Japan limits foreign investment in half of listed firms

Japan detailed an array of companies that will be subject to new rules restricting foreign investment, moving to protect industries it says are core to national security from the influence of foreign state interference.

The Foreign Exchange and Foreign Trade Act requires some foreign investors to report in advance when they plan to buy a more than 1 per cent stake in the designated firms, versus a previous threshold of 10 per cent. The steps add restrictions to investments in more than half the listed companies in the country, though a series of blanket exemptions apply for registered investors, including most financial and asset management firms.

The list announced on Friday groups companies into one of three categories: (i) those exempt from the restrictions entirely; (ii) a group of around 500 companies operating in so-called core industries including nuclear power and defence; (iii) a broader group of more than 1,500 companies in non-core industries, including broadcasting and transport, subject to less stringent rules.