International investors capitalise on Japan’s FDI thirst

Author: Brian Yap | Published: 16 Jan 2017
By boosting both FDI and corporate governance, Tokyo is killing two birds with one stone
Japanese corporates are making a comeback on the global M&A stage, but the government’s crackdown on corporate governance irregularities has given inbound foreign direct investment (FDI) an indirect nudge.

As part of the Japan Revitalisation Strategy, the Abe administration has set the goal for the total value of FDI into the country to reach JPY35 trillion ($306.6 billion) in 2020. The Ministry of Economics, Trade and Industry (METI) hosted the INVEST JAPAN Forum on October 7.

Counsel in Japan attribute the increased inflow of FDI into the world’s third-largest economy to the gradual dismantling of the country’s decades-old cross-shareholding structure. They believe that the recently-introduced Corporate Governance Code, which took effect on June 1 2015, has forced major financial institutions and corporations to release a significant amount of their cross-held shares....