BANGKOK - With Japan calling for inward direct foreign investment of 35 trillion yen (S$385 billion) by 2020 to prop up its stagnating economy, businesses in Thailand are taking advantage of the yen's weakness against the US dollar and Thai baht to turn the tables and reverse traditional capital flows.
The phenomenon was pointed out by Thai business leaders at an investment symposium in Bangkok on May 27. It followed a visit to Japan in February by Prime Minister Prayuth Chan-ocha during which a bilateral memorandum of co-operation was signed, the first by a developing Asian country intending to invest in Japan.
"Thai companies and individuals have invested more than US$200 million in the past two to three years in Japan," said Thawee Phuangketkeow, a Bangkok Bank senior vice president and general manager for Japan.
Thawee was speaking at the Invest Japan Symposium hosted by the Japan External Trade Organisation (Jetro), and he predicted that at least another US$300 million will go into Japan from Thailand in the next few years.
As Thailand's largest commercial bank, Bangkok Bank is seeing more opportunities to extend loan facilities to Thai clients investing overseas: "Our balance of loans in Japan is US$600 million," Thawee told the Nikkei Asian Review on the Jetro symposium's sidelines. "The loan portfolio is growing fast, and we expect double-digit growth next year. We are seeing demand not only for real estate assets but also for investment in manufacturing businesses such as solar power."