Japan overseas investments reach twenty-two year high

Following up on my blogpost of July 5th entitled “The enormous opportunity Japan now offers lawyers everywhere”:

The Jakarta Globe reported in an article this past Sunday, July 15th that:  “Japan Inc. signed a record 262 overseas deals in the first six months of [2012]. The buying spree, worth 3.49 trillion yen ($44 billion), topped the previous first-half record of 247 deals worth 1.16 trillion yen in 1990, in the final dizzying phase of Japan’s intoxicating asset bubble, according to Tokyo-based advisory company Recof.”

In just one example of the booms trajectory, the Japan Times reported today that: “The number of plants and offices of Japanese firms in India ha[s] increased up to fourfold over the past five years and [is] continuing to pick up speed.”

These reports underscore in striking fashion just how enormous this opportunity is, and why law firms around the world with an ability to assist – should be paying particularly close attention – and acting where they can to help Japanese corporates secure new opportunities.

What’s driving the boom

As the Jakarta Globe reported: “Japanese authorities have encouraged direct private-sector foreign investments and reiterated the mantra of “harnessing the growth of Asia and emerging markets” to boost the economy at home.  ‘Many years ago, it was machinery companies or automakers leading Japan’s direct foreign investments, said Naonori Yamada, deputy director of international economic research for the government-backed Japan External Trade Organization.  Now it’s [consumer products or services] companies trying to firm up their access to emerging markets,’ as the Japanese market remains sluggish, he said.”

What’s possible for law firms

The Jakarta Globe Sunday story prompted me to reiterate what I wrote on July 5th:  “As Asian Legal Business reported last year, DLA Piper, Milbank and Arnold & Porter all won roles on a landmark Japanese-Latin America outbound deal.  The deal saw a consortium of Japanese financial institutions invest $1.5 billion in Venezuela’s national oil company, Petroleos de Venezuela (PDVSA). DLA Piper acted for the consortium which included The Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI)—Japan’s government-owned financial insurance institution—as well as commercial bank lenders.”

How your firm can be next

Whether a foreign or domestic law firm – if you are seeking to assist Japanese corporations expand overseas:

  • Initiate a business development effort aimed at matching opportunities with potential clients.
  • Develop referral relationships with law firms and other advisors to Japanese corporate management teams – where you can work together to develop these opportunities.
  • Establish an active social media initiative around this opportunity.  In particular – blog about it.

The past 48 hours of news about Japan’s record-breaking overseas investment levels have underscored just how immense the opportunity is for those entrepreneurial lawyers who take the initiative effectively.

Posted by John Grimley

John Grimley edits and publishes Asia Law Portal

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