Japan remains an export powerhouse, yet domestic consumption has increased in importance. This is a result of a strengthening economy, a more buoyant stock market, improving dividends, confidence from increased corporate profitability and other related trends. Compared to the past, the Japanese economy also is much more closely linked with Asia (both in terms of exports and imports) and Japanese firms now routinely consider India and Southeast Asian countries when evaluating investment destinations. Japan has become a key driver of growth in Asia as a market, investor, and source of knowledge.
The desire to revitalize Japan’s service sector is creating opportunities for U.S. and other foreign businesses and investors. Foreign businesses may be able to supply services that improve the productivity and efficiency of Japanese service providers. Businesses may also locate attractive opportunities as the Japanese government moves to deregulate, privatize, and liberalize in an effort to enhance the level of competition in Japan’s service sector as well as to bring in new ideas and methods.
