Japan has always been aggressive in outbound investments while its inbound market has received little in the way of
investment from overseas. This lack of inbound capital sometimes makes Japan seem like a “closed country” from an outside perspective. However,the situation is changing. The FDI has grown year on year over the past five years, the number of foreign visitor arrivals has grown and reached to 24 million in 2016. Moreover, the number of foreign workers has grown and has exceeded over 1 million.
The main reason why the situation is changing is the growing interest of globalization due to Japanese economic growth and the upcoming 2020 Tokyo
Olympics. The second reason is that Japan is facing a shortfall in resources due to a decreasing population and now has to accept
outside resources.However, FDI reflected as part of the GDP accounts for only 5%, which is lower than that of 10% for China and 30% for USA so the potential of further FDI can be expected.With this situation, the government is easing regulations and has put in place policies to support inbound investment.