Australia’s appeal as an investment destination for Japanese companies and government institutions has reached new heights. In 2024, a record 72 mergers and acquisitions (M&A) transactions and 55 partnerships were executed, marking the third consecutive year of increased activity involving Japanese firms, according to Herbert Smith Freehills’ Japan-Australia Investment Report 2024. The report indicates that Japanese investors remain confident in Australia’s economic future and Japan’s role in its development. Herbert Smith Freehills is a global law firm with offices in Australia, Japan and worldwide and is consistently ranked number one in M&A.
Japanese foreign direct investment (FDI) into Australia reached a record $141.1 billion, representing almost 12% of all FDI into Australia. Japan now ranks third in terms of cumulative FDI into Australia and has increased its FDI into Australia every year for the past 11 years. Two-way trade between Australia and Japan was valued at $113.4 billion in 2024, making Japan Australia’s second-largest trading partner and second-largest export destination at $80.5 billion.
Investment from Japanese companies in Australia has diversified across multiple sectors. Traditionally focused on mining, energy, and agriculture, Japanese investment has expanded into real estate, life insurance, and financial services. Newer sectors such as sustainable aviation fuel, transport and logistics, data centres, pension and share administration services, food technology, AI, and enterprise IT services are also experiencing growth. Simultaneously, trade missions from Queensland and Western Australia are seeking further collaboration with Japan on clean energy and other sectors, highlighting the strength of the relationship.
