Bridging Continents

Inbound Investment from Japan to Australia

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  • Report
  • 10 minute read
  • August 2026

Japanese investment in the Australian economy has been historically significant, not only for its scale but also for its transformative and diverse impact on key industries. From mining and agriculture in the 1960s–70s to real estate, financial services, and industrial sectors in the 1980s–90s, more recently infrastructure, renewable energy and retail and consumer, this economic partnership has continually evolved. An enduring trusted relationship grounded in mutual economic complementarities, it has played a pivotal role in driving Australia's growth, diversification, and regional integration, while simultaneously strengthening diplomatic and cultural ties between the two nations.

 

 

This report highlights the extensive and multi-dimensional influence of Japanese investments on Australia’s economic landscape, emphasising their contributions to various industries over time.

Snapshot of Japan's Inbound Activities in Australia

308

Closed deals (2014-2026 YTD)

36.7%

Investment in Industrials & Logistics

4th

Foreign investment ranking (ABS, 2025)*

* Includes direct, portfolio and other types of investment.
New closed deals
Closed Target Buyer Sector % Value (A$m)
7/1/2026 Clamms Seafood Pty Ltd Asahi Shokuhin Co. Ltd. Retail & Consumer 100.0 -
6/23/2026 Mikado Rail Pty Ltd Tokio Marine Holdings Inc; Nippon Koei Co Ltd TMT - -
4/2/2026 Exco Partners Pty Ltd NEC Corp; NEC Australia Pty Ltd TMT 100.0 -
5/8/2026 Damday Pty Ltd Daikin Industries Ltd; Airmaster Corp Pty Ltd Industrials 100.0 -
4/2/2026 Spandex Australia Holdings Pty Ltd Spicers Ltd (Australia); KPP Group Holdings Co Ltd Industrials 100.0 -
5/1/2026 Australian Scientific Pty Ltd Horiba Ltd Industrials 100.0 -
4/1/2026 Bargain Car Rentals Australia Pty Ltd Tokyo Century Corp Financial Services 100.0 -
4/1/2026 Food Odyssey Pty Ltd (100% Stake) Genki Global Dining Concepts Corp Retail & Consumer 100.0 -
6/2/2026 UniLodge Australia Pty Ltd Samty Holdings Co Ltd Real Estate - 600.0
12/31/2025 Easy Auto 123 Pty Ltd Mitsubishi Corp Retail & Consumer 20.0 70.0

Japan's Outbound Investment by Destination

  • In 2025, the United States remained the top destination for Japanese overseas direct investment atUS$51.7 billion. The Netherlands (US$15.6 billion) and Australia (US$11.4 billion) followed among the destinations shown, with total overseas direct investment reaching US$186.1 billion.​

  • As of 2025, Finance & Insurance, Transportation equipment and Iron, non-ferrous and metals were the top three industries highlighted for Japanese overseas direct investment, totalling US$81.6 billion, or 43.8% of total overseas direct investment.​

  • Japan's outward FDI flow totaled US$186.1 billion in 2025, down 8.9% from 2024, while outward FDI stockrose 8.7% to US$2.3 trillion. This suggests that despite a moderation in annual outward flows, Japan'soverseas capital base remains substantial.​

  • Japanese companies are shifting away from an export-driven model toward localisation through direct investment — as seen in Nippon Steel's acquisition of US Steel — leveraging FDI to navigate tariffs and protectionist measures while prioritising strategic, sustainable growth ahead of mere market expansion.​

    • Japan’s cross-border M&A accelerated sharply in 2025, with record outbound activity, and that the US re-emerged as a favoured destination. This momentum is expected to support dealmaking into 2026.​
    • Japanese companies continue to pursue cross-border acquisitions to address domestic market contraction, labour shortages and the need for new sources of growth. Alongside domestic consolidation, this activity reflects mounting demographic pressures and a strategic focus on opportunities in higher-growth international markets.​
    • Geopolitical tensions and supply-chain realignments are generating both challenges and opportunities for Japanese outbound M&A in 2026, as economic uncertainty reshapes global capital flows. Faced with a saturated domestic market, shifting geopolitical dynamics, and evolving supply chains, Japanese companies are increasingly driven to pursue cross-border acquisitions.​

Key Statistics (2025)

US$186.1​ billion​
Overseas direct investment

US$46.1​ billion​​
Finance & Insurance

US$18.0​ billion​
Transportation equipment​

US$17.5 ​billion​
Iron, non-ferrous and metals​

Japan's Inbound Investment in Australia

Key Highlights

  • Number of Deals: From 2014 to 2026 YTD, there were a total of 308 closed Japanese inbound transactions. Deal activity rose steadily from 2014, reaching a peak in 2016 with 33 transactions. Activity remained strong until a pandemic-driven dip in 2020, with 13 deals, but recovered from 2021 onwards. In recent years (2022–2026), deals have stabilised at 11–34 transactions annually, reflecting sustained and consistent Japanese investment interest in Australia. 
  • Investment Value: Japanese inbound M&A deal values in Australia have shown volatility, with standout years like 2015 (A$12.3 billion) and 2019 (A$24.2 billion) driven by major transactions, including Asahi Group's A$16 billion acquisition of CUB Pty Ltd, Nippon Paint Holdings' A$4.3 billion acquisition of Dulux Group, and Japan Post's A$8.9 billion acquisition of Toll Holdings in 2015. In recent years like 2023 and 2024 showed recovery with deal values of approximately A$6.9 billion and A$6.7 billion respectively.​
  • Investment Rank: In 2024, Japan ranked as Australia’s fourth-largest foreign investor overall, with total investments of A$282.9 billion (including direct, portfolio and other types). Japan was the second- largest source of direct foreign investment, contributing A$159.5 billion, around 12.5% of Australia's total direct foreign investment.​
  • Key Sectors: Japanese M&A investments in Australia are heavily skewed towards industrials, EUR, and TMT, accounting for nearly 53% of deal activity. Japanese investment in Australia spans renewables, critical minerals, build-to-rent housing, financial services, infrastructure, ICT, and agribusiness. The JAEPA agreement has strengthened this diverse investment, driving employment growth in Australia, including in regional areas.
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Major Deals by Sectors

Tech, Media & Telecom
[New closed deals]

Tech, Media & Telecom sector completed deals

In the TMT sector in Australia, there were 47 M&A deals with investment from Japan in the pastdecade. Some of the most recent and significant transactions have been included below.​

Nippon Koei Co Ltd

NEC Corp

Morse Micro Pty Ltd

SoftBank Robotics Singapore

Lifull Connect Group

Mixi Inc

M3 Inc

Mitsubishi Electric Mobility Corp

FUJIFILM MicroChannel

Fujifilm Business Innovation

MegaChips Corp

Fujitsu

Nomura Research Institute (NRI)

Fuji Xerox Co., Ltd

Trend Micro

SoftBank Corp

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Industrials & Logistics
[New closed deals]

Industrials & Logistics sector completed deals

There were 110 inbound investments from Japan in the Industrial sector in the last decade. Some of the most recent and significant transactions have been included below.​

Daikin Industries Ltd

KPP Group Holdings Co Ltd

Horiba Ltd

Panasonic Holdings Corp

Nikken Corporation

Yamato Kogyo Co Ltd

Toho Gas Co Ltd

UGL Rail Pty Ltd

Incubate Fund Co Ltd

Santec LIS Corp

KPP Group Holdings Co Ltd

ENEOS Xplora, Mitsubishi Gas Chemical, and Toyota Motor Corporation

Hankyu Hanshin Express Co., Ltd.

Yanmar Holdings Co Ltd

Nabtesco Corp

Nippon Sanso Holdings

Kyokuto Kaihatsu Kogyo Co., Ltd

Japan Post Holdings Co Ltd

Optimus Group

Optimus Group

Nippon Paper Industries

Nippon Paint Holdings Co., Ltd

Daiwa House Industry Co., Ltd

Persol Holdings Co., Ltd

Hitachi Construction Machinery Co., Ltd

Japan Post Co,, Ltd

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Retail & Consumer
[New closed deals]

Retail & Consumer sector completed deals

In the Retail & Consumer sector in Australia, there were 40 M&A deals with investment from Japan in the past decade. Some of the most recent and significant transactions have been included below.​

Asahi Shokuhin Co. Ltd

Genki Global Dining Concepts Corp

Toyota Tsusho Corp

Lion Corporation

Mitsubishi Corporation

Optimus Group

Colowide Co Ltd

Optimus Group Co Ltd,

Cosmic Eagle Ltd

7-Eleven International

Kao Corp

Kirin Holdings

UCC Holdings

Asahi Group Holdings

Nisshin Flour Milling Inc

IDOM Inc

Prince Hotels, Inc

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Financial Services

Financial sector completed deals

In the Financial Services sector in Australia, there were 25 M&A deals with investments from Japan in the past decade. Some of the most recent and significant transactions have been included below.​

Tokyo Century Corporation

Dai-ichi Life Holdings

Nomura Research Institute

Sojitz Corporation

Nippon Life Insurance Co

Mitsubishi Motors Corp

Mitsubishi UFJ Trust and Banking Corporation

Nomura Holdings

Nomura Holdings Inc

Shinsei Bank Ltd

Mitsubishi UFJ Trust and Banking

TAL Services Limited

MS&AD Insurance Group Holdings Inc

Sony Life Insurance Co., Ltd.

Rakuten Securities, Inc

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Healthcare

Healthcare sector completed deals

In the Healthcare sector in Australia, there were 14 M&A deals with investments from Japan in the past decade. Some of the most recent and significant transactions have been included below.​

Astec Co., Ltd

Kanematsu Corp of Japan

Otsuka Pharmaceutical Co Ltd

M3 Inc

Otsuka Pharmaceutical

AGC Inc of Japan

Eisai Co Ltd of Japan

I'rom Group Co., Ltd.

I'rom Group Co., Ltd

Fujifilm Corp

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Energy, Utilities & Resources
[New closed deals]

Energy, Utilities & Resources sector completed deals

In the Energy, Utilities and Resources sector in Australia, there were 48 M&A deals with investment from Japan in the past decade. Some of the most recent and significant transactions have been included below.​

Sojitz Corporation

Mitsubishi UFJ Financial Group Inc

Marubeni Corporation

Idemitsu Kosan Co Ltd

Mitsubishi UFJ Financial Group, Inc

Nippon Steel Corporation

Electric Power Development Co., Ltd

JERA Co., Inc

LNG Japan Corp

INPEX Corp

JERA Co., Inc

INPEX Corporation

Mitsui & Co. Ltd

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Real Estate
[New closed deals]

Real Estate sector completed deals​

In the Real Estate sector in Australia, there were 14 M&A deals with investments from Japan in the past decade. Some of the most recent and significant transactions have been included below.​

Samty Holdings Co Ltd

Samty Holdings Co Ltd

Investa Management Pty Ltd

Mitsui OSK Lines Ltd

Sojitz Corporation

Starzen Company Limited

Mitsui Fudosan

Sekisui House Ltd

Egw Asset Management Inc.,

Nippon Telegraph

United Urban Investment Corporation

Daiwa Living Management Co., Ltd and Cosmos Initia Co., Ltd.

PA Realty of Japan

Sekisui House, Ltd

Sekisui House Ltd

Sekisui House Ltd

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Key Investment Sectors

Industrials & Logistics Sector

  • From 2014 to 2026, Japanese investors completed 113 M&A deals in Australia’s Industrials sector, with a total deal value of A$21.1 billion. The activity peaked in 2015 with 10 deals valued at A$9.4billion, driven by high-value transactions. Another not able year was 2019, with 11 deals worth A$6.5billion. While deal volume remained consistent, deal values fluctuated, indicating variability in transaction sizes.

  • Major Japanese investors such as Nippon Paper Industries, Persol Holdings Co., Ltd, Nippon Paint Holdings, and Japan Post have acquired Australian industrial assets to boost their market presence, strengthen sector leadership, and achieve operational synergies.
  • The Japanese deals show a focus on geographic expansion, enhancing product offerings, and leveraging established local businesses across sectors like refrigeration, construction, rail, energy, and technology.

Tech, Media & Telecom Sector

  • Japanese inbound M&A transactions in Australia’s TMT sector have fluctuated over the years, with 49 transactions totalling A$2.3 billion. The strongest dealvalue was recorded in 2016 at A$692.5m, followed by 2025 at A$439.6m and 2022 at A$431.3m. Deal activity peaked in 2022 with 10 transactions, while 2019 also saw strong volume with 8 deals, indicating continued but uneven Japanese investment interestin Australia’s TMT sector.​
  • The TMT sector grew in 2026, driven by enhanced bilateral technology collaboration between Australia and Japan across AI, data centres, quantum computing, telecommunications, cybersecurity, and digital ecosystems.​

Key Enablers and Linkages

Trade Relations

In 2023, Japan was Australia’s second-largest trading partner, with goods trade totaling A$120.6 billion. It was the third-largest source of imports, worth A$30.5 billion, including passenger vehicles, goods vehicles, refined petroleum, and civil engineering equipment. Bilateral services trade reached A$6.6 billion, with Australia exporting A$2.9 billion and importing A$4.3 billion.

The Japan-Australia Economic Partnership Agreement (JAEPA)

The Japan-Australia Economic Partnership Agreement (JAEPA), effective from January 15, 2015, has boosted market access for Australian exporters and strengthened investment protections. It is one of Australia’s most-utilised trade agreements, encouraging Japanese investment by raising the screening threshold for non-sensitive sectors to A$1.1 billion.

Australia-Japan Strategic Cyber Partnership​

Australia and Japan strengthened bilateral economic security cooperation in May 2026, alongside new commitments covering critical minerals, energy security and cyber resilience. These initiatives support more resilient supply chains and deeper cooperation in strategically important sectors, providing a stronger framework for future Japanese investment in Australia.​

Australia-Japan Innovation Fund (AJIF) Research Grant Program 2024-25

It aims to boost Japanese investment in Australia by fostering innovative bilateral collaborations in science, technology, and innovation. The program encourages partnerships between academic institutions, industry, and government in both countries, promoting high-quality research and transformative projects. Grants range from A$0.1 to A$0.5 million per project.

Potential Headwinds and Tailwinds

Headwinds

Australia must address global capital competition by prioritising policy consistency and coherence to attract long-term investments. Japanese companies have expressed concerns about complex project approvals due to the interplay between federal and state laws, affecting sectors like energy and Industrials & Logistics. Environmental legal challenges, such as those involving Santos and Woodside's LNG projects, have heightened apprehensions. Additionally, there is unease about courts factoring in social policies instead of strictly interpreting the law.

One challenge facing Japanese mergers and acquisitions (M&A), as well as Japan's global interests, is the weakened yen, which has hit a 34-year low. While the depreciation of the yen has resulted in increased earnings in local currency from existing overseas subsidiaries for Japanese companies, it has also made new acquisitions more costly. Over the past 15 years, Japan's GDP per capita in yen has been gradually increasing, but when measured in US dollars, it has been declining recently due to the yen's depreciation. Both the US dollar and the Australian dollar remain significantly stronger against the yen.

Amid rising geopolitical tensions, such as the Israeli-Palestinian conflict and the Russian invasion of Ukraine, Japanese investment in Australia plays a significant role. The strategic rivalry between China and the US complicates the regional landscape, with the US serving as an ally while China remains the largest trading partner for both Australia and Japan. These geopolitical factors may pose challenges for Japanese investment in Australia by adding risks and complexities to economic and diplomatic relations in the future.

Tailwinds

Australia and Japan have maintained a robust economic relationship since the 1957 Australia-Japan Commerce Agreement, which relies significantly on Japanese investment to support the export of commodities from Australia to Japan, particularly in the agricultural, mining, and resources sectors. Japan continues to be Australia’s second-largest trading partner and export destination with recent years experiencing greater collaboration. The 2014 JAEPA enhanced Japan's investment climate in Australia, boosting economic cooperation as Chinese investment declined.

Amid declining population and domestic consumption, Japanese companies are seeking growth abroad, targeting Australia due to its stable environment and tax incentives. With substantial cash reserves and low-interest financing, they are well-positioned for acquisitions. Australia's recent foreign investment reforms, announced in May 2024, aim to streamline and enhance the investment process, making it more efficient and transparent. Despite challenges like productivity issues and slowing growth, Australia continues to attract Japanese investment, supported by its robust economy, high GDP per capita, and strong legal frameworks adhering to ESG standards.

With energy self-sufficiency of only 12.6%, Japan’s economic prosperity relies on reliable and affordable supplies of energy. Australia is the largest and most dependable energy supplier to Japan, meeting more than a third of the country's energy requirements. New energy collaborations between Japan and Australia are at an all-time high, focusing on technology and logistics. With hydrogen and ammonia technologies uncertain, Japanese firms are investing in multiple Australian projects. Government grants and funding from both countries support these efforts.

2025 - Japan–Australia CCS ValueChain Feasibility MOU​

Sumitomo, Toho Gas, "K" LINE, and Woodside signed an MoU to study the feasibility of a Japan–Australia CCS value chain. The project aims to capture CO₂ in Japan, transport it to Australia, and store it underground, supporting both countries' decarbonization goals.​

2025 - Australia–Japan Space MoU​

Inovor Technologies and Star Signal Solutions signed an MOU in Tokyo to enhance Australia-Japan space industry collaborations by leveraging synergies in space situational awareness and satellite communications, aiming to boost strategic ties and address space sustainability in the Indo-Pacific.​

2025 - JBIC Signs Strategic MOU with Queensland​

The Japan Bank for International Cooperation (JBIC) signed an MOU with the Queensland Government to strengthen cooperation and promote Japanese investments in sectors including critical minerals, renewable energy, and infrastructure. This partnership supports both countries' goals of carbon neutrality by 2050 and aligns with the broader Japan-Australia Special Strategic Partnership.​

2025 - US, Australia and Japan signtrilateral naval logistics agreement

The three nations have formalised apact to boost maritime logistics interoperability, enabling mutual support for missile reloading and refueling. The agreement strengthens existing partnerships and enhances informationand technology sharing.

2024 - Northern Territory and JOCMEC MoUs

The Northern Territory Government has signed two MoUs with JapanOrganisation for Metals and EnergySecruity (JOGMEC) to enhance collaboration in energy sectors like natural gas, carbon capture, hydrogen, and critical minerals supply chains, strengthening economic ties valued at $7.7 billion. These agreements emphasise the Territory's strategic role in the global transition to renewable energy and critical minerals.

2024 - The Australian Hydrogen Council signs MoU with JETRO

The Australian Hydrogen Council and Japan External Trade Organisation (JETRO) have signed a Memorandum of Cooperation to enhance trade ties and advance hydrogen initiatives between Australia and Japan through joint committees, webinars, information exchange, and collaboration on hydrogen policies and technologies.

2024 - Australian Olympic Committee and Japanese Olympic Committee sign new Cooperation Agreement

The MoU between the Australian and Japanese Olympic Committees aims to enhance collaboration in Olympic sport development, anti-doping, health initiatives, and training exchanges, strengthening ties ahead of the Brisbane 2032 Olympic Games.

2024 - Australia and Japan sign research agreement for undersea warfare  

Australia and Japan signed an MoU to enhance undersea warfare capabilities through robotic and autonomous systems, starting with a project on undersea communication. This collaboration is part of their broader Defence partnership under the Special Strategic Partnership and updated security cooperation agreement.

2024 - JBIC signs MoU with Northern Territory of Australia

JBIC signed an MoU with the Northern Territory Government of Australia to strengthen cooperation in areas like critical minerals, renewable energy, and decarbonization. The partnership aims to promote Japanese investments and business opportunities, supporting both countries' goals of achieving carbon neutrality by 2050.

2023 - JBIC signs MoU with the Clean Energy Finance Corporation of Australia

The Western Australia Governmentand Japan Bank for International Cooperation (JBIC) have signed a new MoU to promote decarbonisation and low-emission technologies, focusing on hydrogen, ammonia, and emerging industries. The collaboration aims to secure JBIC's financial support for new energy projects, continuing their partnership from 2011.

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