Prime Minister Shinzo Abe's Cabinet approved draft legislation on Friday to impose tougher rules on foreign investments in stocks related to national security, despite opposition from market participants.
The planned rules will require overseas investors to report in advance when they plan to buy more than 1 percent of shares in companies related to Japan's national security, compared with the current 10 percent threshold, according to the Finance Ministry. The government aims to secure passage of the revised bill outlining the rules during the current parliamentary session.
To reduce the potential negative impact of the rules, the government plans to exempt foreign investors from reporting in advance where they have no intention of influencing corporate decisions.