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11 July 2018

Foreign Investment is Staying in Japan for Another Year—This is the Main Reason

Decades of little or no change in the incorporated sector of Japan made some damage, now they are trying to amend.

Analysts were really enthusiastic last weekend at the Tokyo Stock Exchange, just when they found out that the ratio of foreign investment in Japanese stocks stood the same as it was in the year before (30.2%), fact that speaks loudly for brokers as they feel the influence of positive international investment pouring in.

Local private companies are merging and creating new conglomerates, all thanks to the intervention of overseas management firms and the overall improvement of corporate governance within Japanese businesses, attracting more global investors as a result.

Skeptics like Joe Bauernfreund believe that companies in Japan are used to traditional norms, holding large amounts of cash reserves while at the same time managing an undesirable complex structure. He reaffirms that if these corporations improve their efficiency regarding money and assets, more investors will flock to Tokyo and regional districts.

Curious facts about business life in Japan:

  • Positive responses from corporate leaders often means “no”.
  • Body language is very important, they value indirect communication.
  • Meetings are used in order to get more information about certain issue, not for brainstorming.
  • Appreciate the high value of silence, they do it.
  • Solidarity among co-workers gets strong recognition.
  • If you are a business card person, then Japan is your place, they see them as an extension of your identity.

While names like Toyota, Kakaku.com, Digital Garage, Tokyo Electron and Toshiba are a clear reflection of how Japanese enterprises tend to change slower than their Western counterparts, the release of shares and the de-regulation of the sector is catching the attention of foreign players that want so much more than a simple stake, a strong presence and influence seems crucial for them just to stay for another year round.

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