Japan’s Per-Capita Wealth Beats America’s by $1,239

Japan overtook the United States last year in economic output per person, according to a report Thursday that highlighted that nation’s stubborn rise as an economic superpower.

The report by Japan’s Economic Planning Agency was the latest in a string of reports on the island nation’s growing wealth. For example, the Tokyo Stock Exchange has become the world’s largest, and most of the world’s largest banks are Japanese.

The agency said Japan’s per-capita gross national product--the output of goods and services for each member of the population--reached the equivalent of $19,642 in 1987, compared to $18,403 in the United States.

Japan’s ascendance was made possible partly by a strong 4.2% increase in its total gross national product. More important, though, was a 17% rise in the value of the Japanese yen versus the dollar from one year to the next.

When the yen is strong, it makes Japan’s economic output more valuable in terms of dollars. It also increases Japan’s financial muscle in the United States and other markets.

Japanese Make Key Loans

“As an economic power, the United States has already been surpassed,” Ezra Vogel, a Harvard University expert in East Asian affairs, said in reaction to the report.

“The critical question is who has the leverage, who has the strategy, who has the critical assets that influence the course of world economic development,” Vogel said.

“The key people who are able to make new loans are the Japanese. People begin to look to the rules of the game as the lender defines it.”

“Unfortunately, it’s continuing to happen,” he said. “Japan is continuing to collect more chips and the United States is continuing to lose chips.”

The report drew a different reaction from Japanese observers, who contended that it gives an unrealistic picture because it is based on what they regard as an overvaluation of the Japanese yen versus the dollar.

“It’s kind of magic--numerical magic. It has no sense in real life,” said Yoshihisa Kitai, the economist in the New York office of the Long-Term Credit Bank of Japan.

Japan has indeed grown wealthier, but the Japanese people still feel poor when they compare their buying power with that of Americans, Kitai said. Land costs are high because farmland is overly protected, and an inefficient distribution system keeps retail prices high, he said.

In 1986, when calculations were based on $1 trading at 168.51 yen, the U.S. gross national product per capita was $17,464 and Japan’s was $16,330. In 1987, the calculations were based on $1 for 144.62 yen. The dollar currently is trading at about 127 yen.

122 Million People

It is difficult to tell what nation has the highest gross national product per capita because of drastic fluctuations from year to year caused by exchange-rate shifts and the rise and fall of oil prices.

The United Arab Emirates was the world’s leader in 1985 at $19,120 per capita, followed by the Sultanate of Brunei at $17,580, the United States at $16,400 and Switzerland at $16,380, according to World Bank Atlas 1987. Japan ranked well back at $11,330, the atlas said.