, Shinzo Abe, Japan’s prime minister, pleaded to the New York Stock Exchange in 2013. As he lowered the drawbridge to foreign investors, that pitch seemed to work. Today overseas owners hold 30% of Japan’sindex of stocks and account for about 70% of the daily turnover on the Tokyo Stock Exchange . But new rules threaten to reverse these trends.
But concerns linger. One is the law’s broad scope. In addition to nuclear power and aeronautics, its purview includes agriculture, transport, shipping, software and internet services. Nor is it clear what counts as infringement. Would a letter from a foreign investor to the board of a Japanese firm, say, be considered an attempt to influence management? The upshot is that investing becomes more convoluted and time-consuming.
Activists have long fought for Japanese companies to sell non-core assets and stop hoarding cash. In recent years they have clashed with some of the nation’s corporate giants. They have been leaning on Nissan to sack its managers and draw a line under the era of Carlos Ghosn, the carmaker’s former boss. Earlier in the year a New York investment fund tried to force Kyushu Railway, a regional transport firm, to boost stingy returns to shareholders.