Japan's economy, now the world's fourth-biggest, grew 1.9% in 2023 in nominal terms – meaning it is not adjusted for inflation – but in dollar terms, its gross domestic product (GDP) stood at $4.2tn compared with $4.5tn for Germany. The shift, coming more than a decade after it ceded second place to China, has been attributed to the yen's sharp falls against the dollar over the past two years. A weaker yen eats into profits on exports when earnings are repatriated. The Japanese currency dropped by almost a fifth against the US dollar in 2022 and 2023, including a 7% fall last year." [...] Like Japan, Germany is resource-poor, has an ageing population and is heavily dependent on exports. Europe's biggest economy has also been shaken by rising energy prices caused by Russia's war in Ukraine, rising eurozone interest rates, and a chronic shortage of skilled labour. While Japanese carmakers and other exporters have benefited from a weak yen – which makes their goods cheaper on the international market – the country's labour crunch is worse than Germany's, and it is struggling to address a low birthrate. The failure of government-led attempts to boost the birthrate means chronic labour shortages are expected to worsen, even as the country welcomes a record number of foreign workers. The economy revitalisation minister, Yoshitaka Shindo, told reporters that Germany leapfrogging Japan showed it was "imperative" to promote structural reforms, including getting more women into full-time work and lowering the barriers to foreign investment.