The Abe administration's updated growth strategy calls for doubling the outstanding amount of foreign direct investment in Japan to ¥35 trillion by 2020, with the government taking necessary policy steps and the prime minister and other top leaders using their overseas visits as opportunities to persuade foreign businesses to invest here. Foreign direct investment in Japan remains sluggish even as FDIs increase in other economies that are picking up. What ultimately matters will be the effort to improve foreign businesses' expectations of the Japanese market's growth potential.
According to the World Investment Report by the United Nations Conference on Trade and Development, global FDI flows in 2013 rose 9 percent from the previous year to $1.452 trillion. As cross-border investments such as opening or expansion of manufacturing plants or corporate acquisitions increase, the report forecasts the uptrend in worldwide FDI flows to continue, with the total reaching $1.6 trillion this year, $1.75 trillion in 2015 and $1.85 trillion in 2016.
Japan's outbound direct investments also rose 10 percent to $136 billion in 2013. Last year, Japan was the world's biggest source of FDI in the United States for the first time since 1992, with the amount reaching a record $40 billion led by large-scale acquisitions of American businesses by Japanese firms such as Softbank Corp.'s $21.6 billion purchase of mobile carrier Sprint Nextel. U.S. investments by Japanese firms are expected to maintain a similar level this year as major acquisitions — such as Suntory's recent $16 billion buyout of Beam Inc. — continue to take place.