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Foreign direct investment in Japan notched record in 2016

Europe supplied nearly half of inbound investment

A consortium led by France's Vinci Airports acquired management rights to Kansai International Airport in 2016. (Photo by Wataru Ito)

TOKYO -- Japan's net inflows of foreign direct investment marked a record high of 3.8 trillion yen ($33.7 billion) last year thanks to major projects from European and Asian enterprises, a Japan External Trade Organization report out Tuesday shows.

JETRO looked at foreign enterprises that made such investments as constructing facilities in Japan or acquiring more than a 10% stake in a Japanese company to participate in management.

Net inflows from Europe were the largest at 2.01 trillion yen. A consortium led by Vinci Airports of France completed Japan's largest M&A deal of 2016, according to Thomson Reuters data cited in the report, acquiring management rights to Kansai International Airport.

Net inflows from Asia, whose internet companies are pouring into Japan, grew 34% on the year to 903.7 billion yen in 2016. Taiwan's Hon Hai Precision Industry, or Foxconn, took a controlling stake in Sharp that August. North American inflows stayed flat at 629.8 billion yen.

The inward foreign direct investment stock reached 27.8 trillion yen to mark a third straight record year. Europe accounted for 49% on big investments in the automotive and medical fields. Asia came to 18%, a tenfold increase from 2000. North America constituted 26%.

Nearly three-quarters, or 72%, of foreign-affiliated companies surveyed said they will expand their business within the next five years. On areas where they would like to see improvement by the Japanese public or private sectors, 36% said "fostering globally competitive human resources (Japanese)" and 32% said "simplification of administrative procedures (reduction of number of procedures, enabling one-stop services)."


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