MEDIA NOTE

U.S.-Japan Investment Initiative 2006 Report

Progress on Opening Japan to Foreign Investment

June 29, 2006

The U.S. Department of State and the Ministry of Economy, Trade and Industry of Japan today released the United States-Japan 2006 Investment Initiative Report prepared for President Bush and Prime Minister Koizumi. The Department of State welcomes the ongoing commitment of the Japanese Government to take concrete steps to reduce barriers to foreign direct investment in Japan, as outlined in the report.

Read the Full Report (PDF)

The report applauds Prime Minister Koizumifs strong commitment to encouraging foreign direct investment (FDI) in Japan, notably his progress toward doubling FDI since 2001. Foreign investment is a catalyst for economic growth and innovation in both Japan and the United States that creates jobs, transfers technology, revives corporations, and supplies risk capital. It also helps build deeper political and social understanding between the two countries.

The report documents the Initiativefs success in promoting changes to Japanfs Corporate Code, which will enter into force in May 2007, that will expand access to merger and acquisition (M&A) techniques for foreign companies in Japan. The report also welcomes an effort by the Government of Japan to translate its laws and regulations into other languages. In the report, the Government of Japan reaffirms the valuable role M&A plays in promoting foreign investment. The United States will continue to work to increase business opportunities for U.S. companies seeking to merge with or acquire firms in Japan by ensuring that they are treated in the same way as Japanese corporations.

The report stresses the need to further ease restrictions on investment in educational and medical services to allow Japan to better face demographic changes. Under reform initiated by the Ministry of Education in 2004, branch campuses of two additional U.S. universities were designated as qualified foreign universities in Japanfs educational system, and other foreign branches are now applying for similar designation.

Both governments agree that public attitudes towards FDI are important and have conducted outreach in Japan and the United States to provide information on the investment climate.

The Investment Initiative is part of the U.S.-Japan Economic Partnership for Growth (EPG). President Bush and Prime Minister Koizumi launched the EPG in June 2001 to support economic renewal and revitalization in both Japan and the United States.