Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Japanese flags flutter in front of buildings in Tokyo's business district on Feb. 22, 2016.

Toru Hanai/Reuters

Japan announced on Friday a list of its firms subject to tighter foreign-ownership rules, including majors such as Toyota Motor Corp. and Sony Corp., as the United States and Europe step up scrutiny of industries key to national security.

Japan identified 518 of its roughly 3,800 listed firms as having operations core to national security, making them targets for stringent regulations, a list released by the Ministry of Finance showed.

The tighter rules covering foreign investment in a dozen sectors crucial to national security, such as oil, railways, utilities, arms, space, nuclear power, aviation, telecoms and cyber security, take effect from Friday.

Story continues below advertisement

Foreign investors buying a stake of 1 per cent or more in Japanese firms in the 12 areas now face prescreening in principle, compared with the previous threshold of 10 per cent.

“The revised law is aimed at [regulating] accelerating foreign direct investment in Japan,” said Finance Minister Taro Aso, referring to a law passed in November, and adding that technology and patents needed protection from a national security standpoint.

“As we have explained our intention overseas, misdirected criticism such as that we may limit foreign investment in Japan has disappeared.”

Some analysts say the revised law reflects Tokyo’s concern over China’s growing influence in industries such as defence, running the risk of leaks of confidential information and outflows of key technology.

However, critics have argued the regulation discourages foreign investors in Japan’s stock market, and runs counter to government efforts to lure investment to revitalize the economy.

Exemptions to allay such concerns include investment without prescreening by foreign financial institutions, and the waiver of prereporting requirements for certified sovereign wealth funds and other investors who meet certain criteria.

Foreign investors have a huge influence on share prices as they own about 30 per cent of Japan’s roughly 575-trillion-yen stock market, and make up about 60 per cent of trading turnover.

Story continues below advertisement

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies