JETRO Invest Japan Report 2023
Chapter2. Trends in Inward FDI in Japan Section 2. Trends in Inward FDI to Japan by Country and Region

1. Flow

Breaking down FDI flow to Japan (asset and liability principle) in 2022 by region, North America accounted for the highest amount at 2.0 trillion yen, up 73.2% from the previous year, followed by Europe at 1.9 trillion yen, recovering from -0.8 trillion yen in 2021, and Asia at 1.8 trillion yen, down 27.2% from the previous year (Chart 2-3). In North America, which was the largest, the U.S. increased by 25.9% from the previous year to 1.4 trillion yen, making it the largest among all countries and regions in the world. Canada increased significantly to 0.6 trillion yen from 50 billion yen in 2021. In Europe, the second largest by country and region, negative net inflow in 2021 turned to be positive, as mentioned above, with the U.K. at 1.1 trillion yen, Switzerland at 0.4 trillion yen, and France at 0.2 trillion yen. In Asia, Singapore decreased -1.1% year-on-year to 0.8 trillion yen, Hong Kong saw a significant decrease to 0.4 trillion yen from 1.3 trillion yen in 2021, and Taiwan increased to 0.2 trillion yen from 25 billion yen in 2021 (Chart 2-4).

Compiled from balance of payments statistics of the Ministry of Finance and the Bank of Japan FDI in Japan on a flow basis is shown by region for both 2021 and 2022. North America 2021 1,162.6 billion yen 2022 2,013.4 billion yen, Europe 2021 -769.8 billion yen 2022 1,858.9 billion yen, Asia 2021 2,431.1 billion yen 2022 1,768.9 billion yen, Latin America 2021 583.8 billion yen 2022 697.6 billion yen, Oceania 2021 410.4 billion yen, 2022 125 billion yen, Middle East 2021 6 billion yen 2022 2 billion yen, Africa 2021 9.6 billion yen, 2022 minus 3 billion yen. — Chart 2-3: FDI to Japan in 2022 (flow by region)

Chart 2-4:FDI Flow to Japan in 2022: Top 10 Countries and Regions (100 million Yen, %)
Ranking	Investor Country/ Region	2022	2022 Growth rate (YoY)	2022 Share
1	United States	14,000	25.9	21.7
2	United Kingdom	11,252	＊	17.4
3	Singapore	8,434	-1.1	13.1
4	Cayman Islands	6,247	13.4	9.7
5	Canada	6,134	1,118.8	9.5
6	Switezerland	3,911	＊	6.1
7	Hong Kong	3,523	-73.5	5.5
8	France	1,939	-24.9	3.0
9	Taiwan	1,835	638.4	2.8
10	Australia	1,723	-44.4	2.7
—	World	64,629	68.6	100.0

Note: The marks of * in the chart show that the investment in 2021 is negative due to net withdrawal and therefore growth rate is not applicable.
Source: "Balance of Payments" (MOF, BOJ)

2. Stock

Looking at the FDI stock at the end of 2022 (asset and liability principle), Europe was the largest at 19.8 trillion yen and accounted for 42.8% of the total, followed Asia and North America at 11.1 trillion yen (24.1% of the total) (Chart 2-5). In Europe, the overall composition ratio fell slightly from the previous year's ratio of 44.0% due to the decline in stock in the Netherlands (down 14.7% year-on-year) and sluggish growth in France (up 2.0% year-on-year). By country and region, the U.S. was the largest at 10.3 trillion yen (22.3% of the total), followed by the U.K. at 7.7 trillion yen (16.7% of the total) (Chart 2-6). The top 10 countries/regions accounted for 84.9% of the total FDI stock in Japan and were mainly taken up by Europe and Asia other than the U.S.

Compiled based on Japan's foreign assets and liabilities balances of the Ministry of Finance and the Bank of Japan. As of the end of 2022, based on the principle of asset and liability, the total amount outstanding by region was 46.2 trillion yen, comprising 42.8% of the total amount of 19.8 trillion yen in Europe, 24.1% of the total amount of 11.1 trillion yen in Asia, 24.1% of the total amount of 11.1 trillion yen in North America, 6.5% of the total amount of 3 trillion yen in Latin America, and 2.5% of the total amount of 1.1 trillion yen in others. — Chart 2-5: FDI Stock in Japan by Region (end of 2022)

Chart 2-6: FDI Stock in Japan by Country and Region (end of 2022)(100 million yen, %)
Ranking	Country/ Region	Stock	Growth rate (YoY）	Ratio
1	United States	102,789	12.2	22.3
2	United Kingdom	76,966	36.3	16.7
3	Singapore	48,232	28.4	10.4
4	Netherlands	33,894	-14.7	7.3
5	France	32,309	2.0	7.0
6	Hong Kong	26,187	-5.4	5.7
7	Cayman Islands	24,990	43.0	5.4
8	Switzerland	21,744	11.2	4.7
9	Germany	13,940	13.9	3.0
10	Taiwan	10,733	19.6	2.3
—	Others	69,896	9.4	15.1
—	Total	461,680	13.5	100.0

Source: "International Investment Position of Japan" (MOF, BOJ)

Go to next page in chapter 2