JETRO Invest Japan Report 2023
Chapter2. Trends in Inward FDI in Japan Section 1. Trends in Inward FDI to Japan

1. Flow

According to the "Balance of Payments" (asset and liability principle) of the Ministry of Finance (MOF) and Bank of Japan (BOJ), FDI flow to Japan in 2022 increased significantly by 68.6% year-on-year to 6.5 trillion yen (Chart 2-1). Looking at this by type of capital, equity capital increased 4.2% year-on-year to 2.7 trillion yen, reinvestment of earnings rose 18.3% year-on-year to 1.9 trillion yen, while debt instruments, which represent the lending and borrowing of funds between enterprises in capital ties, turned positive at 1.8 trillion yen from -0.4 trillion yen in the previous year. Equity capital, which reached a record high in 2021, continued to increase in 2022, and economic activities continue to develop for new investments and capital increases in Japan.

Chart 2-1: Trends in FDI Flow to Japan
Compiled based on the balance of payments data published by the Bank of Japan and the Ministry of Finance. Figures for through 2022 are on a calendar year basis, and figures for 2023 are as of the second quarter (end of June). Note, however, that simple comparisons cannot be made between before and after 2013 due to differences in accounting standards. In the amount 1996-year negative 310000000 yen, 1997-year 3160000000 yen, 1998-year 1.7179 trillion yen, 2000-year 1.1616 trillion yen, 2001-year 6000000 yen, 2002-year 1.4666 trillion yen, 2004-year 820.7 billion yen, 2005-year-550.2 billion yen, 2007-year 205-year 249.7 billion yen, 2008-year-2008-year 1,147.8 billion yen, 2010-year 6 2011: 69.3 billion yen; 2012: 1,050.1 billion yen; 2014: 2,074.5 billion yen; 2016: 4,491.5 billion yen; 2018: 2,074.9 billion yen; 2019: 6,070.5 billion yen; 2020: 3,083.7 billion yen; 2022: 6,462.9 billion yen Jun-Mar. 415.9 billion yen, the maximum amount during this period was 6.7015 trillion yen in 2020, and the minimum amount was minus 248.6 billion yen in 2006.

Note: The figures before 2013 are calculated based upon a different principle.
Source: “Balance of Payments” (MOF, BOJ)

2. Stock

At the end of 2022, the FDI stock in Japan (asset and liability principle) was 46.2 trillion yen, up 13.5% from the previous year, and the ratio in relation to nominal GDP was 8.3%. As of the second quarter of 2023, the FDI stock had gradually increased to 47.3 trillion yen.

Looking at the FDI stock in Japan at the end of 2022 (asset and liability principle) by type of capital, equity capital increased 10.4% year-on-year to 23.7 trillion yen, reinvestment of earnings increased 8.0% year-on-year to 7.9 trillion yen, and debt instruments increased 22.4% year-on-year to 14.6 trillion yen. Reflecting the debt instruments turning positive as mentioned earlier, the share of debt instruments in the stock increased to 31.6% at the end of 2022 from 29.2% at the end of 2021 (Chart 2-2).

Chart 2-2: Trends in FDI Stock in Japan
Compiled based on the outstanding balance of foreign assets and liabilities in Japan of the Ministry of Finance and the Bank of Japan, and the National Accounts of the Cabinet Office Figures for 2010 through 2022 are on a calendar year basis, and figures for 2023 are as of the second quarter (end of June). The changes in the amounts are as follows: 2010 18.7 trillion yen, 2011 18.8 trillion yen, 2012 19.2 trillion yen, 2013 19.6 trillion yen, 2014 23.7 trillion yen, 2015 24.8 trillion yen, 2016 28.2 trillion yen, 2017 30.7 trillion yen, 2019 34.3 trillion yen, 2020 40.2 trillion yen, 2021 40.7 trillion yen, 8.3% of 2022 46.2 trillion yen GDP, June 2023 47.3 trillion yen,

Note: Breakdown of stock in 2013 and before is not disclosed.
Source: "International Investment Position of Japan" (MOF, BOJ), "National Accounts of Japan" (Japan Cabinet Office)

JETRO Invest Japan Report 2023

Introduction

Chapter1. Inward FDI Trends in the World

  1. Section1.

    Global Inward FDI Flow in 2022

  2. Section2.

    Global Greenfield Investment in 2022

  3. Section3.

    Responses of Global Companies to Geopolitical Risks

  4. Section4.

    Changes in Global Investment Destinations due to Geopolitical Risks

Chapter2. Trends in Inward FDI in Japan

  1. Section1.

    Trends in Inward FDI to Japan

  2. Section2.

    Trends in Inward FDI to Japan by Country and Region

  3. Section3.

    Trends in Inward FDI to Japan by Industry

  4. Section4.

    Trends in Greenfield Investment in Japan

  5. Section5.

    Trends in Inbound M&A in Japan

  6. Section6.

    Long-Term Trends in Greenfield Investment Projects in Japan

  7. [Column 1]

    JETRO's initiatives for the entry of semiconductor-related companies into Japan

  8. [Column 2]

    With the recovery of inbound tourism, Japanese tourism assets is once again in the spotlight

  9. [Column 3]

    Promotion of More Active and Desirable M&A in Japan

Chapter3. Recent Government Measures

  1. Section1.

    Basic Policy on Economic and Fiscal Management and Reform 2023

  2. Section2.

    Action Plan for Attracting Human and Financial Resources from Overseas

  3. Section3.

    Green Innovation Fund Projects

  4. Section4.

    Fund for Advanced Semiconductor Production Infrastructure Development

  5. Section5.

    Project to Accelerate Biomanufacturing Revolution

  6. Section6.

    Subsidy for Development of Regional Data Centers

  7. Section7.

    R&D Project of the Enhanced Infrastructure for Post-5G Information and Communication Systems

  8. Section8.

    Innovative Information and Communication Technology Fund Project (Beyond 5G (6G) Promotion Fund Project)

  9. Section9.

    Establishment of a "New System" for Accepting Highly-Skilled Foreign Professionals (from April 2023)

  10. Section10.

    Startup Development Five-year Plan

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