When Prime Minister Fumio Kishida took office in October 2021, he promised to rebuild Japan’s economy through a strategy he dubbed, “New Capitalism.” Kishida would quickly change course on his economic plan, which included redistribution at its core in an effort to reduce social inequities. As he stepped down three years later, the changes he brought to the economy seem to pale in comparison to this outsized promise.

The new prime minister, Shigeru Ishiba, has promised not to let the nation’s economy fall back into the deflation, but according to Katsuhiko Aiba, chief economist at Citi, Ishiba’s economic policies are not significantly different from Kishida. According to Financial Times, Aiba said Ishiba’s plan would combat higher prices while promoting wage increases before the year ends.

The Japanese economy is very unique, having undergone significant growth from the 1960’s onward, it became stagnate in the 1990’s with inflation, interest rates and wage growth remaining near zero, according to the Financial Times.

What they’re saying: Credit managers with customers in Japan have found them to be consistent over the last year. According to FCIB’s Credit and Collections survey, customers in Japan are paying seven days beyond terms on average. Respondents report not seeing any increase or decrease in payment delays. Those experiencing payment delays have found them to be no better or worse than average.

Delays are largely attributed to billing disputes, with 64% of respondents reporting they are the most common causes of delays. Additionally, 36% attribute delays to customer’s payment policies and 18% say foreign exchange rates.

One respondent found that disputes are a major factor when it comes to payment delays and complications with Japanese customers.

“This market is very particular with disputes,” one respondent to FCIB’s Credit and Collections survey wrote. “Even if the invoices have been legally assigned to a factor and they are liable to pay on a specific due date, the customer will hold payment until disputes are resolved. Everything about the invoice has to be in perfect match to their specs before they approve a payment.”

Before bringing on a customer based in Japan, it is important to familiarize yourself with the country’s work culture. The Japanese value relationship building, according to World Trade REF, and as a result you might go through several rounds of meetings before reaching a final agreement. The series of meetings will ensure that all details are carefully considered while also allowing you to build a rapport with your customers.

Those with customers in Japan may have noticed companies are detail-oriented and thorough in their work. Whether this comes down to settling a dispute or reaching a final agreement. The World Trade REF notes to be prepared to answer a wide variety of detail-oriented questions during your sessions. It’s best to be prepared and familiarize yourself with what you are presenting beforehand in order to appear confident during your meeting.

“Start early building a relationship with your customer, and include your salesperson – you’ll make a team and teams work together,” one respondent wrote.

The bottom line: Despite recent changes in leadership, Japan’s economy remains stable with credit managers noting no significant changes customer behavior.