Tuesday December 4, 4:25 PM
UPDATE 1-Japan FDI shrinking on domestic, global slump
By Mariko Hayashibara
sg.biz.yahoo.com
TOKYO, Dec 4 (Reuters) - Crumbling economic sentiment at home and a global slowdown helped shrink foreign direct investment flows both into and out of Japan in April-September, data showed on Tuesday, and analysts saw no let up in the coming months.
Foreign direct investment (FDI) into Japan in the form of capital participation, acquisitions and loans fell to 1.5358 trillion yen ($12.37 billion) in the first half of fiscal 2001, down 18.7 percent from the same period last fiscal year, Japan's Ministry of Finance said.
That marks a sharp contrast to a 30 percent jump in investment flows to a record 3.1252 trillion yen into Japan last year, which came as troubled local industries such as the retail and financial sectors put their assets up for sale or sought foreign partners to survive competition.
FDI out of Japan in the first half showed an even sharper fall, plunging 40 percent from a year earlier to 1.6740 trillion yen.
If the second half figures are the same as the first, net FDI investment outside Japan will come to around 280 billion yen for the full year -- a sharp fall from 2.24 trillion yen a year before and 5.04 trillion yen in 1999/2000.
"What's noticeable about the data is the hefty decrease in FDI out of Japan," said Shinichi Sato, manager at Tokyo-Mitsubishi Securities' investment strategy division.
"Even during the financial crisis in 1997 and 1998, FDI out of Japan was in fact very large. This shows that the economic downturn is hurting Japanese firms much more seriously," Sato added. In 1997/98, FDI from Japan stood at 5.9 trillion yen. |
