Content - Switzerland and Japan

Economic Relations

In 2017, Japan will remain Switzerland's sixth most important export market. Exports to Japan accounted for 2.5% of all Swiss exports. While exports to Japan rose sharply in 2016, they fell by 0.6% in 2017. Pharmaceutical products make up the majority of exports. With 4.4% of foreign direct investment, Switzerland is the seventh most important investor in Japan (2017).

Swiss Trade with Japan

In 2017, Japan remained Switzerland’s sixth largest export market (after the EU, the US, China, India and Hong Kong). Swiss exports to Japan accounted for 2.5% of overall Swiss exports. In 2017 Swiss exports to Japan fell slightly by 0.6% to 7,467 million CHF, after having surged to a record of 7,511 million CHF in the previous year. On the other hand, Swiss imports from Japan surged further by 51.6%, following a 13.5% rise seen in 2016. As a result, Switzerland saw its trade surplus with Japan shrink sharply to 1,473 million CHF from 3,557 million CHF a year earlier. The surge in imports was largely attributable to a jump in imports of precious metals such as gold. If gold bars and other precious metals etc. are excluded from the data, Switzerland’s trade surplus would be 3,733 million CHF with Japan, with imports rising by 15.3% to 3,593 million CHF and exports rising 0.7% to 7,326 million CHF.

By products, exports of pharmaceutical products increased albeit slightly by 0.7% after having surged by 30.1% in 2016. The item, which accounts for 41.4% of the total, remains the biggest export commodity of Switzerland to Japan. Exports of watches dropped by 2.6% as once-buoyant demand from Chinese tourist in Japan stopped rising. The share of watches in the overall Swiss exports to Japan dropped to 16.5% from the recent peak of 20.8% marked in 2014 but maintains the second spot. Exports of machinery (up 8.0%) and agricultural products (up 4.4%) enjoyed solid growth, while those of precious metals (down 8.0%), medical devices (down 5.6%) and chemicals (down 1.4%) declined after having marked a YoY growth in the previous year. In the meantime, major import items of Switzerland from Japan saw the increase in the past year. Imports of precious metals in particular showed a strong performance. They rose by 120.4% in 2017 following a 41.2% rise registered in the previous year. The item now accounts for 49.9% of the total Swiss imports from Japan. Imports of pharmaceutical products, the third biggest import item with a share of 10.6%, surged by 53.9%. Imports of general machinery and electrical machinery were also strong, rising 14.2% and 15%, respectively. Conversely, the growth in vehicle imports was rather modest (up 4.5%). As a result, its share of the total Swiss imports from Japan dropped from 17% in 2016 to 11.7% in 2017, but remained the second largest import item.

Japan run a deficit of 69.6 billion yen on service trade with Switzerland in 2017. Japan’s service exports to Switzerland fell by 4.1% to 450.7 billion yen, while service imports from Switzerland saw a hefty increase of 14.3% to 520.3 billion yen.

Major Investments

Switzerland is Japan’s seventh largest foreign investor with 1,259 billion yen (11.3 billion CHF) in 2017, making up 4.4% of all FDI stock. The rank of Switzerland is down by one point from the previous year’s sixth position, which Switzerland maintained since 2013. Nevertheless, Switzerland remains the third largest European foreign investor in Japan (after the Netherlands and France). The breakdown by industry shows that Swiss FDI in the manufacturing sector amounts to about 525 billion yen (4.7 billion CHF). Swiss FDI stock in the non-manufacturing sector, on the other hand, dropped sharply to about 225 billion yen (2.0 billion CHF) in 2017 from around 680 billion yen (6.1 billion CHF) a year earlier, a development that is largely due to a significant drop in FDI flows of Swiss wholesale and retail industries to Japan. Chemicals and pharmaceuticals accounted for the lion’s share of Swiss FDI stock in manufacturing in Japan, amounting to 474 billion yen (4.3 billion CHF) in 2017. As for non-manufacturing, Swiss companies invested about 180 billion yen (1.6 billion CHF) in finance and insurance industries.

All above information is based on the "Japan: Economic Report 2018" document.
Detailed information on the recent economic relations between Switzerland and Japan can be found here.

Long Relations

Switzerland sent its first trade delegation to Japan in 1863. It was headed by Aimé Humbert, a representative of the Swiss watch industry. This visit led to the conclusion of a trade and friendship treaty between the two countries in 1864.  

An agreement on free trade and economic partnership between the two countries came into effect on September 1, 2009. All details can be found here.

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