FDI in Japan Foreign direct investment (FDI) in Japan is still at a limited level, the Japanese government has also promoted it in recent years and it is said to be growing rapidly at cause of this. What we can say about FDI in Japan is that one of it is the employment of Japanese affiliates of foreign companies (JAFF). These are the affiliates of foreign workers in the service and manufacturing sectors in Japan. In addition to this, according to the MITI (Ministry of International Trade and Industry, now recognized as Ministry of Economy, Trade and Industry, (METI)) report for incoming foreign direct investment in Japan, there are approximately 19 foreign subsidiaries in manufacturing industries For subsidiaries of non-manufacturing industries, FDI is included in some sectors such as transportation and telecommunications, wholesale trade, retail trade, services and others (agriculture, construction, etc.). foreign workers in the service sector and the United States is one fifth less, or 0.59% less than in Japan, while for the manufacturing sector the ratio between Japan is 0.79% lower than in that of the United States 10.48% (Keiko & Kyoji, 2001).FDI in Japan began to increase during the second half of the 1990s. This is due to the fact that, according to past sources, the rate of FDI outflow is higher than the inflow rate to Japan In the 1990s, FDI outflows from Japan had reached 7,352 billion yen, while at that time FDI inflows into Japan were only about 262 yen. This shows that the FDI inflow rate was 28 times lower than the outflow rate. Due to the increase in the rate of inflows in 1992 and the continued growth until the year 1999, the gap of these two rates has narrowed...to the middle of the paper...ent which occurs naturally in the Japanese economy, and foreign direct investment has also provided job opportunities in Japan. Besides that, thanks to the effective investments it has led to the existence of business opportunities in that country. (Naoko et al., 2000). Foreign direct investment in Japan also had a positive impact starting from the year 1899 to 1931, as mentioned by Mason (1987) in his study on foreign direct investment and Japanese economic development:. . . . Although the amount of foreign capital directly invested in Japan from 1899 to 1931 was not large, the impact of this investment on Japan was indeed very large. It is clear that foreign direct investment: first, has participated in and stimulated a wide range of entrepreneurial activities, often employing advanced methods; second, it provided valuable insights into Western technology and management practices; influenced the internal economic geography. (p. 13)