2024 Regional Roundtable Update: Japan

2024 Japan Regional Update

Firm Name: City-Yuwa Partners
Authors: Daigo Nomura and Hidetomo Futami

1. How is the political environment impacting business in or with your country?
   Japan ended eight years of negative interest rates on March 19, 2024. Like other countries, the Bank of Japan
   used negative interest rates to stimulate economic growth and combat deflationary pressures such as wage
   stagnation. However, the Bank of Japan noted that there have been signs of healthy inflation in recent
   months, leading to its decision to become the last country in the world to end a negative interest rate policy.
   As a result of this policy change, we have not seen any dramatic changes in the legal market. We continue to
   see a number of foreign investors who seem to have an appetite for the Japanese market, particularly in the
   real estate and M&A markets.
2. Which countries have you previously collaborated with and do you see potential for future
   collaboration with on cross-border matters within the region?
   We recently acted for Minter Ellison in Australia in response to a request for a reference opinion on the
   adequacy of disclosures that a Japanese company, the client's joint venture partner, was required to make
   under the rules of the Japanese Stock Exchange. We have also had the opportunity to work with New
   Zealand. As for the potential for future cooperation, I see many clients from Singapore or investing through
   Singapore companies, so cooperation with Singapore on cross-border matters may be possible. In addition,
   Japanese companies are looking for opportunities to invest in Vietnam, Malaysia, Indonesia, Thailand, and
   India, so we believe cooperation with these countries would also be possible.
3. What legislation has recently changed or is changing that a potential international client should be
   aware of?
   Security concerns have long been expressed over the ownership and use of land on remote border islands
   and around defense-related facilities, and the Critical Land Regulation Law was enacted to address this and
   came into force in September 2022. The regulations include: (i) designating areas within an area of
   approximately 1,000 meters around defense-related facilities, etc. and areas within the area of border islands,
   etc., where it is particularly necessary to prevent land and buildings within the area from being used for activities that interfere with the functions of important facilities and border islands, etc., as watchful watch
   areas; (ii) establishing watchful watch areas and special (iii) when concluding a contract for the transfer or
   establishment of ownership rights, etc. in relation to land, etc. in a special monitoring area, the parties to the
   contract are required to submit a notification. As part of the notification, both the seller and the buyer are
   required to deliver their name, address, nationality, and the land subject to the notification. These zones of
   special attention were first published sequentially at the end of December 2022, then in July 2023, and most
   recently in December 2023. Many of the lands in the watch zone are scenic and suitable for remote islands
   and other resort facilities, and foreign clients should be aware of this when considering investing near the
   above-mentioned lands.