Japanese Financial Markets

Japan is one of the most significant trading and investment partners for the United States. Since 2021 Japan has been the largest source of foreign direct investment into the United States. With a substantial FDI stock of $721 billon (trade gov). For more than a decade, Japan's FDI position in the U.S. has increased annually on a historical cost basis. Japanese businesses primarily invest directly in the United States into manufacturing, particularly in the production of transportation equipment. These investments support nearly a million U.S. employees, which increases economic output and exports. Due to Japan and the United States' strategic partnership and close economic relations, opportunities exist in innovative industries including space, defense, and security. Japan is a significant importer of American aerospace and defense technology and, increasingly, a collaborative co-developer. Defense contracting, sophisticated manufacturing, and cyber security are related industries that are expanding. American businesses enter the Japanese market for a variety of reasons. After the United States and China, Japan has the third-largest economy in the world, and behind Canada, Mexico, and China, it is the fourth-largest importer of American goods. Japan is a significant player in the international trading system. Aside from their size and wealth, Japanese business partners expose American corporations to intense competition and innovative technology.