The Japanese direct investment position abroad has nearly doubled since 2012, with companies strong in the domestic market also speeding up overseas expansion.
Outstanding Japanese overseas direct investment stood at 174 trillion yen ($1.54 trillion) at the end of September, up 91% from the end of 2012, according to balance of payments statistics compiled by the finance ministry and the Bank of Japan. Roughly 40% of that increase, or 33 trillion yen, occurred over the last 12 months of that period, as spending picked up sharply in late 2016 when the recovery of the global economy became pronounced.
The number of overseas acquisitions by Japanese companies totaled 667 in 2017, marking a second straight record year of dealmaking, according to Tokyo-based merger and acquisition advisory Recof. Communications and financial companies are stepping up international acquisitions in the face of global competition. Additionally, retail and other sectors that have traditionally been strong in the domestic market are also investing actively overseas.
Seven & i Holdings, for example, last year announced the $3.3 billion purchase of some 1,100 gasoline stations and convenience stores from U.S. mid-tier player Sunoco.
Smaller companies are also actively shopping abroad. For instance, condominium management company Anabuki Housing Service has invested in a Vietnamese peer.
Earnings from direct investments, such as dividends, totaled 10.76 trillion yen for the January-October period, so the full-year tally is sure to rise to a record surpassing the 11.4 trillion yen of 2015. More and more Japanese companies are capturing growth overseas via investments, including through purchases of foreign bonds and other securities.