Japanese outward FDI flows 2021, by industry

Investments in the finance and insurance industry topped the ranking of Japan's outward foreign direct investment (FDI) flows in 2021, reaching a value of almost 5.86 trillion Japanese yen. Japanese FDI outflows in the finance and insurance industry accounted for more than one-third of the total value of outward FDI flows that year.

Outward FDI

Japan has been one of the leading sources of FDI globally, and its outward FDI stock has more than doubled throughout the past decade. Looking at the geographical distribution, Japan had the largest FDI position in the United States, followed by the UK and the Netherlands. 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, inward FDI stock has gradually increased, exceeding the government’s target of 35 trillion yen in inward FDI stock in 2020. A closer look at the sectoral distribution of inward FDI revealed that that the chemicals and pharmaceuticals industry and the finance and insurance sector were by far the most important industries attracting inward FDI in 2021. 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.