Bridging Continents: Inbound Investment from Japan to Australia

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  • Report
  • 10 minute read
  • April 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

298

Closed deals (2014-2026 YTD)

36.9%

Investment in Industrials & Logistics

4th

Foreign investment ranking (ABS, 2024)*

* Includes direct, portfolio and other types of investment.
New closed deals
Closed Target Buyer Sector % Value (A$m)
1/20/2026 PNB Consolidated Lion Corp Retail & Consumer 100 Undisclosed
1/20/2026 UGL Rail Sojitz Corp Industrials 50 500
2/2/2026 MCT Automotive Group Toyota Tsusho Corp; Toyota Tsusho (Australasia) Retail & Consumer 100 Undisclosed
2/19/2026 Allstate Refrigeration Services Panasonic Holdings Corp; Hussmann Australia Industrials 100 Undisclosed
9/3/2025 Investa Management West Japan Railway Co and SOTETSU REAL ESTATE Real Estate - Undisclosed
11/26/2025 Next Green Group Sojitz Corp EUR - Undisclosed
11/29/2025 MOG Laboratories Santec LIS Industrials 100 Undisclosed
12/16/2025 YES Group SA Toho Gas Co Ltd; Toho Gas Arise Investment Industrials - Undisclosed
12/17/2025 Salix Products Yamato Kogyo Co. Industrials 50 Undisclosed
12/24/2025 Chadwick Forklifts Nikken Corp Industrials 100 Undisclosed

Japan's Outbound Investment by Destination

  • In 2024, the United States emerged as the top destination for Japanese companies, attracting overseas investments worth US$84.7 billion. The United Kingdom followed with US$17.2 billion in investments, while Australia secured US$13.9 billion. Overall, Japanese outbound investments in 2024 totalled US$211 billion, marking a 14.6% increase compared to US$184 billion in 2023.
  • As of the end of 2024, Finance & Insurance, Wholesale & Retail and Communications ranked as the top three industries for Japanese investment abroad, collectively comprising 58.7% of total direct overseas investment.
  • Japan's overseas investments are spearheaded by major corporations, financial institutions, and trading houses. This growth is strongly supported by government agencies such as METI (Ministry of Economy,Trade and Industry) and JETRO (Japan External Trade Organisation), along with multilateral and bilateral trade agreements, which facilitate expansion into critical global markets.
  • Japanese companies are increasing Foreign Direct Investment (FDI) to access new markets, advanced technologies, and cost-effective production, while geographic diversification boosts global competitiveness and supports long-term growth.
    • The shift highlights growing interest in Southeast Asia, particularly in Indonesia, Thailand, and Vietnam, as these markets present emerging opportunities compared to the mature European and US markets traditionally preferred by Japanese investors.

Key Statistics (2024)

US$211 billion
Overseas direct investment

US$60.0 billion​
Finance & Insurance

US$29.9 billion
Wholesale & Retail

US$19.9 billion
Communications

Japan's Inbound Investment in Australia

Key Highlights

  • Number of Deals: From 2014 to 2026 YTD, there were a total of 298 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 (2022–2025), deals have stabilised at 26–34 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 69% 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

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.​

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.​

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.​

Toyota Tsusho Corp

Lion 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.​

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.​

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 YTD, Japanese investorscompleted 110 M&A deals in Australia’s Industrialssector, with a total deal value of A$21.1 billion. Theactivity peaked in 2015 with 10 deals valued at A$9.4billion, driven by high-value transactions. Anothernotable year was 2019, with 11 deals worth A$6.5billion. While deal volume remained consistent, dealvalues fluctuated, indicating variability in transactionsizes.

  • 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 geographicexpansion, enhancing product offerings, andleveraging established local businesses acrosssectors like refrigeration, construction, rail, energy,and technology.

Energy, Utilities & Resources Sector

  • Japanese inbound M&A transactions in Australia's EUR sector show a fluctuating but significant investment trend over the years. The highest deal values were recorded in 2018 (A$4.2 billion) and 2024 (A$5.1 billion). The total deal value of A$12.2 billion across 48 transactions indicates a strong, consistent interest, with a notable resurgence in 2023 and 2024.​
  • Japanese investment has been crucial in developing Australia’s export industries, particularly coal, iron ore, and LNG production. The Japanese-led Ichthys project, located off Western Australia's coast, has played a key role in expanding LNG production and is one of the largest investments by a Japanese company outside Japan.

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.

2022 Joint Declaration on Security Cooperation

The Australia-Japan Joint Declaration on Security Cooperation has fostered a more stable and secure environment, encouraging Japanese investment in Australia. Strengthened economic and strategic ties, particularly in defence, infrastructure, and technology sectors, have contributed to increased Japanese business interest and investment.

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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