Nowadays, it is obvious that Japanese firms have invested a huge amount of money in foreign companies because the weak domestic economy is just spurring Japanese companies to expand abroad.

It is well known that Japanese firms have a long history of investment in the past. At the time, they really focused on spending money abroad. However, with the occurrence of Asian financial crisis, they changed their investing plan. Unfortunately, they encountered with some blockage after the change they made, such as the increase of China’s labor costs, earning minuscule returns. Although later the Japanese government made their firms just focus on their domestic industry, due to some aging problems, they still suffered from the financial deficit. Finally, they stopped to invest in the foreign companies. But it is still with big troubles since the exports of Japan are suffering a lot. They focused too much on the broad firms while neglected the benefits that can be obtained from its domestic companies. Besides, profits that earned from the broad investment couldn’t make up the loss that they made. This action destroyed the balance of Japanese trade.

If japan wants to make their economy back to growth, they should make appropriate economic plan which is balancing their investment between the domestic companies and foreign one.

http://www.economist.com/news/finance-and-economics/21629566-weak-domestic-economy-spurring-japanese-firms-expand-abroad-outward-bound