Foreign direct investment (FDI) from Japan - statistics & facts
Japan is among the leading source economies of foreign direct investment (FDI) in the world. In 2024, it was the second-largest source of FDI, behind the United States. Japan’s outward FDI position amounted to close to 52 percent of its GDP in 2024. By comparison, the United States’ FDI stock was equal to 34 percent of its GDP. Japan’s role as a top investor worldwide is contrary to the low level of inward FDI it attracts, especially relative to the size of its economy. Nippon Steel’s acquisition of U.S. Steel became one of the largest cross-border M&As in the first half of 2025.
Japanese outward FDI flows reached a record high in 2019. The sharp increase that year could mainly be attributed to an increase in cross-border merger and acquisition (M&A) activity driven by a deal of the Japanese company Takeda Pharmaceutical. Takeda Pharmaceutical’s acquisition of the biopharmaceutical company Shire became Japan’s largest foreign acquisition in history and the largest cross-border M&A transaction globally in 2019.
The U.S. received the largest amount of FDI from Japan, followed by the United Kingdom and Singapore. The U.S. was also by far the largest recipient of Japanese FDI in terms of Japan’s outward FDI stock. Japan was the country with the largest FDI position in the U.S. in 2024. After an initial intervention by the U.S. government due to security concerns, Nippon Steel’s takeover of U.S. Steel was completed in June 2025, becoming the largest outward M&A deal of Japanese companies in the first half of 2025.
Development of Japanese outward FDI
Over the past two decades, FDI from Japan has been on a general upward trend. In 2024, FDI outflows amounted to around 204.3 billion U.S. dollars, up 11 percent from the previous year. This was equal to five percent of its gross domestic product (GDP). By comparison, inward FDI flows accounted for 0.33 percent of the GDP. Japan’s outward FDI position rose to around 2.1 trillion U.S. dollars.Japanese outward FDI flows reached a record high in 2019. The sharp increase that year could mainly be attributed to an increase in cross-border merger and acquisition (M&A) activity driven by a deal of the Japanese company Takeda Pharmaceutical. Takeda Pharmaceutical’s acquisition of the biopharmaceutical company Shire became Japan’s largest foreign acquisition in history and the largest cross-border M&A transaction globally in 2019.
Japan’s outward FDI by region and industry
Equity represented the largest component of FDI flows from Japan in 2024, followed by reinvestment of earnings and debt instruments. The majority of Japanese FDI was directed at non-manufacturing industries, with finance and insurance and wholesale and retail accounting for the largest share of Japan’s outward FDI flows. Communications and chemicals and pharmaceuticals were other major target industries of Japanese FDI investors.The U.S. received the largest amount of FDI from Japan, followed by the United Kingdom and Singapore. The U.S. was also by far the largest recipient of Japanese FDI in terms of Japan’s outward FDI stock. Japan was the country with the largest FDI position in the U.S. in 2024. After an initial intervention by the U.S. government due to security concerns, Nippon Steel’s takeover of U.S. Steel was completed in June 2025, becoming the largest outward M&A deal of Japanese companies in the first half of 2025.
