- “Social and economic stability” is now the top reason foreign companies value Japan (63.4%, up 24.3 points) — the first time it has ranked first
- The biggest problems are exchange-rate swings (52.1%), language and communication (40.3%) and finding skilled staff (38.4%)
- European and North American firms increasingly see Japan as more important; Chinese firms less so
- About 57% plan to expand or strengthen their business in Japan
The report at a glance
- Original title
- 2025年度 外資系企業ビジネス実態調査 ―変動する国際情勢下で価値を増す日本の安定性―
- Publisher
- JETRO (Japan External Trade Organization)
- Published
- February 2026
- Fieldwork
- 25 September – 31 October 2025; 1,520 valid responses from 7,698 companies (19.7%)
- Language
- Japanese (PDF)
- Access
- Free, no registration
Key numbers and findings
Why foreign companies value Japan
| Attraction | Share |
|---|---|
| Social and economic stability | 63.4% (+24.3 pts) |
| Presence of related industries (clusters) | 45.2% |
| Quality of infrastructure | 42.9% |
| Market size and growth | 40.7% |
| Shared business values | 31.4% |
What gets in the way
| Challenge | Share |
|---|---|
| Exchange-rate volatility | 52.1% |
| Language and communication barriers | 40.3% |
| Shortage of skilled staff | 38.4% |
| Population decline / shrinking market | 38.2% |
| Weak consumer purchasing power | 33.2% |
Service companies feel the language barrier most (45.2%); manufacturers worry most about currency (44.6%). Asked what the government should improve, companies put recruiting skilled talent first (19.6%), then simpler, digital administration (15.1%) and multilingual support (14.6%).
Performance and outlook
- 61.6% expect to be in profit this financial year; 17.1% expect a loss.
- For next year, 34.7% expect profits to improve and 9.0% expect them to worsen.
- 21.4% of European companies say Japan's importance to their group is rising (up 10.5 points); North American companies 21.0% (up 8.0 points).
What it means for companies entering Japan
The headline is a shift in why companies choose Japan. A year ago, market size and infrastructure led the list; now it is stability. In a period of tariffs and geopolitical risk, a large, rule-bound, predictable market has become a selling point in its own right — and European firms are the ones moving fastest in that direction.
The challenges are just as useful. Language comes second only to currency, and for service businesses it comes first. That is a practical warning: budget for Japanese-speaking staff or partners from day one, not as a later add-on. Weak purchasing power and a shrinking population also mean that growth in Japan usually comes from taking share or trading customers up, not from a rising tide.
How to read the original
The PDF is a short slide-style summary (in Japanese) with charts broken down by region, industry and company size. Machine translation handles it reasonably well because most of the content is charts and short labels. JETRO also publishes English material for investors on its Invest Japan pages.
Open the original PDF (Japanese) ↗
This is an independent summary by Japan Business Insider. Figures are taken from the original publication; the interpretation in “Our reading” is our own. Please check the original before quoting figures.