Japan on an International Shopping Spree: Japan spends more than $101 billion in overseas acquisitions this year

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Tokyo Japan at night [Photograph Courtesy of DORONKO/Flickr]

Tokyo Japan at night [Photograph Courtesy of DORONKO/Flickr]

The world is currently witnessing Japan’s largest surge in global acquisitions to date. However, unlike previous expenditures, these acquisitions may have not been from the inspiration to expand, but rather from trying to combat the threat of shrinking.

Japan’s efforts to acquire US Sprint Nextel Corp. has made it to the mainstream, but many acquisitions have slipped under the rader and have not drawn much US media attention. However, according to Retail Japan News’s article “Economy Growth: Japan on Buying Spree”, they have now managed to spend over $101 billion in overseas investments.

Japanese acquisitions are nothing new, in the 1980s Japanese companies expanded so vastly in the US that it fostered widespread anti Japanese sentiments among US companies and citizens . However, this time around, they do not seem to be greeted with any significant hostility but rather with open arms. The Japanese sectors currently expanding most rapidly are big banks and pharmaceutical companies.

The failure for many companies to succeed domestically is also a large contributor to this surge of overseas acquisitions. Japan’s electronics used to compose 30% of the world’s exports, but figures have now decreased to around 14%.The increasing strength in the yen  is also playing a large role as it is increasing Japan’s purchasing power.

Their strategy has also shifted from focusing investments in the US markets to almost anywhere that they can make a profit. Though Japan’s investments may expand all around the world, they may be spreading themselves too thin. They are lacking in strength and the ice might break beneath them. While the Japanese presence abroad may be growing, Japan’s economy still remains quite vulnerable. The downpour of doubt in the Japanese market has forced companies to have no choice but to look to foreign markets stay afloat.

To read the full article click here: http://www.japanretailnews.com/2/post/2012/11/economy-growth-japan-on-a-buying-spree.html

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