German companies value Japan's stability in times of geopolitical upheaval

Economic stability, openness to technology and innovation, the reliability of business relationships as well as a highly developed infrastructure and qualified specialists - these and other factors make Japan an attractive location for German companies. 82 per cent of the companies that we surveyed together with the German Chamber of Industry and Commerce in Japan (AHK Japan) for the current business climate survey "German Business in Japan 2025" generated a profit in 2024, and the outlook for the future is also optimistic: 73 per cent expect sales to increase in 2025, and as many as 80 per cent expect this to be the case in 2026.

Accordingly, just under one in three companies (31 per cent) are planning higher investments in 2025; a good one in two (52 per cent) want to hire additional employees. For 2026, these figures will rise even further to 46 per cent and 59 per cent respectively.

For almost half of the companies surveyed (47 per cent), Japan is one of the five largest sources of sales and earnings for the group as a whole. For 86 per cent of the companies surveyed, Japan's high sales potential is the most important reason for their involvement in Japan - an increase of five per cent compared to the previous year. The importance of Japan as a partner for expansion into third markets is also increasing: 61 per cent cite participation in the global business networks of Japanese companies as the second most important reason. 63 per cent work together in third markets. Collaboration is not limited to a specific region, but encompasses the whole of Asia, Europe, China, North America and India. Cooperation is increasing particularly strongly in the European domestic market, with an increase of twelve percentage points.

The openness of Japanese companies to cooperating with foreign partners has grown significantly over the past ten years. 61 per cent of respondents confirm this.

Recognising new trends in technology and innovation is cited by 61 per cent as the reason for their involvement in Japan. Observing Japanese competitors is relevant for 57 per cent of companies, as German companies are in competition with them worldwide.

Although the geopolitical upheavals do not stop at Japan, the German companies operating here are less unsettled by them than companies in Germany: 22% of respondents expect President Donald Trump's re-election to have a positive impact on their business in Japan, 39% remain neutral and 39% are also sceptical. Compared to the survey results for Trump's first election as US president in 2017, the confidence of German companies in Japan has also increased by 10 percentage points.