Japanese outward FDI flows 2023, by industry

Investments in the wholesale and retail industry topped the ranking of Japan's outward foreign direct investment (FDI) flows in 2023, reaching a value of around 5.4 trillion Japanese yen. Japanese FDI outflows in the finance and insurance industry amounted to over 4.1 trillion yen.

Outward FDI

Japan has been one of the leading sources of FDI globally, and its outward FDI stock has almost doubled throughout the past decade. Looking at the geographical distribution in 2022, Japan had the largest FDI position in the United States, followed by the Netherlands and China. At the same time, the U.S. held the largest inward FDI position in Japan. 

Inward FDI

While Japan has been among the leading FDI investors in recent years, FDI inflows have been much lower. However, over the past decade, Japan's inward FDI stock has gradually increased. A closer look at the sectoral distribution of inward FDI revealed that the finance and insurance industry and the electric machinery sector were by far the most important industries attracting inward FDI in 2023. Contrary to the ongoing efforts to attract inward FDI, the government has recently followed the lead of other leading economies in making amendments to its Foreign Exchange and Foreign Trade Act, thereby creating stricter FDI regulations and expanding the list of protected industries.