What a year, what a month and what a week it's been for Japan for once again capturing the world’s attention in all the best ways… And I’m not talking about the confirmation this week of its first ever female prime minister, or even that its stock market surged to a new record high, but how its two-way baseball sensation, Shohei Ohtani, this week achieved what is widely being touted as the greatest individual performance ever in the sport (and for many excited fans, in all sports!) – simultaneously blasting 3 homers as a batter, and 10 strikeouts as a pitcher – to win the MLB’s NL championship for the LA Dodgers and send them into the World Series against the Toronto Blue Jays (starting this Friday evening (US time)/Saturday morning (Japan time). That series and that performance, above all else, will mean that most of the North America will be fixated on Japan’s greatest living export – its absolute best, embodied in human form - for the rest of this month (at least).
Moreover, what baseball is to the North America, soccer is to South America, and there too Japan has exploded into the collective mindshare only 3 days earlier than Ohtani’s big day, with the Japan national men's squad beating powerhouse Brazil (3–2) in Tokyo. While these sporting performances have grabbed the world’s attention for Japan, I cite them as examples of the much wider phenomenon, which is that the awareness of Japan’s unique brand among global audiences has, arguably, never been higher – or more accessible.
In this of course, the recent explosion of tourism to Japan has been one of the greatest tailwinds in raising global awareness of Japan. After a record 36.9 million visitors in 2024, inbound tourism in 2025 is so far on track to be well over 40 million for the first time ever; that is more than double the amount of 2015 (19.7 million) and more than quadruple that of 2010 (8.6 million). And since COVID, the growth is not only from Asia; arrivals from the North America, Europe and Australia also set records this year. (The growth in my fellow Australians visiting Japan has been incredible, with almost a million Aussies visiting in 2024 – up 50% YoY! – giving Japan the unfortunate sobriquet as Australians' next Bali, but underscoring how much awareness of and familiarity in Japan has exploded.)
Technology too has also helped massively, with AI (LLMs) now making accessible and even familiar what was once intimidatingly opaque - the Japanese language. Japan’s brand of exotic but untouchable mysteriousness is now being replaced with the enticingly and deliciously familiar – and the world is buying it. Tokyo ranks at or near the top of “trending destination” lists, and Japanese has emerged as one of the most-studied languages among non-Japanese learners.
So now, when news is announced globally that Japan has its first female prime minister – or that its stock market has hit record highs – vastly more foreigners now take note. Familiarity breeds not contempt, but recognition and understanding. And increasingly, a desire to get involved in Japan’s story – to be invested in it.
This is evident in the data. Inward FDI in Japan has rebounded in 2025; greenfield announcements hit all-time highs last year, especially in semiconductors and data centres. Private equity participation has expanded - more managers on the ground, larger Japan-focused funds, and a rising share of Asia-Pacific deal value occurring in Japan. Portfolio flows show foreigners were persistent net buyers through the middle of the year, and brokers report increased international demand for hedged and unhedged Japan equity exposure.
But while foreign interest and accessibility have sharply risen to arguably never-before-seen levels, getting invested in Japan remains difficult. While rising, Japan’s inward FDI stock as a share of GDP remains low by OECD standards. There are structural reasons: administrative friction, cross-holdings that limit float, sectoral licensing, and limited scale in some private markets compared with the U.S. or Europe. Corporate reform is real (and increasingly reflected in valuation), but deal origination, governance negotiation, and post-acquisition execution still favor, and thus demand, local presence and know-how.
For international investors, that creates a practical constraint. It is now easy to experience Japan (tourism), easy to follow Japan (media, sports), and easier to model Japan (data and disclosures in English). But turning enthusiasm into sizeable, diversified exposure is still limited to only a narrow funnel of channels:
These are starting points for investment into Japan, but are blunt. Genuine insight and opportunity in Japan still depends on being on the ground - building local networks, understanding corporate culture, and accessing mid-market and unlisted opportunities that remain largely invisible from abroad. That kind of proximity is hard for most foreign allocators to replicate yet, which is why early entrants enjoy such an advantage.
As discussed in earlier notes, regulators (like the FSA, METI etc) and financial authorities (like the TSE) are trying to break down these remaining barriers – as has been on show this week with the impressive “Japan Weeks (20-24 October)” series of financial industry conferences, seminars and networking events. But at the same time, these efforts also underscore just how much room is left to improve; how much more the gap between “foreign” and “local” knowledge here has left to narrow. But for all the reasons laid out above, the pace of that narrowing is quickening – and that in itself is helping drive the rally (in a virtuous cycle).
For those increasing number of foreign investors who are now interested in Japan, the above is just to say that the window is open but not yet crowded. Accessibility may still seem limited, but that’s exactly why early exposure matters. As new funds, managers, and regulatory frameworks expand the on-ramps, capital will flow more easily and valuations will adjust accordingly. The advantage lies with those who position now - building on-the-ground presence, partnerships, and insight - before Japan’s rediscovery becomes consensus. Japan’s moment in the spotlight may be now, but its investable future is still forming. Foreigner investors who get in on the ground, early, will be the ones best placed when the doors finally open wide. Go Ohtani!!
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