Japanese Economy Offers Investors a Source of Global Diversity.

Business/Government/Assignment Editors

NEW YORK--(BUSINESS WIRE)--July 29, 2002

The Japan External Trade Organization  New York (JETRO NY) released a newsletter today concerning the current investment environment in Japan.

It can be viewed at: http://www.jetro.org/newyork/focusnewsletter/focus19.html.

-- Japan Maintains Progress in Achieving Comprehensive Economic

Reform

The Japanese government adopted a comprehensive reform program in 1996. This ongoing initiative is helping to enhance corporate competitiveness, promote small and medium enterprises, utilize information technology, increase the flexibility of Japanese labor markets and reduce the high cost of doing business in Japan.

One major success over the past year includes a significant reform of Japan's Commercial Code. Changes include more transparent accounting, additional liberalization of stock options, increased labor mobility and improved real estate liquidity.

-- Japan Perceived as Source of Potential Growth in the Face of

Market Turmoil

Japan is the world's second largest economy - possessing a GDP about half as large as the U.S. or Europe - and more than four times the size of China. With a per capita income larger than the U.S. and major European nations, Japan constitutes one of the world's most affluent and sophisticated consumer and industrial markets.

FDI inflows have increased significantly with transactions rising from (yen)598 billion in 1997 to (yen)3,283 billion yen in 2000 - an increase of over 500%. M&A transactions have also grown substantially and entrepreneurship is on the rise.

-- Japan Offers Safe Haven and Upside Potential to Investors

While Japan has far to go in delivering on reforms measures enacted in recent years, investors have begun to realize the stage is being set for an increased valuation of Japanese assets. Real estate and equity prices remain at twenty-year lows. Cross shareholdings and other holdings by Japanese banks are declining, allowing more supply for foreign investors.

-- FDI is Beginning to Change the Business Dynamic in Japan

Only a few years ago foreigners considered Japan to be a relatively closed market. They found it difficult to establish themselves in an environment that emphasized a lifetime career path with a few select Japanese government or corporate entities.

Over the past few years a rising number of foreign companies - entering Japan through greenfield or M&A investments - have begun to radically change the way that business is conducted in Japan.

Firms such as Starbucks, Toys-R-Us, Walmart and Costco are changing Japanese retailing. Citibank and other U.S. financial institutions as well as foreign-owned Shinsei Bank and Kansai Sawayaka Bank have introduced major innovations in financial services. Equally notable is the success of Carlos Ghosn at Nissan, who one Japanese government official has described as a "Japanese national hero".

-- Japan Hopes to Accelerate the Involvement of Foreign Investors

For more than 50 years, Japan maintained its own employment and financial systems. Today, in recognition of the need to speak a common language with trading and investment partners, these systems are changing. U.S. investors will find a welcoming environment and source of future growth that is perhaps unmatched in the world.

This material is published and disseminated by JETRO New York, in coordination with KWR International, Inc., New York, NY 10023, Tel: [phone], Fax: [phone], E-mail: [e-mail]. JETRO New York is registered as an agent of the Japan External Trade Organization, Tokyo, Japan and KWR International, Inc. is registered on behalf of JETRO New York. This material is filed with the Department of Justice where the required registration statement is available for public viewing.