TOKYO:

In a striking statement, Keisuke Yokoo, head of the Japan Investment Company (JIC), warned that blocking the $47 billion foreign acquisition bid for Seven & i Holdings, the parent company of 7-Eleven, could severely tarnish Japan’s international reputation. His comments come amidst rising tension over foreign investments that rattled some local politicians concerned about national security.

Yokoo emphasized the importance of engaging with global markets, arguing that Japan’s business community is not unanimously embracing protectionism, as some critics suggest. He noted, "It wouldn't be good for Japan's image," adding that there is hardly a connection between the convenience store sector and national security concerns.

The potential takeover by Canada’s Alimentation Couche-Tard has caused unease within Japan. Although Seven & i’s primary convenience store operations are not considered critical to national security, the company’s diverse portfolio, which includes a financial services division, has prompted some politicians to express hesitations about the deal. In September, the firm was classified as "core" to national security, intensifying the scrutiny on its foreign ownership.

Interestingly, amid a backdrop of increasing protectionist sentiments globally, particularly in the U.S. under former President Donald Trump’s trade policies, Japan has recently aimed to attract more foreign investments. The JIC, established in 2018, is tasked with revitalizing Japan’s economic landscape, promoting stronger businesses through strategic acquisitions.

Yokoo also highlighted the need for consolidation in Japan's chemical sector. Emphasizing the importance of enhancing the presence of chemical firms globally, particularly those serving the semiconductor industry, he stated: "We need fewer companies that are bigger in size." This reflects Japan's ongoing efforts to maintain its competitive edge in high-tech materials, despite a decline in semiconductor manufacturing.

The JIC aims to tackle issues at companies like JSR Corporation, which had suffered financial setbacks. Yokoo expressed his ambition for investment returns, targeting a minimum return of 1.5 times that of the JSR investment. He further commented on the possibility of investing in the struggling Nissan, conditional upon the carmaker’s recovery.

In conclusion, as Japan navigates complex international negotiations and internal economic strategies, the future of its image and investment landscape remains precarious. The outcome of the 7-Eleven acquisition could set a precedent that influences how foreign investments are approached in the country moving forward.