JETRO Invest Japan Report 2023
Chapter2. Trends in Inward FDI in Japan Section 3. Trends in Inward FDI to Japan by Industry

According to the statistics for FDI in Japan by industry based on the directional principle in 2022, FDI flow to Japan in total increased by 14.8% from the previous year to 4.3 trillion yen and marked a record high. In the manufacturing sector, the growth slowed slightly to 1.6 trillion yen (down 8.7% from 2021, or 38.5% of the total) due to the reversal of the sharp increase in 2021 (up 597.4% from 2020), while the non-manufacturing sector showed remarkable growth, reaching 2.6 trillion yen (up 36.8% from 2021, or 61.5% of the total) (Chart 2-7). Looking at the detailed industry sectors, the finance and insurance sector was the largest at 1.2 trillion yen despite a 2.2% decrease from the previous year, followed by the transportation sector at 0.7 trillion yen, up 232.0% from the previous year. Also, in the electrical machinery and equipment sector (up 80.9% from the previous year), which ranked third, there was a project to establish a Japanese subsidiary of a Korean EV battery material manufacturer (Chart 2-8).

At the end of 2022, the FDI stock in Japan by industry (directional principle) was 29.9 trillion yen in total, up 8.6% from the previous year. Looking at the stock by Industry, the manufacturing industry accounted for 10.2 trillion yen (up 9.2% year-on-year, 34.1% of the total), while the non-manufacturing industry accounted for 19.7 trillion yen (up 8.2% year-on-year, 65.9% of the total) (Chart 2-9). As for the detailed industry sectors, the finance and insurance sector was the largest, increasing 7.0% from the previous year to 11.8 trillion yen (39.4% of the total). This was followed by transportation equipment at 3.1 trillion yen (10.3% of the total), up 8.5% from the previous year. Notable year-on-year growth rates were 358.2% for Iron, non-ferrous and metals, with a value of 0.5trillion yen and 1.2 trillion yen for transportation (up 148.7% year-on-year) (Chart 2-10). On the other hand, the wholesale trade/retail trade fell 76.3% year-on-year to 0.1 trillion yen (0.4% of the total).