Foreign Direct Investment (FDI)1 into Japan has recently shown impressive growth, in particular in relation to non-manufacturing sectors like financial services. While there has been rapid growth in FDI worldwide for a number of years, FDI into Japan has been relatively low because of a number of features of the Japanese business environment. However, the value of foreign inflows in 1998 was much higher than in 1997, despite (and in part because of) th