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Foreign investment in Japan on the rise

TOKYO, June 29 (UPI) -- Foreign investment in Japan in 2004/05 outstripped the country's investment overseas for the first time in a half-century, the BBC reported Wednesday.

According to Japan's Finance Ministry, foreign firms invested more than $36.25 billion into Japan in the 12 months leading up to March.

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The figure, which doubled in three years, was driven by an upsurge in money coming from the United States.

Japan until now has had a reputation for being hostile to foreign investment.

Its corporate structures traditionally have been set up to cement cross-shareholdings between Japanese companies, preventing hostile takeovers by either domestic or outside buyers.

Recent legal changes could make mergers easier, after Japan's upper house of parliament Wednesday backed a law already passed by the lower house.

But the rules still make hostile bids difficult by easing restrictions on so-called "poison pill" defenses, which allow existing shareholders to buy up stock at reduced prices, thus driving off predators.

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