equities at meaningful weight, partly because of the post-1989 stock-market crash that left a generation suspicious of financial markets. Property wealth in Tokyo and Osaka is significant but more concentrated geographically. Outside the major cities, real estate has actually deflated for thirty years. A house bought in rural Hokkaido or Kyushu in 1990 may be worth less today in nominal terms than at purchase, before adjusting for inflation.

The geography of high incomes follows Tokyo. The capital concentrates roughly a third of the country's GDP and the bulk of high-paying corporate, finance, and tech roles. Osaka, Nagoya, and Yokohama trail. Outside the major metropolitan areas, median wages drop substantially, and the population is ageing rapidly. Many rural prefectures now have median ages above 55, and entire villages depopulate each year. The income gap between Tokyo and rural Japan is comparable to the Madrid-versus-Andalusia gap, and growing.

The yen has weakened sharply against the dollar and euro since 2021. That makes Japan look poorer in international rankings than it actually is, and it has shifted purchasing power away from imported goods. Wages have started to rise modestly under labour shortages, but the structural drag from an ageing workforce and slow productivity growth is unlikely to lift soon.