Exhibit 1

Japan

This description of Japan is dated November 7, 2003 and appears as Exhibit 1 to Japan’s Annual Report on Form 18-K to the U.S. Securities and Exchange Commission for the fiscal year ended March 31, 2003.

     THE DELIVERY OF THIS DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS DOCUMENT (OTHERWISE THAN AS PART OF A PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT FILED UNDER THE U.S. SECURITIES ACT OF 1933) DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF OR GUARANTEED BY JAPAN.

TABLE OF CONTENTS

FURTHER INFORMATION

     This document appears as an exhibit to Japan’s Annual Report filed with the U.S. Securities and Exchange Commission (the “Commission”) on Form 18-K for the fiscal year ended March 31, 2003. Additional information with respect to Japan is available in such Annual Report, in the other exhibits to such Annual Report and in amendments thereto. Such Annual Report, exhibits and amendments may be inspected and copied at the public reference room maintained by the Commission at: 450 Fifth Street, N.W., Washington, D.C. 20549. Information regarding the operations of the public reference room can be obtained by calling the Commission at 1-800-SEC-0330. The Annual Report and its exhibits and amendments are also available through the Commission’s Internet website at http://www.sec.gov.

     In this document all amounts are expressed in Japanese Yen (“¥” or “yen”), except as otherwise specified. The spot buying rate quoted on the Tokyo Foreign Exchange Market on November 6, 2003, as reported by The Bank of Japan at 5:00 p.m., Tokyo time, was ¥109.90=$1.00, and the noon buying rate on November 6, 2003 for cable transfers in New York City payable in yen, as reported by the Federal Reserve Bank of New York, was ¥110.15=$1.00. See “Foreign Trade and Balance of Payments — Foreign Exchange Rates”.

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     References herein to Japanese fiscal years (“JFYs”) are to 12-month periods commencing in each case on April 1 of the year indicated and ending on March 31 of the following year. References to years not specified as being JFYs are to calendar years.

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Japan

GENERAL

Area and Population

     Japan, an archipelago in the western Pacific, consists of four main islands (Hokkaido, Honshu, Kyushu and Shikoku) which are mostly mountainous located in the same approximate range of latitude as the east coast of the United States north of Florida. The total area of Japan is approximately 146,000 square miles, which is slightly less than that of California and about 4% of the United States. It is bordered by the Sea of Japan to the west and north, and by the Pacific Ocean to the east and south.

     Japan has a total population of approximately 127.6 million (estimated as of April 2003). It has one of the highest population densities in the world and approximately 22% of its people are concentrated in three metropolitan areas (Tokyo, Osaka and Nagoya). Japan’s average annual rate of population increase during the years 1998-2002 was 0.2%. Japan’s population increased 0.11% during the 12 months ended December 31, 2002.

Government

     The legislative power in Japan is vested in the Diet, which currently consists of a House of Representatives having 480 members and a House of Councillors having 247 members. Members of both houses are elected by direct universal suffrage, except that some members of each house are elected by proportional representation. The power of the House of Representatives is superior to that of the House of Councillors in respect of approving the national budget and electing the Prime Minister.

     The executive power is vested in the Cabinet consisting of a Prime Minister, elected by the Diet from among its members, and other Ministers appointed by the Prime Minister, a majority of whom must be members of the Diet. The judicial power is vested in the Supreme Court and such lower courts as are established by law.

     Japan’s prefectures, cities, towns and villages have a certain degree of local autonomy through popularly elected legislative bodies and chief executives. The central government exercises its influence on local governments indirectly through financial aid and prescribing standards of local administration.

Political Parties

     Members of the House of Representatives are elected for four-year terms unless the House of Representatives is dissolved prior to expiration of their terms. The House of Representatives was dissolved on June 2, 2000 and an election was held on June 25, 2000 under a revised electoral system in which 300 members were elected from single-member districts and 180 members were elected through a proportional representation process from 11 regional districts. The House of Councillors currently consists of 247 members who are elected for six-year terms with one-half of the membership being elected every three years. In an election in July 2001, which was the first one held under a revised system, 121 members were elected, of which 48 members were elected through a proportional representation system and 73 members were elected from 47 districts that correspond to one metropolis and the other 46 prefectures of Japan. In the next election scheduled for 2004 and thereafter, the total number of the members of the House of Councillors will decrease to 242, of which 96 members will be elected through a proportional representation system, and 146 members will be elected from the 47 districts. Currently, the House of Councillors consists of 126 members who were elected in July 1998 and 121 members who were elected in July 2001.

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     The following tables sets forth the membership by political party of the House of Representatives as of August 19, 2003 and the House of Councillors as of August 22, 2003.

International Organizations

     Japan is a member of the United Nations and other international organizations, including the International Monetary Fund, International Bank for Reconstruction and Development, International Development Association, International Finance Corporation, International Fund for Agricultural Development, Multilateral Investment Fund, Multilateral Investment Guarantee Agency, Asian Development Bank, African Development Bank, African Development Fund, European Bank for Reconstruction and Development, Inter-American Development Bank and Inter-American Investment Corporation. See “Subscriptions to International Financial Organizations”.

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THE ECONOMY

General

     Japan has a highly advanced and diversified economy, which has developed in response to changing conditions in Japan and the world. During the era of high economic growth in the 1960s and the early 1970s, the expansion was based on the development of heavy industries consuming large quantities of resources. During the 1980s, there was rapid growth in high value-added industries, such as electronics and precision instruments, which employ high level technology and consume relatively low quantities of resources. The service sector of the economy significantly increased during the 1980s and 1990s.

     The Japanese economy has experienced a significant downturn since the early 1990s, in the aftermath of the collapse of the “bubble” economy, which has been characterized by, among other things, a depreciation in asset values (particularly affecting the domestic real estate and securities markets), reduced capital investment and housing construction and the deterioration in credit quality of loans and other assets in the financial system. In the wake of failures of Japanese banks and other financial institutions, beginning in JFY 1997, a series of legislative measures were taken to stabilize the Japanese financial system, including legislation authorizing the Japanese Government to temporarily nationalize financially troubled Japanese banks under certain circumstances. Several banks have been nationalized in recent years, and some of these banks have subsequently be returned to private sector ownership. The economic situation has been extremely severe since the late 1990s due to decreases in final demand, including personal consumption, business investment and housing investment, reflecting the deterioration in consumer and corporate sentiments arising from concerns about employment prospects and the direction of the domestic and world economies.

     In JFY 2002, there were some signs of recovery in the Japanese economy, such as increases in corporate profits, exports and production. The provisional growth rate of Japan’s GDP for JFY 2002 at 1.6% is above the projected growth rate of 0.0% that the Japanese Government published in December 2001. There are uncertainties, however, in the current outlook for Japan’s economy, particularly in light of the uncertain near-term prospects of the world economy, the outbreak of severe acute respiratory syndrome or SARS, in China and other Asian countries, persistent deflationary pressure and a large amount of non-performing loans.

Economic Policies

     In recent years, the Japanese Government has implemented a series of policies intended to stimulate the Japanese economy, including fiscal stimulus packages, looser monetary policy, structural reform efforts, assistance to financial institutions and monitoring of the exchange rate between the yen and the United States dollar and other currencies.

     In June 2001, the Japanese Government proposed a new policy package entitled “Structural Reform of The Japanese Economy: Basic Policies for Macroeconomic Management”, and is continuing to carry out economic and fiscal structural reforms. Additional economic recovery programs were established during JFY 2001 in order to support the policy package.

     The Japanese Government’s structural reform efforts continued in JFY 2002, including the following:

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Gross Domestic Product and National Income

     The following table sets forth information pertaining to Japan’s gross domestic product for JFY 1997 through JFY 2002.

     In December 2002, Japan released revised GDP data for JFY 1990 through to JFY 2001. The revisions were due to the implementation by Japan of a new valuation method for calculating national accounts. As a result of this new method for calculating GDP, the GDP information which follows revises and replaces previously published GDP information, National Income information and certain other financial information. For JFY 2002, such information is calculated pursuant to the new valuation method.

Gross Domestic Product

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     The following table sets forth information pertaining to Japan’s gross domestic product, as seasonally adjusted, for each quarter of JFY 2002.

Gross Domestic Product (JFY 2002)(a)

     The following table sets forth national income for JFY 1997 through JFY 2001.

National Income

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Industry

     The following table sets forth the proportion of gross domestic product contributed by major industrial sectors of the economy for 1997 through 2001. These figures have been revised to reflect the new method for calculating GDP, as discussed above.

GDP by Industrial Sectors (at current prices)

Energy

     The following table sets forth the total amounts of primary energy supplied and the percentages supplied by different sources for JFY 1997 through JFY 2001.

     The table below sets forth information regarding crude oil imports for JFY 1998 through JFY 2002.

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     Japan has historically depended on oil for most of its energy requirements and almost all its oil is imported, mostly from the Middle East. Oil price movements thus have a major impact on the domestic economy. Recently, as the geopolitical tension in the Middle East worsened and culminated in war in Iraq, crude oil prices increased significantly. Since peaking around March 2003, however, crude oil prices have decreased.

     Japan has worked to reduce its dependence on oil by encouraging energy conservation and the use of alternative fuels. In addition, a restructuring of industry, with emphasis shifting from primary industries to processing and assembly type industries and from manufacturing industry to service industry, has also contributed to the reduction of oil consumption.

     The following table sets forth information relating to total electric power generating capacity and electric power generation for JFY 1997 through JFY 2001.

Price Indices

     The table below sets forth information concerning changes in Japan’s wholesale and consumer price indices for the periods indicated.

Labor

     Japan’s labor force (seasonally adjusted) expanded steadily until 1998 but has been decreasing since 1999. In 2001, average employment (seasonally adjusted) was estimated at 64.1 million, including 4.9% employed in agriculture, forestry and fisheries, 30.0% in industry, and 65.1% in services and other sectors. In 2002, average employment (seasonally adjusted) was estimated at 63.3 million, including 4.2% employed in agriculture, forestry and fisheries, 29.1% in industry and 66.7% in services and other sectors. The unemployment rate (seasonally adjusted) in Japan has gradually increased since 1993 and it ranged between 5.3% and 5.5% during 2003. In the first two months of 2003, the rate remained between 5.2% and 5.5% and it was 5.4% in March 2003, the most recent period for which statistics are available.

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     The table below sets forth information regarding wage index (total cash earnings (nominal)) and industrial production index (manufacturing and mining) for the periods indicated.

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FOREIGN TRADE AND BALANCE OF PAYMENTS

Foreign Trade

     Japan is one of the leading trading nations of the world, ranking third to the United States and Germany in both merchandise exports and merchandise imports among the IMF member countries in 2001.

     In 1998, Japan’s trade surplus increased to a record ¥13,991 billion as imports into Japan plunged, decreasing faster than exports. The trade surplus decreased to ¥12,280 billion in 1999 since exports decreased at a higher rate than imports. Both imports and exports increased substantially in 2000, and the trade surplus declined further to ¥10,716 billion as imports grew faster than exports. In 2001, the trade surplus declined further to ¥6,564 billion due to a decrease in exports and an increase in imports, but in 2002 the trade surplus rebounded to ¥9,881 billion, as exports increased while imports decreased slightly.

     The following tables set forth information relating to foreign trade for the years indicated. In these tables exports are stated on an f.o.b. basis and imports on a c.i.f. basis. Monetary figures are based on actual movements of goods as calculated by the Ministry of Finance. (This method of computation differs from that used in calculating balance of payments, in which both exports and imports are stated on an f.o.b. basis.)

Foreign Trade of Japan