The Impact of Abenomics Policies on Inward Foreign Direct Investment in Japan

This study aims to analyze the form of policies related to inward Foreign Direct Investment (FDI) and the impact of the Abenomics policy on inward FDI in Japan, particularly in the non-financial sector. Introduced in 2012, Abenomics seeks to address deflation, stimulate economic growth, and enhance Japan’s competitiveness in global markets. The third arrow of Abenomics, known as the growth strategy, focuses on fostering private-sector investment, opening previously restricted Japanese markets through structural reforms, and promoting FDI. This study employs a quantitative approach with interpretive analysis, drawing on literature and various secondary sources. Data analysis in this study involves categorizing and synthesizing information, identifying patterns, assessing significance, and deriving conclusions. The findings of this study indicate that implementing the global expansion strategy, combined with the reform of the Special National Strategic Zone and the optimization of the Japan External Trade Organization’s (JETRO) role within the Abenomics growth strategy, has significantly improved the business environment for foreign investment in Japan. This implementation has also led to an increase in foreign tourists and foreign companies, a decrease in effective tax rates, an improvement in corporate governance practices, and an increase in the number of professional foreign workers. The data show that inward FDI in Japan has increased significantly since the implementation of this policy in 2014, reaching a peak in 2020. Through these achievements, the Abenomics growth strategy has effectively positioned Japan as an attractive investment destination for foreign enterprises while bolstering Japan’s role in the global economy.