The AJBCC hosted a deep-dive webinar into the ninth annual Japan-Australia Investment Report, themed “Partners in Economic Security” by Herbert Smith Freehills Kramer and the Australian National University.
This year’s report highlights a relationship that has evolved beyond mere trade into a mature strategic partnership shaped by energy security and geopolitical resilience.
Key takeaways:
- Record investment activity: For the fourth consecutive year, Japanese investment transactions reached a record high with 77 M&A deals and 53 partnerships announced.
- Deepening ties: Japan is now the second-largest investor in Australia by stock, with foreign direct investment (FDI) reaching nearly $160 billion—an 11% increase year-on-year.
- Economic security as a driver: Investment is increasingly aligned with national security and supply chain resilience, particularly in critical minerals and the energy transition. Geopolitical uncertainty is reinforcing Australia’s appeal.
- Emerging sectors: While resources remain the core, there is significant growth in real estate (the top sector by deal count) and financial services, where Japanese mega-banks and insurers are filling gaps left by domestic institutions.
- Energy ties underpin the relationship: Australia supplies over one third of Japan’s energy needs and is central to Japan’s strategy for safety, energy security, economic efficiency, and environmental sustainability.
The Future of the Relationship
Speakers noted that while headwinds like regulatory complexity and high labour costs exist, the fundamental drivers of complementarity, proximity, stable governance, and population growth continue to attract Japanese investment. The upcoming 50th anniversary of the Nara Treaty and the 70th anniversary of the Commerce Treaty offer pivotal moments to further strengthen these “connected pillars” of cooperation.
Missed the live session? Catch the full insights from Ian Williams, Prof. Shiro Armstrong, and Damien Roberts here: