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The economy of the Japanese Empire in World War II was designed to provide Japan with resources and raw materials that the Japanese home islands lacked. Beginning in 1937 with significant land seizures in China, and to a much greater extent after 1941, when annexations and invasions across Southeast Asia and the Pacific created the Greater East Asia Co-Prosperity Sphere, the Japanese government sought to acquire and develop critical natural resources in order to secure economic independence.

Among the natural resources Japan seized and developed were coal in China (where production rose substantially under Japanese control, from 15 million metric tonnes in 1936 to 58 million metric tonnes in 1942)^{[citation needed]}, sugar cane in the Philippines, petroleum from the Dutch East Indies and Burma, and tin and bauxite from the Dutch East Indies and Malaya. Japan also purchased the rice production of Siam, Burma, and Cochinchina.

During the early stages of Japan's expansion, the Japanese economy expanded considerably. Japanese iron production rose from 3,355,000 tonnes in 1937 to 6,148,000 tonnes in 1943. Steel production rose from 6,442,000 tonnes to 8,838,000 tonnes over the same time period. In 1941 Japanese aircraft industries had capacity to manufacture 10,000 aircraft per year. From 1941 to September 1944 defence production (including airplanes and vessels) rose by 94%. Much of this economic expansion benefitted the "Zaibatsu", large industrial conglomerates, which invested heavily in occupied territories.^{[citation needed]}

Over the course of the Pacific War, the economies of Japan and its occupied territories all suffered severely. Inflation was rampant; prices in Japan in 1944 were 3.25 times higher than in 1936. Japanese heavy industry, forced to devote nearly all its production to meeting military needs, was unable to meet the requirements of Japan and the occupied territories (which had previously relied on trade with Western countries for their manufactured goods). Local industries in many countries increased production in response to this shortfall, but were unable to produce at high enough levels to avoid severe shortfalls. Furthermore, maritime trade, upon which the Empire depended greatly, was sharply curtailed by damage to the Japanese merchant fleet over the course of the war. From a fleet of 6,000,000 tonnes of shipping in 1941, Japan was reduced to one of 2,000,000 tonnes by 1944.

By the end of the war, what remained of the Japanese Empire, particularly in war-torn China, was wracked by shortages, inflation, and currency devaluation. Transport of the resources which the empire had been built to obtain was nearly impossible, and industrial production in Japan's shattered cities ground to a halt. Although the Empire achieved strong economic growth in key military industries, it never achieved a stable system, and the destruction wrought by the ongoing war eventually brought the Japanese economy to a virtual standstill.