Japan officially launched a cross-ministerial panel on June 29, 2026, designed to screen foreign investments for risks to national security. The panel coordinates across several ministries, replacing the previous system where reviews were mainly conducted by the Finance Ministry and relevant industrial ministries [1, 2, 3].
This new system, often described as Japan’s version of the U.S. Committee on Foreign Investment (CFIUS), stems from recent revisions to the Foreign Exchange and Foreign Trade Act. It expands pre-screening to cover indirect ownership and transactions by high-risk investors, such as foreign governments or state-controlled entities [1, 2, 3].
Before the 2019 overhaul, foreign investors could acquire up to 10% of a Japanese company without triggering government scrutiny. The revised law lowered that threshold to 1%, significantly broadening the scope of investments subject to review [1, 2].
The Japanese government cited increasing threats like Chinese espionage, semiconductor smuggling, fentanyl trafficking, and weaknesses in supply chains as drivers behind strengthening economic security measures [1, 2, 3]. Japan is viewed as a trusted transit hub vulnerable to technology leaks, illegal fund infiltration, and other activities by foreign actors [1, 2, 3].
Prime Minister Sanae Takaichi has long pushed for stronger economic security frameworks. This new panel institutionalizes economic security as a core element of Japan’s national security policy and represents the country’s most extensive efforts in recent years to address such risks [1, 3].
The panel’s launch marks the start of implementing these tighter oversight mechanisms. It will coordinate foreign investment reviews across ministries to better identify and mitigate risks posed by investments from potentially hostile foreign entities [1, 2, 3].
