Investing Japan, as Japan invests offshore

July 6, 2009

Even in the best of times, Japan has never been a cakewalk for foreign investors. But in the wake of the global credit crisis, the world’s second-largest economy can be downright baffling.

The recession has wiped out overseas demand for electronics and automobiles and sent a rush of mid-sized firms into bankruptcy.

Activist investors are increasingly on the retreat, citing corporate governance that some say is among the worst in the developed world. But even amid such a dour backdrop, there are still plenty of bright spots.

Most major Japanese companies have avoided massive losses on toxic assets. Faced with a shrinking market at home, those cash-rich firms are increasingly looking to move abroad. Outbound acquisitions hit a record of about $70 billion last year, and Tokyo firms are making aggressive moves into fast-growing Asia markets.

Bolstered by overseas investments, leading financial firms such as Mitsubishi UFJ and Sumitomo Mitsui are looking to become global players.

For the next two day, the Reuters Japan Investment Summit will focus on these and other issues facing one of the world’s most puzzling markets.

Through interviews with some of Japan’s most important influential executives, the Summit generate exclusive stories and investable insights.

3 comments

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Most major Japanese companies have avoided massive losses on toxic assets. At least Japanese companies did learn from the last crash when the real estate bubble exploded, I wish I could say the same about American and European companies, but some will never learn.

I hope Japanese companies Investment will continue to look for good oppurtinities in Europe, and in particular the still growing economies of Balkans like that of Albania & Kosovo

Posted by Lec Neli | Report as abusive

The “activist” investors bailed out because the economy went belly up, as was predicted by the companies and Japanese government who were resisting their “advice”. When the going got tough, they turned tail and ran for the exit. What pension fund would invest long term in a country with a famously aging population and underfunded pension system ? They were attempting a quick raid on the cash box, that’s all.

“Corporate governance” is one refuge for the parasite with no aptitude for work.

Posted by mrjohn | Report as abusive