Investments by Japanese companies in Israel in 2023 reached $662 million, compared to $1.55 billion the previous year and nearly $3 billion in 2021, a record year. According to a report by Harrell Hertz Investment House, which specializes in the Japanese market, sales of Japanese companies have returned to 2018 levels.
The number of Japanese investments remained stable at 62, the same as the previous year's 66. This shows that as Israel's risk increased, the size of its investments declined.
The decline in investment was particularly severe in the second half of 2023. Fears about the government's stability and the outbreak of war with Hamas in the last quarter brought Japanese investment to an almost complete halt.
However, Japanese investment in Israel has become a stable and influential factor in Israel's high-tech industry, once again accounting for 10% of total investment.
This year, only one acquisition of an Israeli company by a Japanese company was completed: Oxide's acquisition of Israel's Lycol.
Another feature of Japanese investment is the prominent element of strategic investment. About half of the investments were made by industrial companies seeking to develop joint technologies with the help of Israeli entrepreneurship and gain a future advantage over their competitors.
Regarding areas of investment in high-tech industries, 16% went to healthcare, 13% to urban and maritime transport, and 11% to security and cyber sectors. 19% of Japan's investments went to the fintech industry and various funds.
Another reason that deterred Japanese investors was that the Japanese yen's value against the US dollar plummeted from 115 yen in January 2023 to $147-150 in early 2024.
Harel Hertz does not see dramatic changes in the scope of Japan's investment in Israel as long as visits and travel are restricted, field offices resume operations, domestic stability is restored and the war ends. I didn't expect it. region.
