▲ Container ships at Tokyo Port
As South Korea's potential entry into the "5040 Club" is being discussed, the process by which Japan, a former member, dropped out is drawing renewed attention.
The "5040 Club," which refers to countries with a population of 50 million and a per capita income of 40,000 dollars, includes only five nations among some 200 countries worldwide as of 2025: the United States, Germany, the United Kingdom, France, and Italy.
Japan reached this milestone first in Asia in the mid-1990s, but its per capita income has now slipped back to the 30,000-dollar range.
This is the result of the depreciation of the Japanese yen over several decades.
Having gone through a period of high economic growth from the 1960s to the 1980s, Japan experienced a record-breaking surge in the super-strong yen during the mid-1990s following the 1985 Plaza Accord.
The Plaza Accord refers to the international policy coordination agreed upon in September 1985 by finance ministers from five nations—the United States, the United Kingdom, Germany, France, and Japan—gathered at the Plaza Hotel in New York to induce a decline in the value of the dollar.
With its dollar-converted income increasing significantly, Japan's per capita national income rose to 43,580 dollars in 1995.
However, the value of the yen plummeted following international policy coordination dubbed the "Reverse Plaza Accord," launched in April 1995 by the Group of Seven (G7) to curb excessive yen appreciation.
According to World Bank statistics, Japan's per capita national income dropped to 35,530 dollars in 1998, returning to the 30,000-dollar range.
Japan's per capita national income faltered again in the early 2000s amid a prolonged economic slump following the burst of the economic bubble and a weak yen, but it rebounded immediately after the Great East Japan Earthquake in 2011.
At that time, Japanese companies and financial institutions sold foreign currency assets to secure yen funds, causing the yen to appreciate sharply.
Based on 2011 figures, per capita national income soared to 47,800 dollars, and reached 50,540 dollars in 2012.
However, former Prime Minister Shinzo Abe, who took office in 2012, implemented Abenomics policies centered on aggressive monetary easing, and as the value of the yen subsequently fell, Japan's per capita national income hovered between the late 30,000-dollar and early 40,000-dollar ranges.
During this period, the yen-dollar exchange rate fluctuated between 100 and 120 yen per dollar.
Then, as a global supply chain crisis erupted in early 2022 due to Russia's invasion of Ukraine and the aftermath of the COVID-19 pandemic, the U.S. Federal Reserve began raising interest rates at a rapid pace to withdraw liquidity injected into the market during its pandemic-era quantitative easing policies.
Because the Bank of Japan was maintaining its negative interest rate policy introduced in 2016 at the time, the interest rate gap between the U.S. and Japan inevitably widened, increasing the incentive for "yen carry trades," in which investors borrow and sell the yen to invest in dollars and other assets.
Since then, the yen has remained weak against the dollar, causing Japan's per capita national income to drop from 40,740 dollars in 2023 to 37,170 dollars in 2024.
It is estimated to have stood at just 38,340 dollars in 2025.
At the same time, some point out that it is difficult to explain Japan's departure from the 5040 club solely based on exchange rates.
Some analysts in Japan suggest that structural factors—such as prolonged low growth, stagnant productivity and wage growth, and declining growth potential due to a low birth rate and aging population—combined with recent yen depreciation to leave per capita national income relatively sluggish.
(Photo: AP, Yonhap News)
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