Japan first began more active investment in NZ in the late 1970s, a time when Japanese capital was making its presence felt all over the globe.
The initial investment targets were forestry, fisheries, automobiles and information technology. But Japanese investment per se dates back much further, with Kanematsu, a major trading house or sogo shosha, opening in NZ in 1937.
A number of other large concerns opened NZ operations in the late 1950s as Japan began its industrialisation phase.
Since those initial forays, Japanese companies have invested a cumulative total of over $NZ5 billion into NZ, making it the country's fifth-ranked foreign direct investor, though within touching distance of being the third.
It accounts for just less than 7 per cent of New Zealand’s foreign direct investment (FDI) stock. Japan is also a very significant portfolio (non-direct) investor in NZ, as a holder of substantial amounts of debt issued by both public and private sector entities.
Now Japan is coming back for more. For Japanese companies, the domestic market no longer represents a source of growth.
With a population declining since 2015 (the first major world economy to do so), and with a third already over 60 years of age, domestic demand for most goods and services is either flat or declining. There is no visible path to trajectory reversal given the deeply embedded opposition to immigration.
As a result, Japanese capital has been seeking sources of growth and yield offshore. This has already been evident in NZ over the last 2-3 years as a number of deals have been struck.
Notable in the more recent Japanese investments has been the diversity. As the Table below shows, over the last few years this has covered industries as varied as advertising, marine technology and beverages.
Recent Japanese investments in NZ