‘Abenomics’ – Japanese Prime Minister Shinzo Abe’s grand strategy to revive the country’s economy through a combination of monetary easing, fiscal stimulus, and structural reforms – continues to dominate the Japanese market, with mixed results. The yen’s depreciation relative to the US dollar may have increased exports, but rising import levels have outstripped any gains made, leading to the country reporting its widest trade deficit in January 2014. These currency fluctuations have also made it difficult to close deals. Furthermore, Japan’s idiosyncratic labour laws place considerable power in the hands of employees, and can lead to uncertainty for foreign investors.
On the other hand, some firms report an increase in interest from foreign investors, particularly in the real estate sector – and the weaker yen also means there are plenty of Japanese companies with non-core businesses to sell. The J-REIT market is also displaying robust signs of popularity. The exchange rate stabilised in the latter half of 2014, and there is a widespread expectation that this will make it easier to close transactions. In another boon, feed-in tariffs and other incentives are accelerating investment in renewable technologies in the wake of 2011’s Fukushima disaster, though many commentators expect nuclear to play an increasing role over the coming years.
With expected work related to The 2020 Summer Olympics slow to materialise, Japanese companies are looking outbound, and the Big Four domestic firms are tending to follow them out of the jurisdiction. Anderson Mori & Tomotsune recently opened in Singapore and Shanghai; Mori Hamada & Matsumoto established a base in Myanmar; Nagashima Ohno & Tsunematsu recently arrived in Vietnam and also expanded its Singapore office; and Nishimura & Asahi has established a foothold in Singapore and Bangkok.
Foreign firms continue to pursue individual business models, ranging from New York oriented firms maintaining an office in the jurisdiction in order to conduct high-end M&A, capital markets, and securitisation work, to firms maintaing a projects focus. It is worth noting that some firms have large numbers of bengoshi and that others have none at all: Baker & McKenzie (Gaikokuho Joint Enterprise), Bingham McCutchen Murase, Sakai Mimura Aizawa – Foreign Law Joint Enterprise, Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo, Morrison & Foerster Ito & Mitomi, and White & Case LLP – White & Case Law Offices (Registered Association) are particularly noted for bengoshi strength.