Questions continue over Japanese Prime Minister Shinzo Abe’s financial plan (known as ‘Abenomics’) following the introduction of negative interest rates in 2016, with efforts to weaken the yen and increase spending producing debatable results. Japanese businesses are thus still focused on outbound work, with outbound M&A continuing to dominate for domestic and international firms, particularly in matters involving Southeast Asia, Africa and the Middle East.
Overseas antitrust authorities continue to take an interest in Japanese companies, and are particularly active in conducting cartel and price-fixing investigations into vehicle parts businesses. Domestic and foreign firms also act for cash-rich Japanese companies in obtaining merger clearance of their global acquisitions.
The hospitality sector received an influx of investment from hoteliers, which looked to benefit from the government’s plan to bring in 40 million tourists annually before the 2020 Olympics. Prospects for the shipping industry are bleak, with the recent bankruptcy of Daiichi Chuo Kisen Kaisha increasing the risk of companies exiting the market.
A couple of notable laws came into effect, including an April 2016 amendment to the Patent Act which stipulates that the right to an employee invention belongs to the employer unless stated otherwise. At the beginning of 2016, changes were made to the Unfair Competition Prevention Act aimed at enhancing trade secret protection – in particular the introduction of criminal penalties for misappropriation following high-profile cases brought by Nippon Steel & Sumitomo Metal, SanDisk and Toshiba.
In September 2015, an amendment to the Worker Dispatch Act made it mandatory for staffing companies to obtain licences to use dispatch workers for a term of three years, which can be extended for a further three years subject to employee consent. No limit is placed on how many times a company can renew the placement, but businesses must help to secure employment opportunities for employees who are finishing their term.
The international commodity price drop has significantly affected the Japanese LNG market, although the recent focus by the government on renewable energy sources is generating work. Nuclear energy remains dormant following the 2011 Fukushima disaster, and the boom in solar projects is likely to be impacted by the 2016 changes to the renewable energy feed-in tariff, but other sources of renewable energy are increasing in prominence. Wind power and biomass are key focuses for firms.
Due to the language barrier, the division between domestic and international firms continues, and the domestic market as a whole continues to be relatively closed.
Due to the nature of the market, the international firms also remain largely unchanged, although several new players have entered the market. Recent market entrant King & Spalding Gaikokuho Jimu Bengoshi Jimusho now has a strong foothold, and Ashurst and Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo have both seen substantial growth.
Firms in the spotlight
Iwata Godo is one of Japan’s premier and oldest law firms. It was established in 1902 as one of the first business law firms by Chuzo Iwata, an attorney-at-law who subsequently held various positions, including serving as Minister of Justice and president of the Japan Federation of Bar Associations. It is a full-service firm and each of its practice areas is highly regarded. Its goal is not to be the largest law firm but to be the firm of choice for clients with respect to their most challenging legal issues, transactions and disputes.