Japan plans to introduce a new liberalisation policy to ease stock market regulations. Japan’s liberalised stock market regulations are expected to make the country’s stock markets more attractive to foreign investors.
Foreign hedge funds and wealth asset managers will largely benefit from the new exemptions introduced to Japan stock market regulations.
Last November, the Parliament passed a small revision to the law on foreign investments. Previously, the law imposed tighter regulations on foreign investment in sectors impacting national security. This reflects Japan’s growing concerns over China’s potential to access confidential technology.
The restrictions were imposed on sectors such as defence, nuclear power, aerospace, utilities, gas, cyber security and telecommunications. But the law had made it difficult for investors to invest in Japan.
Of Japan’s 3,703 listed companies, nearly 500 would fall under the restrictions. The list of firms will be published by the government in April.
Seiji Arai, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told the media, “In addition to rising infections, day by day more companies are refraining from events and business trips. That will surely have an impact on upcoming economic indicators.”
Japan’s Finance Ministry is closely watching global stock markets as volatility is increasing on the back of coronavirus outbreak. The government and the central bank will implement necessary steps to support the Japanese economy.
The country’s GDP contracted an annualised 6.3 percent in the fourth quarter last year. This marks its first sharp economic dip in five and a half years, media reports said.