Index of "1996 Country Commercial Guides"
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U.S. Department of State 
Japan Country Commercial Guide 
Office of the Coordinator for Business Affairs 
 
 
 
 
                     FY 1996 COUNTRY COMMERCIAL GUIDE 
                     ================================ 
 
      U.S. EMBASSY JAPAN 
 
      July 5, 1995 
 
 
 
 
TABLE OF CONTENTS 
 
 
I.    EXECUTIVE SUMMARY   
 
II.   ECONOMIC TRENDS AND OUTLOOK 
  A.  Major Trends and Outlook 
  B.  Principal Growth Sectors 
  C.  Government Role in the Economy 
  D.  Balance of Payments Situation  
  E.  Infrastructure Situation 
 
III.  POLITICAL ENVIRONMENT 
  A.  Nature of Political Relationship with the United States 
  B.  Major Political Issues Affecting the Business Climate 
  C.  Brief Synopsis of Political System, Schedule for Elections, and  
      Orientation of Major Political Parties 
 
IV.   MARKETING U.S. PRODUCTS AND SERVICES 
  A.  Distribution and Sales Channels 
  B.  Use of Agents/Distributors; Finding a Partner 
  C.  Franchising 
  D.  Direct Marketing 
  E.  Joint Ventures/Licensing 
  F.  Steps to Establishing an Office 
  G.  Selling Factors/Techniques 
  H.  Advertising and Trade Promotion  
  I.  Pricing Product 
  J.  Sales Service/Customer Support 
  K.  Selling to the Government 
  L.  Protecting Your Product from Intellectual Property Rights  
      Infringement 
  M.  Product Liability Law  
  N.  Need for a Local Attorney 
 
V.    LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT  
  A.  Best Prospects for Non-agricultural Goods and Services 
  B.  Best Prospects for Agricultural Products 
  C.  Significant Investment Opportunities 
 
VI.   TRADE REGULATIONS AND STANDARDS 
  A.  Trade Barriers, Including Tariffs, Non-Tariff Barriers and Import  
      Taxes 
  B.  Customs Valuation 
  C.  Import Licenses 
  D.  Export Controls 
  E.  Import/Export Documentation 
  F.  Temporary Entry 
  G.  Labeling, Marking Requirements  
  H.  Prohibited Imports 
  I.  Standards 
  J.  Free Trade Zones/Warehouses 
  K.  Special Import Provisions 
  L.  Membership in Free Trade Arrangements  
 
VII.  INVESTMENT CLIMATE 
  A.  Government Attitude Toward Private Foreign Investment 
  B.  Bilateral Investment Agreements  
  C.  OPIC and Other Investment Insurance Programs 
  D.  Labor 
  E.  Foreign Trade Zones/Free Ports 
  F.  Capital Outflow Policy 
  G.  Investment Data 
  H.  Major Foreign Investors 
 
VIII. TRADE AND PROJECT FINANCING 
  A.  Brief Description of Banking System 
  B.  Foreign Exchange Controls Affecting Trading 
  C.  General Financing Availability 
  D.  How to Finance Exports/Methods of Payment 
  E.  Types of Available Export Financing and Insurance 
  F.  Project Financing Available 
  G.  List of Banks with Correspondent U.S. Banking 
      Arrangement 
 
IX.   BUSINESS TRAVEL 
  A.  Business Customs 
  B.  Travel Advisory and Visas 
  C.  Holidays 
  D.  Business Infrastructure 
 
 
      APPENDICES 
 
A.   COUNTRY DATA 
B.   DOMESTIC ECONOMY 
C.   TRADE 
D.   INVESTMENT STATISTICS 
E.   U.S. AND COUNTRY CONTACTS 
F.   MARKET RESEARCH 
G.   TRADE EVENT SCHEDULE 
 
 
 
      This Country Commercial Guide (CCG) presents a comprehensive look 
at Japan's commercial environment through economic, political and market 
analyses.   
      The CCGs were established by recommendation of the Trade Promotion 
Coordinating Committee (TPCC), a multi-agency task force, to consolidate 
various reporting documents prepared for the U.S. business community.  
Country Commercial Guides are prepared annually at U.S. Embassies 
through the combined efforts of several U.S. government agencies. 
 
 
I.  EXECUTIVE SUMMARY 
 
      As the world's second largest market, Japan offers large-scale 
opportunities and strategic benefits for U.S firms.  As an expensive, 
highly competitive, highly complex and not yet fully open market, Japan 
remains, however, a challenging place to do business.  To be successful 
in Japan, a U.S. company must be committed to taking a long-term 
approach to entering the market and building market presence.  U.S. 
companies with quality, competitive products, that are willing to 
undertake the high cost of initial market entry in Japan, can achieve a 
respectable market share with attractive profit-levels. 
      Reasons why U.S. companies should plan to establish a presence in 
Japan include, at a minimum: (1) to gather information on Japanese 
competition and technology; (2) to develop sales and distribution routes 
for the large Japanese market; and (3) to compete with the Japanese on 
their own turf, thereby enhancing competitiveness and market share 
ultimately in the U.S.  Also: (4) to gain access to the Asia-Pacific 
market through, for instance, Japan's official development assistance 
program, which is the world's largest; and (5) to gain experience 
responding to the exacting standards of Japanese customers in order to 
support a worldwide quality assurance program. 
      The U.S. Government has worked energetically to eliminate trade 
barriers in Japan -- including barriers in the "Big Emerging Sectors" 
and "Best Prospect" industry areas (discussed in Section II) -- through 
trade negotiations and high visibility trade promotions.  The Commercial 
Service of the U.S. Department of Commerce has more than 60 commercial 
officers and staff who serve U.S. exporters pursuing opportunities in 
Japan.  Commercial Service staff are available in the Embassy and in the 
U.S. Trade Center in Tokyo as well as in the Osaka, Nagoya, Fukuoka and 
Sapporo Consulates; the State Department also assists U.S. business 
through the U.S. Consulate-General in Naha, Okinawa.  The Agricultural 
Trade Office serves U.S. agricultural and food exporters through offices 
in Tokyo and at the Osaka Consulate-General.  Other U.S. government 
agencies including the State, Treasury, Energy and Defense Departments, 
are also actively engaged in analyzing economic conditions, negotiating 
trade-related agreements, and working with Commercial and Agricultural 
Service colleagues. 
      While U.S. Government efforts are designed to help "open doors" 
for U.S. firms, the rest is up to individual companies.  To succeed, 
companies must plan to develop: (1) financial and managerial 
capabilities as well as Japanese speaking staff for Japan; (2) 
modification of products to suit Japanese customers, including 
translation/metrification of technical manuals and sales literature; (3) 
a long term view towards maximizing market share at a reasonable profit; 
and (4) careful monitoring of Japanese demand, distribution, competitors 
and the government. 
 
      Japanese companies compete in a tough domestic market where 
customers are still willing to pay a high price for quality.  The 
Japanese consumer has traditionally been conservative and brand 
conscious; however, during the recessionary environment of the past five 
years, opportunities are emerging for purveyors of "value."  While 
group-oriented, conformist buying habits in Japan are prominent, more 
fragmented buying habits are emerging among a new generation of more 
individualistic consumers, centering on the eight million Japanese 
between ages 18 and 21 with disposable income in excess of $35 billion.  
Reflecting this, Japan's complex distribution system is now changing 
dramatically. 
      Although much is made of the slogan "internationalization" in 
certain circles, Japan remains a highly homogeneous society and business 
practice is characterized by longstanding, close-knit relations among 
individuals and firms.  Regulatory processes and local business 
practices in Japan reflect systems designed for indigenous needs with 
little or no consideration given to potential participation by foreign 
companies.  Even for Japanese business people, it takes time to develop 
relationships and become an "insider."  For a non-Japanese 
businessperson, the task is formidable, but not impossible.   
      Despite these challenges, Japan is the second largest importer of 
U.S. goods and services after Canada.  Japan's imports of manufactured 
goods from the United States increased by 1.2% in 1994 to $40.4 billion, 
accounting for 64.4% of total imports from the United States.  Although 
Japan's overall economic outlook remains cloudy, the outlook for exports 
to Japan remains positive.  Accelerated by a series of recent economic 
stimulus packages and massive undertakings such as the government 
project to wire the nation with broadband ISDN, a huge public and 
private infrastructure buildup is still underway in Japan as the country 
prepares to step into the 21st century.  The Japanese government has 
committed to spend, between 1991 and 2000, 430 trillion yen (over $5 
trillion) on public works, including airports, bridges, roads, port 
development projects, and heliports.  Large scale private investment is 
expected in such areas as intelligent buildings, telecommunications 
systems, resorts, retirement communities, marinas, conference centers, 
medical cities, and science cities.  In short, this is a large economy 
that presents good opportunities for U.S. firms. 
      Underlying the "Best Prospects" in section V are societal trends 
which U.S. suppliers can profit from.  These include: the aging 
population; changing leisure activity and consumerism; environment and 
health care; deregulation and decentralization; new distribution 
systems; increased information demands; internationalization and 
regional integration.  The Commercial Service's strategy to tap their 
trends includes efforts to broaden outreach to: Japan's regional 
markets, keying on Japan's ten regional power utilities which purchase 
more than $40 billion annually in non-fuel goods and services; 
Government of Japan procurement of goods and services; regional 
opportunities from Japan's Official Development Assistance (ODA) program 
which in 1994 exceeded $13 billion in mostly untied financing; and 
government/industry "partnership initiatives" with the American Chamber 
of Commerce in Japan (ACCJ), the American States Offices Association 
(ASOA), American Electronic Association (AEA) and other U.S. industry 
associations in Japan. 
 
      Country Commercial Guides are available on the National Trade Data 
Bank on CD-ROM or through the Internet.  Please contact STAT-USA at 1-
800-STAT-USA for more information.  To locate Country Commercial Guides 
via the Internet, please use the following World Wide Web address:  
WWW.STAT-USA.GOV.  CCG can also be ordered in hard copy or on diskette 
from the National Technical Information Service (NTIS) at 1-800-553-
NTIS. 
 
 
II.  ECONOMIC TRENDS AND OUTLOOK 
 
A.  Major Trends and Outlook 
 
      1.  Overview 
 
      The Japanese economy, the world's second largest at more than $4 
trillion, in JFY 1994 (April 1, 1994 - March 31, 1995) recorded its 
third straight fiscal year of sub-1% gross domestic product (GDP) 
growth, 0.6% for the fiscal year.  Forecasters project continued slow 
growth in 1995, but also point to increasing downside risks to the 
growth scenario. 
      Until 1992-1993, Japan had not experienced two consecutive years 
of less than 3 percent real growth in the post war period.  The late 
1980's surge in asset prices and high rates of capital investment and 
hiring gave way by 1991 to a period of sharply slower growth, corporate 
restructuring, and balance-sheet adjustment by businesses and consumers.  
Equities and real estate are still well below their respective peaks, 
and continued stock adjustment suggests that private business investment 
will be an uncertain factor in this recovery. 
      In JFY 1994, residential investment and public spending were among 
the few bright spots in the economy, as private demand made a barely 
positive contribution to overall domestic demand growth.  The highly 
destructive earthquake which devastated Kobe and the surrounding region 
on January 17, 1995, is expected by many analysts to have only a 
temporarily depressing effect on economic output, followed by an 
economic boost from public and private earthquake reconstruction 
spending.  Four fiscal stimulus packages between August, 1992 and 
February, 1994 injected a substantial amount of public works spending 
into the economy; but the spending was exhausted by the end of 1994.  
Regular budgets, aside from the four "emergency" stimulus packages and 
the supplementals for earthquake reconstruction have been contractionary 
in real terms.  However, income tax cuts begun in 1994 will continue in 
full at least through 1995. 
      In its external accounts, Japan's current account surplus declined 
slightly to $129 billion in 1994 from a record $131 billion in 1993.  
The modest decline reflects strong import growth last year, together 
with a widening of Japan's deficits in travel and transportation 
services, partially offset by continued growth in merchandise exports.  
The current account continued to narrow during the first four months of 
1995.  The seasonally adjusted annualized surplus for the January-April 
period totaled $113 billion. 
 
      2.  The Commercial Environment 
 
      The high yen, and overinvestment and overhiring in the 1980's, 
have led many Japanese companies to undertake major cost-cutting 
efforts.  For example, Matsushita Electric Industrial Co. assigned 4,000 
middle managers and 1,000 new college graduate employees to work in some 
of its 24,000 company-affiliated retail stores, and Hitachi and Hitachi 
Household Electric Appliances temporarily transferred 1,500 of their 
employees to some of their 8,600 "keiretsu" stores and service 
subsidiaries.  Since the implied social contract still effectively 
prevents large Japanese companies from mass layoffs, many companies are 
trying to reduce their payrolls through voluntary retirements, buyouts, 
a near freeze on new hiring, or transfers to more profitable areas.  
They are also utilizing a Ministry of Labor employment adjustment 
subsidy fund for small and medium size companies that are downsizing, 
which pays most of an unwanted worker's salary for staying home, going 
to training, or for moving to other firms. 
      The strong yen has also resulted in more Japanese companies moving 
production overseas to service export markets, resulting in increased 
exports of parts and machinery from Japan, accounting for 40.9% of the 
overseas subsidiaries' parts procurement, according to a MITI survey.  
But this has not yet led to a large increase of reverse imports back 
into Japan: in 1994, the MITI survey showed that reverse imports 
actually fell 25%, due to sluggish demand.   
      As the need to cut costs becomes paramount, long-term keiretsu 
supplier relationships are starting to fray.  Especially in traditional 
manufacturing sectors such as automotive and consumer electronics.  
While this development can give overseas suppliers new opportunities in 
some areas of the Japanese market, it can also create barriers to market 
access as Japanese companies and their traditional suppliers "circle the 
wagons" to protect domestic jobs.    
      While Japan exported $15 billion worth of telephone and radio 
equipment to the United States last year, Japanese companies are being 
very cautious in investing in multimedia and information delivery.  They 
have fewer resources to invest than in the heyday of the late 1980's, 
directing much of their capital to developing production capability and 
markets for their "bread and butter" electronics products in Asia, and 
they lack knowledge and have been unable to gain experience in the 
Japanese markets in these cutting-edge fields.  Ministry of Posts and 
Telecommunications regulations have stymied the proliferation of 
computer networks, limited cable TV penetration to 5 percent of Japanese 
homes and direct satellite broadcasting to 5 channels, and until 
recently prohibited sales of cellular phones (Japan has only 2 million 
users, compared to 11 million in the United States); and investment in a 
nationwide optical fiber network has been delayed.  The "mold breaking" 
thinking that is required to move into the digital, multimedia future 
may not be well served by Japan's educational system, with its emphasis 
on conformity and rote memorization.  Rather than taking the lead, 
Japanese companies seem to be more interested in joint ventures and 
investing in minority stakes with U.S. multimedia companies, and may 
take a back-seat manufacturing role for some time to come. 
      New direct investment in Japan by foreign firms totaled just $4 
billion during calendar year 1992, according to the Japanese Ministry of 
Finance, while outward Japanese foreign investment was $34 billion, 
about 8 1/2 times that figure.  Increased direct investment in Japan is 
crucial to increasing U.S. exports to Japan, as U.S. subsidiaries in 
Japan tend to procure parts and finished products from the parent or 
other traditional suppliers in the United States.  Keidanren, Japan's 
Federation of Economic Organizations, believes that foreign direct 
investment in Japan will boost Japan's imports, and has stated that 
increasing such investment will be the most effective way to dispel 
criticism of Japan's closed market. 
      Many private analysts foresee improved profit and growth prospects 
for large Japanese manufacturers in JFY 1995; but prospects are not as 
bright for non manufacturers and small-medium firms according to 
business surveys.  In addition, many analysts note that no one knows 
when Japanese commercial real estate prices will recover, nor how long 
it will take Japanese financial institutions to dispose of several 
hundred billion dollars worth of non-performing loans.  Many analysts 
see consumption being barely supported by employee income growth.  
Spring wage negotiations in 1995 yielded a minuscule average increase of 
2.83%.  This followed a puny 2.2% increase in nominal, and real (zero 
deflator) compensation in FY 1994.  
      Housing starts have been booming due to a decline in land prices, 
construction expenses, and interest rates.  Housing starts totaled 1.56 
million units in FY 1994, compared with 1.51 million in FY 1993.  
Quarterly data showed residential investment slowing in the second half 
of CY 1994; but many analysts expect earthquake reconstruction to 
support continued housing investment growth in FY 1995.  Recommendations 
by government advisory groups for deregulation to facilitate import of 
inexpensive foreign construction materials in order to lower housing 
construction cost, could also support housing investment if the 
recommendations are implemented.  Housing investment has supported sales 
of furniture, electric appliances, and other consumer durables.   
      The May 1995 Bank of Japan "Tankan" business survey, which covers 
almost 10,000 firms throughout Japan, found major manufacturing firms 
projecting a 17.5% increase in profit and a 3.2% increase in investment 
in FY 1995 (April 1, 1995 - March 31, 1996).  Major non-manufacturing 
firms, on the other hand, were projecting a 0.1% decline in profits and 
only a 1.0% increase in investment.  The investment outlook for small-
medium firms in FY 1995 was much darker, with a projected 18% decrease - 
in spite of projected 40% profit growth for manufacturers and 5% for 
non-manufacturers.  Japan's private nonresidential investment/GDP ratio 
remains high relative to that of other developed countries, accounting 
for 17% of real GDP in Fy 1994. 
      Japanese companies have in the past been able to slash costs to 
remain competitive even as the yen appreciated.  And this time as well, 
many Japanese businesses have slimmed down by repaying debts, shedding 
personnel, and adjusting production.  Successful implementation of the 
Japanese Government's 1994 deregulation program referred to in this 
report will also strengthen Japanese companies' competitiveness.  The 
Japanese economy, therefore, may emerge from the current slowdown with 
many of its traditional strengths intact, however, as of the time of 
drafting this report (June 1995), many analysts cite the possibility of 
a 'triple-dip' recession.   
 
       3.  Removing Barriers to Domestic Demand Growth  
 
            a.  The Role of Consumer Demand 
 
      As recognized in the Structural Impediments Initiative and the 
Framework Talks, Japan needs to effect fundamental reforms in its 
present economy, business practices, financial markets and regulatory 
structure, including land reform, in order to unleash consumer demand.   
      Japan's people are not fully benefiting from their hard work.  
Satisfying the latent demand for better housing and social 
infrastructure would also create a huge demand for new high-tech 
consumer products including home electronics, entertainment and 
information as would implementation of a broad and meaningful 
deregulation effort. 
      Unleashing Japanese consumer demand would suck in imports.  U.S. 
exporters should prepare to take advantage of future deregulatory and 
consumer-led growth trends by carefully monitoring Japanese regulatory 
and consumer demand changes.      
 
            b.  Land Reform 
 
      Japan has for years portrayed itself as a small island nation with 
no natural resources.  In fact, Japan has a great deal of land that is 
not being allocated well, as was recognized in the 1989 - 1992 bilateral 
Structural Impediments Initiative (SII) talks.  Much land is kept off 
the market by antiquated zoning and tax regulation and even land that 
does change hands has been subject, since 1987, to the Land Price 
Surveillance System, under which the prefectural governor can "recommend 
a suspension or modification of" (in Japan, that means veto) a land 
sale.  Vast tracts of land suitable for housing and amenities are also 
held by the Japanese government, by big business and by urban "farmers" 
with their cabbage patches and rice paddies even as close as 30 minutes 
from downtown Tokyo, the center of a metropolitan area with a 30 million 
population.  Japan also has a high rate of capital gains tax for land, 
and most residential mortgage interest is not tax-deductible. 
      While land transactions are constrained by these and other 
factors, taxes for holding land are light, the national fixed asset tax 
averaging 0.19%.  As a result, landowners tend to regard real property 
as an asset to be held long-term rather than to be sold for development.  
Part of the problem in freeing up land for development is that in the 
Japanese economy, land is considered to be the ultimate measure of 
wealth.  Business loans traditionally are secured by real estate 
mortgages, and this practice became highly leveraged in the late 1980's.  
In the wake of late 1980's land price inflation and the current stagnant 
for land (with prices in a downward spiral), measures are being taken to 
increase the availability of land for sale.  This should contribute to 
increased consumer demand, which is a key to a domestic-led recovery.  
In the words of economist Kenneth Courtis, "Releasing the supply of land 
onto the market would provide Japan with the basis for a long-term, non-
inflationary, consumer-driven cycle of expansion in the domestic 
economy."   
Recent deregulation measures have included steps to enhance the 
transferability of land.  Such deregulation, if followed through, could 
create significant opportunities for U.S. exporters. 
 
       4.  Japanese Consumers' Discovery of "Value" streamlines  
           Distribution 
 
      A priority of the Japanese government is to reduce the consumer 
price levels in Japan compared to other OECD countries.  Prices are high 
because costs are high in part due to government regulations protecting 
employment in Japan's inefficient sectors. 
Consumers, while still desirous of luxury brand-name goods, now 
increasingly demand good value, too.  In surveys, housewives in their 
20's state that they shop at stores which offer the greatest discounts.  
Changes are now starting to appear in Japan's distribution system to 
give consumers a wider choice of products, including imports, and lower 
prices, too.   
      Discount stores have been increasing in number and sales volume.  
The total sales volume of discount stores has reached 5 trillion yen, 
about half that of department stores.  Under new regulations any store 
with more than 500 but less than 1,000 square meters may be opened by 
notification to the government only.  Large-scale stores may freely stay 
open until 8:00 p.m.  Such stores may stay open until 9:00 p.m. up to 60 
days per year, and need stay closed only 24 days per year, without 
reporting to the government. 
      Major discount chains such as Daiei have introduced their own 
private brands of film, orange juice, detergent and other products, 
using imports, at substantial discounts from Japanese name brands.  The 
system of manufacturer-set prices for beer, recorded music and books 
collapsed or was in the process of collapse in 1995.  These and other 
trends have served to bring down prices of some of these products across 
the board. Japanese consumers are increasingly seeking value for their 
yen. 
      More and more stores are defying manufacturers' suggested retail 
prices and are setting their own prices.  Manufacturers of home 
appliances and other goods are also starting to deliver products to 
stores without suggested list prices. 
 
       5.  Travel and Tourism Outlook 
 
      The two-country effort initiated in June 1994 to double the number 
of tourists between the U.S. and Japan to 8 million persons by the year 
2000 has already begun to show positive results.  Japanese arrivals in 
the U.S. in 1994 increased by 13.4% over 1993 to over 4 million persons, 
generating tourism export earnings exceeding an estimated $20 billion 
for our country.  A $3 million fully-integrated promotional campaign, 
funded cooperatively by public and private sector tourism interests of 
both countries, is being launched in 1995, which, coupled with the 
vastly increased purchasing power of the yen, is certain to generate 
substantial increases in the U.S. travel trade surplus with Japan which 
in 1994 is estimated to have amounted to well over $13 billion.	 
 
       6.  Agricultural Trade Outlook 
 
      Japanese agricultural production is steadily contracting on a 
year-by-year basis, with key sectors seeing decreasing production in 
most years.  Cereals, rice, dairy, beef and pork, and fruits and 
vegetables are all sharing this decline to greater or lesser degrees. 
      Although agricultural liberalization is often used as a scapegoat 
for the problems facing Japanese farmers today, there are other 
structural factors which threaten the future of Japanese agriculture.  
Without major reforms, the agricultural sector cannot offer the 
opportunities that Japanese youth can find in the still-growing 
industrial sector.  Efficiency is hampered by the small and scattered 
nature of farm lands, and by inordinately high input costs.  Farmers are 
limited, by the government and the cooperative system, in their ability 
to make decisions regarding production, pricing and marketing.  As a 
result, young people continue to leave the family farm--only about 2,000 
agricultural school graduates born to farm families continue the family 
occupation in a typical recent year.  On the other hand, of Japanese who 
identify themselves as being "mainly" farmers, 63 percent are over age 
60, while another 16 percent are over age 50.  As these older farmers 
begin to retire in the coming decade, they will by and large not be 
replaced.  The land these retirees have tilled will likely not be 
consolidated into larger plots, however, due to Japan's archaic land use 
laws that make it virtually impossible to sell or rent out farm land.  
The result is that Japan may loose up to half of its current core 
farmers and, with them, a large share of current planted acreage.  This 
implies tremendous shortfalls in local supply in the next decade, which 
will need to be answered with increased imports.  This spells 
outstanding opportunity for U.S. exports of both primary and processed 
agricultural products. 
      At the same time that local production is posed for a precipitous 
decline, access for imported agricultural products has never been 
better.  Due to persistent negotiation by the United States and others 
throughout much of the 1980's and 1990's, Japan has eliminated many, if 
not most, of the agricultural market access barriers for which it was 
once famous.  Where previously, quotas and outright bans restricted the 
market for U.S. beef, citrus, fruit juice, cherries, apples, and ice 
cream, all of these markets have now been opened.  While some problems 
remain, especially technical issues concerning food additives and phyto-
sanitary barriers on fruits and vegetables, the Japanese market, 
contrary to popular belief, is substantially open to U.S. food and 
agricultural products. 
      The combination of this radically improved market access and 
declining domestic production has resulted in phenomenal export growth 
for American agriculture.  Already the largest importer of U.S. 
agricultural products, Japan may increase its agricultural imports from 
the U.S. by $1 billion per year each year until the turn of the century.   
1994 imports of U.S. agricultural products (not including forest 
products) reached $11.8 billion, up from $10.8 in 1993.  Export stars 
include beef, pork, ice cream, broccoli, asparagus, frozen vegetables, 
cherries, and processed snack foods.  
 
       7.  Regional Outlook 
 
            a.  Tokyo and the Kanto Region 
 
      Tokyo, Japan's sophisticated capital and the surrounding 
prefectures of Kanagawa, Saitama, and Chiba, occupy the largest flat 
area in Japan called the Kanto Plain.  Together, these four prefectures 
have a population of over 31 million, equivalent to the New York and Los 
Angeles metropolitan areas combined.  Tokyo is the governmental, 
business, higher education, information, media, fashion and cultural 
center of Japan, corresponding to Paris or London.  Most major Japanese 
companies, trade associations, and U.S. companies have their 
headquarters or major branches in Tokyo.  Kanagawa, which includes the 
cities of Yokohama and Kawasaki, is by far the richest prefecture in 
Japan, with a per-capita income of over 4.5 million yen (about $43,000), 
almost 50 percent above the Japanese average.   
      A presence in Japan usually means a presence in Tokyo.  Despite 
high rental costs, most U.S. companies locate in Tokyo because of the 
need to interface with their Japanese customers, to obtain market 
information, and in many cases, to handle relations with Japanese 
Government ministries.  Consumers in Tokyo are more likely to come into 
contact with foreign products, food and styles than elsewhere in Japan.  
Also, consumer styles and fashions emanate from Tokyo in avidly read 
magazines as well as the television networks. 
      In addition to programming, consumer goods, value-added food 
products, apparel, furniture and automobiles, good export prospects to 
the Tokyo area include medical products, computers and 
telecommunications hardware and software, and business services. 
      The U.S. Embassy works closely with the 700 member companies, 
2,400 individual members, and 40 committees and sub-committees of the 
American Chamber of Commerce in Japan in promoting U.S. business 
interests in Tokyo and throughout Japan. 
 
            b.  Osaka and the Kansai, Chugoku and Shikoku Regions  
 
      "Kansai" is the seven-prefecture region of west central Japan 
centering around the cities of Osaka, Kobe, Kyoto and Nara, with a 
combined population of some 22 million people.  The traditional merchant 
center of Japan, the Kansai is an economic giant with a GRP (gross 
regional product) of nearly $1 trillion in 1994, larger than Korea, 
Taiwan, Hong Kong, and Thailand combined, accounting for over 3 percent 
of the entire world's GNP.   
      Kansai local governments (Hyogo and Osaka Prefectures, and Kobe 
and Osaka Cities, in particular) have aggressive major development plans 
of over $400 billion alone in the 614 projects (out of a total of 881) 
for which cost estimates are available.   Future projects such as 
Technoport Osaka and Osaka International Culture Park City, will include 
continued massive land reclamation and building complexes for 
commercial, industrial, and research facilities, as well as bridge 
construction, expected expansion of the new offshore Kansai 
International Airport, and construction of a new regional airport 
offshore Kobe.  The private sector will be investing heavily in the Kobe 
region to replace homes and commercial buildings destroyed or damaged in 
the January, 1995 Great Hanshin Earthquake.  U.S. companies should have 
growing opportunities to participate in these projects in coming years. 
      The Kansai offers many advantages to American companies looking to 
enter the Japanese market:  labor and housing costs much lower than 
Tokyo; superb transportation, communication, and other infrastructural 
support; average office rental prices approximately 50% of Tokyo's; a 
business orientation (as the home of tens of thousands of companies, and 
the center of Japan's textiles and apparel, chemicals, pharmaceuticals, 
and sporting goods industries); and a long history of a willingness to 
innovate. 
      The Osaka-Kobe Consulate General, including CS Osaka and the 
Foreign Agriculture Service, works closely with Japanese and U.S. 
business organizations such as the Kansai Chapter of the American 
Chamber of Commerce to promote American exports to the Kansai. 
      The Consulate General also promotes U.S. business in the Chugoku 
region, centering on the growing industrial cities of Hiroshima and 
Okayama; Shikoku, which is seeing renewed growth due to three bridge 
construction projects linking Shikoku island to Japan's main island of 
Honshu; and Hokuriku, on the Japan Sea. 
 
           c.  Nagoya and the Chubu Region 
 
      Nagoya, capital of Aichi Prefecture and hub of the  
8-prefecture, 20-million population Chubu region of central Japan, is 
Japan's third largest metropolitan area, after Tokyo (225 miles to the 
east) and Osaka (125 miles to the west).  Aichi, with neighboring Mie 
and Gifu Prefectures, comprises the Nagoya Consular District.  The Chubu 
is the core of Japan's automotive, aerospace, machine tools, and 
ceramics industries.  Along with neighboring Shizuoka Prefecture, the 
region has a GDP as large as Canada's and accounts for almost half of 
Japan's trade surplus with the U.S.; Aichi Prefecture alone accounts for 
over 80% of that trade.   
      Top U.S. aerospace/defense firms are active in technical tie-ups 
and production arrangements.  Over ten U.S. auto parts firms have set up 
Nagoya operations to serve Japanese makers.  The Chubu features several 
major projects, public and private, attractive to U.S. firms:  the Aichi 
Health Forest, the Japan Railways (JR) Tokai Central Towers, the Nagoya 
Dome, the Nagoya International Design Center, and the proposed $10 
billion Chubu New International Airport.  CS Nagoya has worked closely 
with American business to develop the 80-member American Business 
Community of Nagoya (ABCN) into the recognized "Voice of American 
Business in the Chubu."  And US&FCS Nagoya's joint Made-in-the-USA 
initiative with ABCN has significantly boosted sales of a wide range of 
consumer goods -- cars and cookware to fashion and furniture, even 
housing -- in the Chubu. 
 
            d.  Fukuoka and the Kyushu-Yamaguchi Region 
 
      The Kyushu-Yamaguchi region, lying 700 miles west of Tokyo is one 
of the most rapidly developing areas of Japan and is quickly turning 
into a third economic center, following the Tokyo and Osaka districts.  
More important, with its close proximity to Asian countries, the region 
is positioning itself as Japan's gateway to Asia, setting the pace for 
economic, political and cultural ties with Japan's Asian neighbors.  
Kyushu-Yamaguchi, with a land area the size of Switzerland or Holland 
and a population of 15 million, has an annual economic output of over 
Yen 45.88 trillion (FY92, $540 billion at current rate of 85 Yen/USD).  
Its economy is larger than that of Korea and Taiwan combined, and 
roughly equal to that of Australia.  The region, known as Japan's 
"Silicon Island" because it accounts for 42 percent of Japan's total 
semiconductor chip output, also represents about 10 percent of Japan's 
motor vehicle production. 
      Particularly good business prospects in the Kyushu-Yamaguchi 
region may be found in the areas of electronics and computers, 
architecture, design and construction, medical equipment and 
agricultural products.  In addition to Fukuoka city's multi-billion 
dollar man-made island project due to be completed in 2003, plans have 
been made to obtain funding from the Government of Japan to start 
construction of a new Fukuoka International Airport within the next ten 
years.  A separate plan to construct a Kyushu International Airport is 
also being discussed to serve as a full-fledged hub for western Japan 
and nearby Asian countries. 
      The Fukuoka Consulate works closely with the Fukuoka American 
Business Club, an organization of 32 companies which promotes the 
interests of U.S. firms in the region. 
 
            e.  Sapporo and the Hokkaido and Tohoku Regions 
 
      Northern Japan, consisting of six prefectures in the Tohoku region 
centering on Sendai, 250 miles north of Tokyo, and the island of 
Hokkaido, whose largest city is Sapporo, 700 miles from Tokyo, has a 
gross regional product (GRP) of $435 billion.  Northern Japan's direct 
imports from the U.S. totaled about $2 billion in 1993, but indirect 
imports via Tokyo and Kansai double this figure, to over $4 billion.  
Sapporo, Hokkaido's capital of 1.8 million people, and Sendai, with a 
population of almost 1 million people, are responsible for more than 
one-third of total sales in the region. 
      The home building products, processed foods, personal computer 
products and outdoor leisure goods (including RV's) are particularly 
promising import sectors in Northern Japan.  The region's two major 
international airports, in Sapporo and Sendai, continue with expansion 
plans.  In recognition of the growing economic ties with Russia's far 
east, another airport in Hakodate (Hokkaido) has added regular flights 
to Sakhalin.  In Tohoku, a dynamic high technology sector increasingly 
takes center stage, with growth rates well above the national average.  
Direct import container traffic is increasing in ports of Tomakomai 
(Hokkaido), Hachinohe, and Sendai. 
      U.S. Consulate-General Sapporo welcomes U.S. companies to explore 
there and other export opportunities in Northern Japan. 
 
            f.  Okinawa 
 
      Okinawa prefecture, population 1.2 million, consists of the sub-
tropical Ryukyu Islands 2 1/2 hours south of Tokyo by air.  Okinawa's 
economy depends heavily on tourism, government public investment, 
services and construction.  The prefectural government has invested 
heavily in strengthening the tourism infrastructure, and a number of 
additional high-quality resort hotels are in the planning and 
construction stage.  Okinawa offers U.S. suppliers in potential business 
opportunities in architecture and interior furnishings for resort 
hotels, and in related fields.  Companies specializing in 
outdoor/leisure activities, including sporting goods, marinas, boating 
and fishing equipment, and related services may also find attractive 
business opportunities in Okinawa.  In addition, the southern islands of 
Miyako and Ishigaki are the sites of large tourism development projects.  
Okinawans are particularly receptive to the introduction of American 
products, due in large part to the influence of the long U.S. 
administration of Okinawa which ended in 1972 and the still-continuing 
large U.S. military presence.  A major infrastructure project, the new 
Naha Airport terminal, is scheduled to begin construction in 1995.  U.S. 
companies are served by the U.S. Consulate-General in Urasoe City, on 
the main Okinawa Island. 
 
       8.  Special U.S. Department of Commerce Programs for Japan 
 
            a.  USDOC-MITI Trade Promotion Cooperation Program 
 
      The U.S. Department of Commerce-Ministry of International Trade 
and Industry Trade Promotion Cooperation Program (TPCP) was established 
in April, 1993 as an expansion of an earlier joint program to increase 
the level of U.S. exports in the Japanese market.  The TPCP enhances the 
independent trade promotion activities of the two governments and 
encourages the business communities of both nations to pursue trade 
opportunities aggressively.  The program, administered by CS Japan, 
MITI, JETRO and MIPRO, encompasses the following areas: 
 
      Data and Information Exchange 
      Market Research 
      Trade Events 
      Cooperation on Specific Trade Expansion Initiatives 
      Trade Facilitation Services 
 
In addition, representatives of both governments work together to 
promote and enhance the operation of the Japan Corporate Program. 
 
            b.  Japan Corporate Program 
 
      The Japan Corporate Program is a major initiative started by the 
U.S. Department of Commerce in 1991, to increase the number of American 
firms competing effectively in Japan.  Twenty companies, reflecting a 
cross-section of small, medium and large firms in a variety of 
manufacturing sectors across the United States, agreed to participate in 
the program.   
      Each company entered into a significant five-year commitment to 
develop its export market in Japan which included: (a) making four or 
more visits to Japan, including at least two by the chief executive 
officer, each year; (b) producing product literature in Japanese; (c) 
participating in at least one trade event in Japan each year; (d) 
establishing the necessary after sales service facilities for customers; 
and (e) modifying or developing products to meet the needs of Japanese 
end users.  The Department of Commerce likewise dedicated significant 
resources to assist the companies in their marketing efforts.  Under the 
joint USDOC-MITI Trade Expansion Cooperation Program, Japanese 
Government agencies involved in import expansion pledged to assist the 
market development efforts of these companies. 
      The commitments represent standards that other companies seeking 
to enter the Japanese market should strive to meet as essential to 
successfully entering the Japanese market.  In the final year of the 
program, with funding furnished by Senator Kerry's amendment to provide 
greater assistance to U.S. exporters to Japan, professional case studies 
of each JCP firm will be prepared.  These case-study 'wrap-ups' will be 
used to assess the program and, more importantly, to disseminate the 
lessons learned by these companies and give a road map for success in 
Japan to all interested U.S. companies. 
 
B.  Principal Growth Sectors 
 
      The Japanese economy remains slow.  At the same time, housing 
starts have been booming thanks to an extremely easy money policy and 
falling land prices; and the hot housing market has fueled sales of 
furniture, appliances, and amenities.  The influx of foreign made 
products, that are real bargains because of the strong yen, has sparked 
price wars in the retail market.  Japanese businesses have slimmed down 
by repaying debts, shedding personnel, and adjusting production.  
      Over the next several years, a multitude of new opportunities will 
be seen in regional markets outside Tokyo as price-pressured key buyers 
show increased receptivity to foreign-supplied goods:  in infrastructure 
buildup, as the tremendous economic growth of the late eighties brought 
a need for airports, information technology infrastructure, and housing; 
in leisure, as the Japanese worker finds more time and money to spend 
off the job; in retirement communities and health care with the 
"graying" of Japanese society (by 2025, Japan will have the highest 
percentage of the elderly in the world) as well as in meeting the needs 
of the handicapped; and in changing and broadening consumer tastes, as 
the Japanese consumer has become more cosmopolitan with greater exposure 
to foreign products.  Major opportunities are described below in greater 
detail. 
 
      1.  Big Spending By Japanese Power Firms 
 
      Japan's ten regional power companies and their telecommunications 
subsidiaries, all New Common Carriers (NCC's), collectively represent a 
regional market of over $36 billion annually over the next few years in 
purchases of non-fuel materials and equipment.  Under pressure to reduce 
electricity charges to customers, the power companies and their NCC's 
are actively expanding international procurement, seeking products and 
equipment that will help them streamline operations and provide cost-
effective, competitive services.  Fueling this movement is the recently 
revised Electric Utilities Industry Law, to be implemented starting 
April 1, 1996, which will introduce competition into the Japanese 
regional power industry.  The power companies are actively procuring 
generating, transmission and distribution equipment, and the NCC's are 
considering procurement of advanced information communications 
technologies, including frame relay, ATM switches, LAN's, and digital 
multiple channel access technologies.  Collectively, the power companies 
and their NCC's are engines of regional economic growth, investing in 
regional development projects.   
 
      2.  Japanese Government Procurement 
 
      Following recent Framework Agreement, there are potentially 
excellent opportunities for U.S. companies to sell to Japanese 
Government entities, especially in the fields of computers, 
telecommunications, medical equipment, and construction services. 
      In recent years, the Government of Japan has taken several 
measures to increase access for foreign suppliers to the government 
procurement market.  They have voluntarily expanded the number of 
agencies and lowered the threshold procurement amount covered under GATT 
rules.  In addition they have revised the following procurement 
activities so that they now:  1) hold annual seminars to provide 
anticipated procurement information; 2) provide more transparency 
through public announcements; 3) provide advance notice of single 
tendering procedures; 4) provide separate Kampo announcements for 
procurements under GATT; 5) provide an on-line system for INTERNET 
access to all GOJ procurement announcements at 
"http://www.jetro.go.jp/."; 6) use the overall-greatest-value evaluation 
method for telecommunications and medical technology products over 
800,000 SDRs; and 7) use complaint review procedures. 
      The new Action Program has opened a wide range of construction 
projects to open competitive bidding and now construction tenders are 
regularly announced in the "Kensetsu Kogyo Shimbun/Kensetsu Tsushin 
Shimbun".  Under the "WTO" Agreement which will go into effect, January, 
1995, 47 prefectures and 12 government ordinance-designated cities will 
improve opportunities for motivated U.S. companies to sell to the 
Japanese Local Governments.       
 
      3.  Recent Changes in Japanese Business Practices 
 
      Between 1952 and 1990, Japan's gross national product increased at 
a rate of almost 7 percent per year in constant 1985 dollars.  But 
following the overheated years of the late 1980's, the strong yen and 
the retrenchment in Japan's economy are now bringing major changes in 
some Japanese business practices.  These changes--in both the 
manufacturing and distribution sectors--will open new opportunities for 
aggressive U.S. companies.  These are some of these changes:   
 
            a.  Japanese Production Moves Offshore, Creating New  
            Opportunities in Japan 
 
      An increasingly super-charged yen in 1995 has exacerbated the 
difficulties faced by Japanese exporters.  Everyone is looking for ways 
to reduce costs, in many cases just to survive.  Faced with the world's 
highest operating costs domestically, more and more firms are 
establishing factories in countries with far lower labor and material 
costs such as China, Thailand and Indonesia.  They are also looking for 
lower-cost sub-component supply sources to lower their bottom line:  
Japanese manufactures are finding it harder to restrict their parts 
purchases to traditional keiretsu-family suppliers and are looking for 
ways to bring in high-quality, low cost components and materials from 
foreign suppliers. 
      This trend is creating many opportunities for the U.S. exporter.  
New industries are appearing in Japan as foreign goods become affordable 
-- and trendy among consumers.  Imported housing was for years 
considered an eccentric luxury for the wealthy.  Now, U.S.-style housing 
is recognized as a great value -- offering superior earthquake 
resistance, high quality, and plenty of room at an affordable price.  
Foreign direct marketing and catalog sales are yet other examples of 
industries that were all but unknown a few short years ago. 
      Foreign direct investment into Japan, still a paltry one-sixteenth 
of what Japan invests abroad, may be facing a brighter future as Japan's 
manufacturing center "hollows out."  Also, as older, more labor-
intensive manufacturing facilities close, scarce land becomes available 
for new uses.  For example, Sanyo Electric Ltd. recently completed an 
imported housing project on the site of one of its shuttered consumer 
electronics factories.  Unemployment, now at record highs in Japan, 
means that increasing numbers of highly skilled workers are available at 
competitive salaries.  On the public side, the government of Japan is 
also expected to further its efforts to grant tax breaks and other 
incentives to attract more overseas investors.  (see V.C. and VII.) 
 
            b.  Consumers Look for Value as Pricing and 
                Distribution Systems Change 
 
      In the early 1990's, Japan expressed its intent to reduce consumer 
prices to levels comparable to other OECD countries.  There has been 
little progress in reaching this goal.  Prices in Japan reflect very 
high costs of land, distribution, labor, and government regulations 
protecting employment in inefficient sectors.  US&FCS Japan estimates 
that Japanese consumer prices are on average 40% higher and prices of 
U.S. goods in Japan are typically 70% higher than in the U.S. 
      Japanese consumers remain remarkably uncomplaining of the high 
cost of consumers goods.  This is partly due to limited opportunities to 
compare domestic with overseas prices.  However, pinched by high costs 
they are leaning more towards discount stores, low-cost private brands, 
and imports.  The total sales volume of discount stores is now over 5 
trillion yen annually.  Major discount chains are introducing their own 
private brands usually sourced overseas. 
      Japan's high-priced department stores, which have suffered month-
on-month declines in sales for 39 consecutive months as of June 1995, 
are starting to change their traditional consignment sales practices.  
Although Japanese consumers want later store hours and more days open 
per year, these are still controlled by Japan's Large Scale Retail Store 
Law. 
      The distribution strangle hold by Japanese manufacturers is 
dissipating.  In the past, manufacturers and wholesalers agreed to 
rebate schemes, strategies and prices.   Manufacturers who perfected 
this system during an era of rapid economic growth are now finding it 
hard to show profits in an age of slower growth. 
      Japanese manufacturers of home electric equipment, toys, and food 
products are starting to abandon manufacturer-set pricing in favor of 
open pricing.  Price-cutting discounters and retailers armed with point-
of-sale computers do not demand the right to return unsold goods, but in 
return demand far lower prices from suppliers and are bypassing Japan's 
huge number of wholesalers, going directly to manufacturers for supply -
- including manufacturers outside Japan.  Department stores are also 
starting to procure from overseas suppliers, using their own buyers. 
 
      4.  Marketing in Synch with Changing Consumer Attitudes 
 
      Market surveys show that good marketing, not necessarily 
practicality, moves products.  U.S. companies should pay particular 
attention to the high-spending generation of Japanese consumers aged 
roughly in their 20's.  They tend to be single, live at home, own credit 
cards, have an extremely high percentage of disposable income (often 
100%), and have affinities for U.S.  music, food, and clothing.   
 
      5.  The Numbers of Elderly and Handicapped are Growing 
 
      DSR (Disabled, Senior citizen, Rehabilitation) products and 
services will explode in the next thirty years.  By the year 2020, one 
Japanese in four is expected to be 65 or older.  Demand for medical 
products, home health care, home living aids for the elderly, 
wheelchairs, etc. is a certainty.  Demands are increasing for U.S.-led, 
high-tech systems such as Electronic Data Interchange (EDI) and home 
oxygen and home infusion therapy.  DSR-related public infrastructure 
will increase -- Japan is thirty years or more behind the U.S. and 
Europe.  A Japanese law requiring public access for persons with 
disabilities could be a reality in a few years; and a Japanese version 
of the Americans With Disabilities Act could result in mega-
opportunities for competitive U.S. firms. 
 
      6.  Catalog Sales Will Do Well 
 
      Annual sales of Japanese mail order alone are now estimated to be 
in the $20 billion range.  Direct marketing, which grew at double-digit 
rates during the early 1990's, is expected to keep booming due to a 
supercharged yen and increased efforts on the part of U.S. catalog 
firms.  A U.S. Embassy-sponsored "American Catalog House," showcasing 
U.S. catalogs in Tokyo and Osaka in the second half of 1995, was so 
successful that an expanded six-month event is taking place in Tokyo and 
Osaka and plans call for roughly a dozen permanent ACH sites throughout 
Japan on a fully privatized bases.  The receptivity is a reflection of 
the fact that catalog sales, especially of imported products, are cost 
effective and convenient for the consumer:  the numbers of double-income 
families and working single women are large and increasing.		 
 
      7.  Japan's Consumers Demand High Quality and Affordable  
          Housing 
 
      Surveys have shown that Japanese houses are two to three times 
more expensive than equivalent American houses, and many Japanese people 
are not satisfied with either the quality or price of their current 
housing stock.  In contrast, imported American-style homes are regarded 
as offering high quality, low cost, and earthquake resistance.  The 
Japanese Ministry of International Trade and Industry (MITI) and the 
MITI-affiliated Japan External Trade Organization (JETRO) are now 
actively promoting the import of high quality, affordable houses from 
North America and Europe.  The Ministry of Construction (MOC) also has a 
goal of trying to cut the cost of housing 33% by 2000, and is 
encouraging imported houses and building materials.  The Hyogo 
Prefectural Government has announced a three-year plan to rebuild 
125,000 housing units destroyed in the Great Hanshin Earthquake of 
January 17, 1995.  Hundreds of U.S. companies in the building materials, 
manufactured housing, and home building industries are already starting 
to work with Japanese companies to build American-style 2x4 platform 
frame construction homes in Japan, despite the problem of regulatory 
barriers affecting some materials that will take several years to 
resolve.   
 
      8.  Value Added Foods 
 
      Access for imported agricultural products has never been better.  
Japan has eliminated many, if not most, of the agricultural market 
access barriers for which it was once famous.  Where previously, quotas 
and outright bans restricted the market for U.S. beef, citrus, fruit 
juice, cherries, apples, and ice cream, all of these markets have now 
been opened.  The Japanese market, contrary to popular belief, is 
substantially open to U.S. food products.  Already the largest importer 
of U.S. food products, Japan may increase its food imports from the U.S. 
by $1 billion per year each year until the turn of the century.  Export 
stars include processed beef, pork, ice cream, broccoli, asparagus, 
frozen vegetables, cherries, snack foods, fishery products and beer. 
 
C.  Government Role in the Economy 
 
      Japan's bureaucracy, created in 1868, predates Japan's first 
constitution.  Power is concentrated in 12 ministries and 10 
ministerial-sized agencies located within a 300 meter radius circle in 
downtown Tokyo.  All major policies are decided by the ministries in 
Tokyo, while prefectures and municipal governments merely implement 
them.  Their power over the Japanese economy comes from the thousands of 
required licenses, permits and approvals that tightly regulate business 
activity in Japan, and by informal, but in practice virtually 
compulsory, edicts called "administrative guidance." 
      Business in Japan traditionally has maintained very close 
relations with the bureaucracy and politicians.  Japanese politicians 
have depended on contributions by big business.  Big business also 
provides lucrative employment for high-level bureaucrats who leave 
government service.  Bureaucratic paternalism blocks new companies from 
entering the market and pushes up prices.  Politicians depend on 
bureaucrats to draft policies and are more akin to lobbyists to the 
bureaucracy than legislators or policy makers. 
      Until 1980, the Japanese Government controlled access to the 
market by allocating foreign exchange and by allowing foreign 
investments depending on the amount of technology transfer to Japanese 
companies.  Now the Japanese Government, in addition to enforcing 
regulations, is setting "industrial policy."  The popular view is that 
the proper role of a national government is to lead industry into higher 
value-added manufacturing.  The idea that the "market" should lead the 
people to a higher standard of living through its "invisible hand" is 
notably lacking.  Rather, the view is that the government's role is to 
remedy the defects of the market which may translate into a "protective 
attitude" when it comes to foreign competition and the potential 
introduction of new products from the outside.  Although Japanese 
businesses have prospered for many years in a tightly regulated 
environment, in Japan's current recession, they are now calling for 
deregulation because they can deal with foreign competition and that the 
government's over-regulation is only protecting inefficient small 
companies while forcing manufacturing to move off shore.  Japanese 
bureaucrats are now being criticized by the public for being arrogant, 
obstinate, and against deregulation because they want to protect their 
own interests. 
      While American companies do start at a serious disadvantage, it is 
increasingly possible to participate in the market after establishing a 
presence in Japan.  The Japanese Government has removed most of the 
legal restrictions on exports to and foreign investment in Japan, and is 
actively seeking ways to increase both.  The U.S. and Japanese 
governments continue to work on removing anti-competitive and 
exclusionary business practices through bilateral dialogue.   
      While the Japanese system is very different from the U.S. system, 
U.S. companies can be successful in adapting to it and make it work for 
them.  Roughly 220 of the U.S. Fortune 500 companies have a direct 
commercial presence in Japan, and 45 of the 50 leading U.S. exporters do 
so, as well.  The 700-company, 2400-member American Chamber of Commerce 
in Japan (ACCJ) is the largest overseas AmCham in the world, and its 40-
plus committees and sub-committees are highly visible as lobbyists for 
U.S. business interests.  U.S. Embassy officers are liaison to over 20 
of these committees, and work closely with the ACCJ on market access 
issues.  Some knotty regulatory barriers and discrimination do still 
exist and when a company cannot solve such problems by itself or through 
its legal advisers in Japan, the U.S. Government stands ready to help. 
	 
D.  Balance of Payments Situation 
 
      Japan's chronic trade surplus with the United States grew to $66 
billion in 1994 from $58 billion in 1993, while Japan's global current 
account surplus shrank modestly, from a record $131 billion in 1993 to 
$129 billion last year.  The stable global surplus when measured in 
dollar terms disguises a significant decline when measured in yen or 
volume terms.  The so-called "J-curve" effect resulting from the yen's 
24 percent appreciation during 1993 and 1994 disguised a 9 percent 
decline in the 1994 current account surplus when measured in yen. 
      The underlying real decline in Japan's current account surplus has 
begun to be reflected in the dollar totals as well.  For the first four 
months of 1995, the seasonally adjusted annualized surplus came to $113 
billion, 12 percent below the 1994 total, as imports grew more rapidly 
than exports. 
      Many private economists expect the downward correction in the 
current account to slow later in 1995, as the yen's renewed rise brings 
another round of "J-curve" effects.  Most economists expect the real 
correction in the underlying balance to continue, or perhaps even to 
accelerate as a result of the yen's recent rise.  The consensus of 
private forecasts is therefore of a continued decline in the dollar 
value of the surplus during 1996. 
 
E.  Infrastructure Situation 
 
      Japan has a fully developed physical infrastructure of roads, 
highways, railroads, airports, harbors, warehouses and 
telecommunications for distribution of all types of goods and services.  
Japan is also engaged in a large expansion of public works projects both 
to enhance the business infrastructure and to help stimulate the 
economy.   
      However, there remain major problems with Japan's physical 
infrastructure which impedes distribution of imports.  In part due to 
over-centralization in the major cities, high land prices, and 
regulations restricting large stores, Japan's retail stores are small, 
lacking adequate shelf space.  As a result, they require frequent 
stocking by wholesalers using small trucks that can navigate the narrow 
streets.  Together with the demand by manufacturers of just-in-time 
parts and components delivery from subcontractors, this results in huge 
numbers of trucks on inadequate urban roads and highways during daytime 
business hours, slowing traffic to a crawl in major urban centers.  In 
effect, a substantial portion of Japan's warehouses are the four-wheeled 
variety, using public land (the roads). 
      The great Hanshin earthquake devastated the busy cargo facilities 
in Kobe.  This has placed greater pressure on ports such as Yokohama to 
the north and pushed up inland freight costs.  This congestion and 
diversion of cargo may continue for through 1996. 
 
 
III.  POLITICAL ENVIRONMENT 
 
A.  Nature of Bilateral Relationship with the US 
 
      Japan's political relations with the United States are anchored in 
the U.S. - Japan Security Treaty, and characterized by close cooperation 
on many important bilateral and multilateral issues.  The U.S. - Japan 
security relationship is widely perceived as contributing to the peace 
and prosperity of both Japan and the Asia/Pacific region.  On many 
important foreign policy issues, Japan's policies complement those of 
the United States.  For example, Japan and the United States are 
cooperating closely through the so-called Common Agenda to tackle such 
global problems as AIDS, population growth, and protection of the 
environment.   
      It is the U.S. Government's intention not to allow tensions over 
the bilateral trade imbalance to erode the security and political 
dimensions of this vital relationship.   
 
B.  Major Political Issues Affecting the Business Environment 
 
      The realignment of the Japanese political system, which began in 
1992, is continuing.  It will probably take several years before all the 
consequences of the new electoral system for the Lower House of the 
National Diet, which was adopted in 1994, make themselves felt.  In the 
meantime, most observers believe that Japan could continue to be 
governed by coalitions as the political landscape continues to evolve.  
As a result, difficulties in coalition management could complicate 
passage and implementation of deregulation initiatives and 
administrative reform. 
 
C.  Brief Synopsis of Political System, Schedule for Elections, 
    and Orientation of Major Political Parties 
 
      Japan is a strong democracy in which basic human rights are well 
respected.  Under the constitution and in practice, the Emperor's role 
is essentially symbolic.  Japan has a parliamentary form of government.  
The head of government, the prime minister, is elected by Japan's 
parliament, the National Diet.  Elections to the Lower House, the more 
powerful of the Diet's two chambers, are held at least once very four 
years. 
      Upper House elections are held every three years, at which time 
half of the membership is up for election.  Most of Japan's political 
parties espouse moderate or conservative domestic and foreign policies. 
 
IV.  MARKETING U.S. PRODUCTS AND SERVICES 
 
      Marketing U.S. products and services is discussed in detail in the 
Japan Export Guide "Destination Japan:  A Business Guide for the 90's 
(Second Edition)" prepared by the U.S. Department of Commerce and 
contained in the National Trade Data Bank.  The following section (items 
A-N) is adapted and abridged from "Destination Japan." 
 
A.  Distribution and Sales Channels 
 
      1.  Consumer Goods 
 
      Difficulties with Japanese distribution are partly socio-cultural 
in nature.  Many Japanese are hesitant to disrupt longstanding 
relationships with suppliers -- even when a U.S. supplier can offer a 
vastly superior product at a far lower price.  While a retailer or 
wholesaler may fear retaliation from existing Japanese suppliers, they 
may also fear that a U.S. supplier will not make timely shipments or may 
lack after-sales service ability.  These doubts stem in part from a 
traditional lack of willingness to do business with strangers.  A 
presence in Japan and a commitment to develop relationships with 
Japanese business people is crucial to overcome this hesitancy. 
      About half of all consumer purchases are made at neighborhood "mom 
and pop" stores (with five or fewer employees) and these stores rarely 
carry imported goods:  they often have financial, ownership, or 
exclusive arrangements with major Japanese manufacturers, industrial 
groupings (keiretsu), or trading companies.  They also have insufficient 
space to maintain large inventories.  The number of smaller retailers is 
declining, however, and the emergence and growth of self-service 
discount stores and "superstores" is also helping to reduce the layers 
in the distribution system and make imported goods more price 
competitive.   
      Imported consumer goods have been traditionally sold at larger 
outlets such as department stores and discount houses.  Distribution is 
characterized by close relationships between importers and multiple 
layers of wholesalers and retailers.  Recently, direct importing -- 
bypassing trading houses and as many other intermediaries as possible -- 
is increasingly popular as a method of reducing costs. 
 
      2.  Capital Goods 
 
      Direct sales are more common for expensive, high-tech equipment.  
In some capital goods sectors, Japan has a number of small firms which 
function as subcontractors for larger manufacturers.  For example, in 
the auto sector most parts are supplied through a tight network of small 
and medium-sized keiretsu companies that have a long and close 'design 
in' working relationship with the manufacturer.  Small and medium-sized 
firms supply the majority of manufacturing industries with most of their 
products.  To sell to these firms, it is often necessary to work through 
several layers of wholesalers and develop relationships with product 
engineers and designers. 
 
B.  Use of Agents/Distributors; Finding a Partner 
 
      1.  Use of Agents 
 
      Establishing a presence in Japan is the best way to penetrate the 
Japanese market, but can be a prohibitively expensive strategy to 
launch.  The use of agents/distributors is a more realistic marketing 
strategy for the small/medium U.S. firm but requires extra care in the 
beginning. 
      Distributors in Japan usually cover a specific territory or 
industry.  Import agents are usually appointed as sole agents for the 
entire country.   While exclusivity may be necessary to ensure a strong 
commitment by the Japanese agent towards expanding sales, a U.S. company 
should not be pressured into giving up control of the market if there is 
doubt as to the ability or willingness of the Japanese company to expand 
sales of the product.  A limited term of representation, minimum sales, 
or qualitative indicators of sales efforts, may be recommended in 
exclusive agency contracts. 
      While the Japanese Fair Trade Commission has guidelines applicable 
to exclusive agency contracts, there are no statutory damages required 
upon termination of an agency contract.  However, replacing a Japanese 
agent or distributor is difficult in Japan if not handled extremely 
sensitively given the close-knit nature of business circles and the 
traditional distrust of foreign suppliers.   
 
      2.  Finding a Partner 
 
      A common mistake made by many U.S. firms is to try to use a list 
of importers as a means of first contact.  The Japanese prefer to do 
business with someone only when they have been properly introduced and 
meet face-to-face.  Instead, introduction by a "go-between" serves to 
vouch for the reliability of both parties.  This will help dispel 
reluctance on the Japanese side.  Appropriate third parties can be other 
Japanese firms, U.S. companies that have successfully done business in 
Japan, banks, trade associations, chambers of commerce, the U.S. 
Department of Commerce and the U.S. Embassy Tokyo (through Commercial 
Service Tokyo's Agent/Distributor Service), U.S. state representative 
offices in Japan, JETRO, or even Japanese government ministries. 
      A U.S. company should be selective in choosing a Japanese business 
partner.  This takes time for credit checks, study of the Japanese 
company's industry standing and existing relations with Japanese 
competitors, and building trust.  The Japanese party's willingness and 
ability to abide by contract terms is crucial. 
     Part of the difficulty in choosing a Japanese agent is assuring 
that they will devote serious attention to expanding the market share of 
the U.S. product.  A U.S. company should avoid a distributor that 
targets limited, high-price niches; is compromised by strong ties to an 
industry group ("keiretsu"); fails to compete directly with established 
Japanese products; or is not prepared to give the U.S. exporter volume 
sales. 
      To attract a Japanese business partner, a U.S. exporter must 
present an image of company dependability, innovation, superior quality, 
competitiveness, commitment, and be prepared to build personal 
relationships.  A U.S. company should show that it is well regarded in 
its industry; that it has researched the market; that it is prepared to 
respond to cultural requirements (e.g. by preparing high quality 
brochure in Japanese on the company and its products); and that it 
promptly responds to all inquiries from Japan in a professional and 
timely fashion.  This will help overcome reluctance to do business with 
a new foreign supplier.  Frequent, even daily, communication by fax or 
phone is crucial and regular visits to Japan are a must. 
 
C.  Franchising 
 
      The franchising industry is a fast-growing, multi-billion dollar 
business in Japan.  Originally developed in the fast food area, it has 
expanded into a variety of new sectors.  U.S. participation in the 
Japanese franchising industry is highly visible under familiar names 
such as McDonald's, Kentucky Fried Chicken, Mr. Donuts, Denny's, etc. 
      Because successful franchises tend to depend heavily on the long-
term investment capability and marketing expertise of a Japanese 
partner, most U.S. franchisors usually do not try to recruit actual shop 
operators in Japan directly from the United States.  Instead, U.S. firms 
concentrate efforts on finding a master franchisee, usually either a 
Japanese company, a joint venture between the U.S. franchisor and a 
Japanese company, or even a wholly-owned subsidiary of the U.S. company.  
The master franchise holder is then responsible for the actual 
recruitment of Japanese franchisees.   
      Special attention should be paid to expectation levels of both 
parties to avert future problems:  terms should be formalized for 
contractual rights and responsibilities, trade mark protection, and 
marketing methods. 
 
D.  Direct Marketing 
 
      Direct marketing (door-to-door sales, multi-level marketing, mail 
order, telemarketing, etc.), is an attractive sales channel for 
suppliers attempting to reach the increasingly affluent Japanese 
consumer while bypassing traditional distribution channels.  U.S.-based 
companies such as Amway, Avon, and Tupperware enjoy substantial sales of 
cosmetics, detergents, cleaning supplies, and other home and kitchen 
items.  With more women in the workforce and increasing demands on 
everyone's time, demand for shopping through the mail or by telephone 
has grown tremendously in Japan in recent years. 
      Direct marketing should not be considered an escape from Japanese 
expectations of customer service.  The Japanese customer demands top 
quality for every product and is meticulous about packaging and the 
condition of contents on arrival.  Returns and complaints can be common. 
      Mailing lists are relatively scarce and primitive, and 
organizations that have them are loathe to share.  Language and shipping 
times are also crucial issues to overcome.  U.S. companies aiming to 
enter this market should be prepared to make an investment in service 
functions -- a representative in Japan can act as a liaison with the 
U.S. supplier to handle receipt of claims, customs clearance, public 
relations, and the preparation of a Japanese-language catalog.  
Warehousing and delivery can also be managed by a local representative.   
 
E.  Joint Ventures/Licensing 
 
      1.  Licensing 
 
      Licensing product technology is an alternative with considerable 
appeal.  A firm can immediately contribute to its bottom line with 
little investment or direct cost.  What is often overlooked, however, 
are the missed opportunities and the indirect costs of licensing. 
      Licensing is a very limited form of market participation.  High 
potential returns from marketing and manufacturing efficiencies are 
lost, and very little market information is gained.  Often licensing 
agreements prove to be short-lived as the Japanese licensee improves 
upon the American product or technology and then exports the improved 
product back to the United States -- thereby becoming a major 
competitor.  Indirect costs of managing and policing the licensing 
agreement are also often overlooked.  There are many cases of licensees 
under-reporting sales and under-remitting royalty payments.  The wisdom 
of licensing technology depends on the status of a company's patents in 
Japan, together with the degree to which the company must disclose trade 
secrets to its licensee.  Licensing as a route of market entry into 
Japan has become increasingly unpopular with American companies in 
certain industries.  However, after considering the aforementioned 
risks, it may prove a desirable avenue for income generation.   
      The key to success in a licensing agreement is to have a partner 
whose goals coincide with those of the U.S. company.  The contract 
should provide for a cross-technology exchange between licensor and 
licensee.  The U.S. company should maintain close contact with the 
licensee and keep current on the Japanese market by visiting Japan 
regularly.   
      Royalties paid by the Japanese licensee to the U.S. licensor are 
subject to a 20 percent withholding tax which may be reduced to 10 
percent if the necessary documentation is filed under the U.S.-Japan Tax 
Treaty. 
      According to the Foreign Exchange and Foreign Trade Control Law, 
foreign companies wishing to grant a license to an independent Japanese 
corporation, its own wholly-owned subsidiary, or joint venture 
corporation, in order to manufacture in Japan must notify the Ministry 
of Finance through the Bank of Japan within 15 days of the execution of 
the licensing agreement.  However, notification must be made in advance 
of the execution of the licensing agreement in those cases involving the 
transfer of specially regulated and/or designated technologies, in which 
case a report must be filed with the Ministry of Finance and other 
appropriate Japanese ministries. 
      Special restrictions apply to designated technologies.  In 
addition, if the license agreement is exclusive, extends beyond one 
year, and the licensee is a competitor with a 10 percent or greater 
market share and/or is ranked third or higher in the respective Japanese 
industry, notification must also be given to the Japanese Fair Trade 
Commission (JFTC).  Additionally, the export of any form of technical 
data from the U.S. abroad is subject to U.S. export control law, so a 
thorough investigation of the Export Administration Regulations should 
proceed the signing of any licensing agreement. (also see section VI.D. 
below) 
 
      2.  Joint Ventures 
 
      The advantages of establishing a joint venture in Japan are 
greater ease in identifying and hiring local personnel and securing 
immediate access to a distribution system and customers.  This entry 
vehicle will however require a U.S. company to share profits and control 
with its Japanese partner.  As with selecting agents, distributors or 
licensees in Japan, trust, communication and common interests with the 
Japanese partner are crucial.   
      Joint venture partnerships involving technology transfer or 
license agreements with a Japanese joint venture partner have the same 
pitfalls as a straight license.  The value of a joint venture 
arrangement may diminish as the Japanese partner improves on or becomes 
less dependent on the technological innovations the U.S. company 
developed.  Exporting American-made products, as opposed to joint 
ventures that manufacture in Japan, helps reduce the risk of releasing 
proprietary know-how which gives the U.S. company a competitive edge.   
      It is possible to set up a joint venture in Japan through an 
unincorporated, contractual joint venture; acquiring stock by consent of 
an existing corporation; or through the incorporation either in the 
United States, or more commonly in Japan, of a new company in which the 
Japanese and U.S. corporations mutually decide upon management control 
and the roles and responsibilities of each party.  The Ministry of 
Finance (through the Bank of Japan) must be notified.  If the joint 
venture is intended to last more than one year, the joint venture 
agreement must be submitted to the Japanese Fair Trade Commission for 
review within 30 days after its execution.   
 
F.  Steps to Establishing an Office 
 
      Establishing an office in Japan can prove to be an expensive 
proposition primarily because office space is very costly (Tokyo is 3.4 
times as high in New York) and salaries for Japanese nationals are high.  
Detailed information on the mechanics of setting up and maintaining an 
office in Japan can be found in the publication "Setting Up an Office in 
Japan" of the American Chamber of Commerce in Japan (Phone:  +81/3/3433-
5381, Fax:  +81/3/3436-1446) and other sources listed in "Destination 
Japan."  This section summarizes the formalities for setting up four 
types of offices. 
 
      1.  Representative Office 
 
      A U.S. company that wishes to collect information and/or 
facilitate contacts in Japan should establish a representative office.  
This liaison office can obtain market data, provide information, and 
provide necessary promotional and service support.  A representative 
office is not subject to Japanese taxes and it is not necessary to 
obtain special approval.  However, a representative office must not 
involve itself in commercial transactions or generate income, therefore 
it can not handle orders directly.  The liaison office may provide 
guidance and support to an agent, and manage all marketing activities 
except for the actual sale. 
 
      2.  Branch Office 
 
      A branch office of a U.S. company can engage in trading, 
manufacturing, retailing, services, or other business.  A branch office 
may take and fill orders and carry out a full marketing program, 
including arranging for advertising, recruiting a sales force, and 
performing all necessary promotional activities.   A branch is liable 
for payment of Japanese taxes.  The branch must appoint a resident 
representative in Japan and must register with the Legal Affairs Bureau 
of the Ministry of Justice.  In addition, the establishment of a branch 
office is considered a direct investment under the Foreign Exchange and 
Foreign Trade Control Law requiring notification to the Ministry of 
Finance through the Bank of Japan within 15 days after the establishment 
of the branch office.  As with joint ventures, for certain designated 
sectors, Ministry of Finance notification must be made prior to the 
establishment of the branch office; investment in other designated 
sectors such as broadcasting or telecommunications services may be 
restricted or prohibited. 
 
      3.  Incorporation in Japan (Subsidiary) 
 
      An alternative to a branch office is a wholly-owned corporation.  
As in the above options, certain sectors are restricted.  Setting up a 
wholly-owned subsidiary will involve more time and expense, but it can 
offer an effective means to guarantee better protection for proprietary 
information, obtain credit, and penetrate markets which have subtle but 
substantial barriers to imports.  Moreover, there is a perception in 
Japan that a company with subsidiaries is both more committed and more 
substantial and this perception can serve as a powerful selling-point 
for that firm. 
 
      4.  Jointly Owned Office 
 
      A fourth approach is to pool resources of several firms which have 
complementary product lines.  Such a group might establish a marketing 
association, consortium, or jointly owned export management company, and 
set up a sales and service branch or subsidiary office in Japan.  This 
operation may take the form of a representative office which handles 
contacts with agents, distributors, and customers.  Considering the 
importance of brand image in Japan, group members may wish to consider 
adopting a group logo which would be a universally recognized and 
accepted identity for their product line. 
 
5. Guidance for Investing in Japan 
 
      Foreign takeovers (mergers and acquisitions) of Japanese companies 
remain few.  The number of takeovers and average value of each case 
(officially announced cases only) have increased from 18 averaging •549 
million per case in 1990 to 43 cases averaging •13,276 million per case 
in 1994.  During the past five years, takeovers by U.S. firms have 
represented the majority of all acquisitions, and the targets are 
becoming larger. 
      Land costs fell in 1994 for the fourth consecutive year declining 
an average of 9.3 percent for residential property and 15.4 percent for 
commercial property in the Tokyo-Osaka-Nagoya metropolitan areas. 
      There is a significant over supply of office space in the Tokyo 
and other metropolitan areas and such a trend will, most likely continue 
through 1996.  The vacancy rate for office buildings in the 23 wards of 
Tokyo, which was 2.9 percent in 1992 increased to 9.3 percent in March, 
1994.  This trend has fostered a tenant's market where larger spaces, 
and lower costs are a refreshing change for the investor in Japan.  As a 
consequence of this trend, rental rates are falling to levels that are 
more reasonable, and more companies are expected to consolidate their 
operations, seek more convenient locations or choose higher grade 
buildings.  
      Average condominium prices in Tokyo and its vicinity fell from 
•44.9 million in 1993 (annual average) to •40.8 million in May, 1995.  
The average size of a standard condominium home has increased from 63.8 
square meters in 1993 to 66.2 in 1995.  The average condominium price is 
roughly 5.5 times the average annual income in 1995, as compared with 
6.5 times in 1993.  
      Despite the rise of the Yen against the dollar, lower priced land, 
lower commercial rents and the severe financial crunch affecting many 
Japanese companies now provide U.S. companies with excellent 
opportunities to set up, expand or purchase businesses in Japan.  Also, 
the tightening of credit available to small and medium sized businesses 
in Japan offers new opportunities for mergers and acquisitions 
especially of wholesalers which can be the key to product distribution 
in Japan. 
      U.S. companies should also carefully examine the Japanese Ministry 
of International Trade & Industry's new programs 
for promoting imports and foreign investment into Japan including: loan 
programs through the Export-Import Bank of Japan and the Japan 
Development Bank, the entry-level business support programs being 
provided by JETRO and the Foreign Investment in Japan Development 
Corporation (FIND).  It should be noted that JETRO set up five Business 
Support Centers in the last two years to offer various assistance to 
new-to-market foreign firms in their initial market development 
activities: The Centers are located in Tokyo, Yokohama, Nagoya, Osaka, 
and Kobe.  A total of 67 fully-equipped mini offices are available free 
of charge on a temporary basis.  They provide not only free office 
space, but counseling, business library, data base terminals, conference 
halls, etc. 
 
G.  Selling Factors/Techniques 
 
      Personal contact with customers is very important.  A visiting 
U.S. representative or resident agent in Japan should accompany a 
Japanese agent or distributor on visits to existing -- or potential -- 
Japanese customers.  Making sales calls demonstrates commitment to the 
market and is also an excellent way to obtain market feedback. 
      Too many Japanese-American business relationships sour after a 
successful honeymoon period.  A common mistake made by U.S. companies in 
Japan is failure to provide adequate support for their Japanese business 
partner after initial successes.  It is generally important to prevent a 
distributor from implementing a conservative, low-volume, high-markup 
marketing strategy that will protect their own interests while leaving 
the U.S. product's full sales potential badly undeveloped. 
      Part of selling in Japan is knowing how to negotiate and maintain 
relationships with Japanese.  Japanese language skills can be 
invaluable, as can a thorough background in Japanese culture and 
etiquette.  It is important to be honest and direct, while avoiding 
appearing overbearing.   
      Initial contacts between Japanese firms are usually formal and 
made at the executive level, while more detailed negotiations are often 
carried out at the working level.  Typically, the first meeting is to 
get acquainted, establish the broad interest of the calling party, and 
allow both sides an opportunity to "size each other up."  A series of 
meetings with a large number of Japanese company representatives is 
common.  Business negotiations may proceed slowly, as the Japanese side 
may prefer no agreement over being criticized later for making a 
mistake.   
      While many Japanese business executives speak some English, a 
skilled and well-briefed interpreter, while expensive, often prevents 
communication problems.  Though some U.S. firms do business in Japan 
without a signed contract, written contracts between U.S. and Japanese 
firms have become a universally accepted practice in Japan:  they 
satisfy tax, customs, and other legal requirements.  Japanese companies 
prefer short, general contracts, while U.S. companies prefer to spell 
out the rights and obligations in detail.  A contract should be viewed 
as part of a greater effort to create an understanding of mutual 
obligations and expectations, rather than a tool in case of a lawsuit. 
 
H.  Advertising and Trade Promotion 
 
      1.  Advertising 
 
      Because many products from the United States fit a cultural or 
industrial environment which may not yet exist in Japan, consumer 
education of the product's purpose, use, and quality may be necessary.  
The most cost effective method of advertising by small to medium size 
new-to-market U.S. companies in Japan is often to advertise in one of 
Japan's 2,250 weekly or monthly popular magazines, or in one of Japan's 
many industrial daily, weekly or monthly newspapers and trade journals.  
Only large multinational U.S. companies can afford to place ads in 
Japan's five major national daily newspapers or place commercials on 
Japanese television (all of which accept advertisements or commercials 
for either national or regional coverage).  Regional and local 
newspapers and television stations, based in prefectural capitals, and 
sports daily newspapers, are less expensive.  While Japan has relatively 
few radio stations (Tokyo, for example, has only four AM and six FM 
commercial stations), radio advertising potential may be worth 
investigating. 
      Much of Japan's broadcast and print media do not deal with 
advertisers directly but go through Japan's top five advertising 
agencies:  Dentsu Inc., Hakuhodo Inc., Tokyu Agency International Inc., 
Daiko Advertising Inc., and Asatsu Inc.  In general, "mood" or "image" 
advertising are generally thought to sell better in Japan; hard-sell, 
"wordy" messages and comparative or combative advertising may be 
considered bad taste.   
      Another mass advertising option is transit advertising.  Railroads 
are the primary means of transportation for commuters in major cities 
and carry over 21 billion passengers annually.  Transit advertisements 
are located either inside commuter railcars or buses or in stations.  
Ads inside trains and buses include hanging flyers, framed posters, and 
stickers.  The major ad companies control space, as with the other 
media. 
 
      2.  Trade Promotion 
 
      It is key for US exporters of all kinds of good and services to 
get into the Japanese trade event circuit -- not only in Tokyo -- but in 
the huge regional economies and industrial centers, where 65 percent of 
Japan's over 1,000 international conferences, seminars and trade shows 
take place.  These events are being attended more and more by regulatory 
officials and decision makers from all throughout the Asian region.   
      U.S. companies should also consider U.S. Department of Commerce or 
state- or industry organization-sponsored trade shows and trade 
missions, as well as use of the U.S. Trade Center in Tokyo and other 
available U.S. Government facilities such as the U.S. Information 
Services' American Centers in Osaka, Nagoya, Fukuoka and Sapporo for 
their individual demonstrations, seminars, meetings and receptions.   
 
I.  Pricing Product 
 
      Until recently, the acceptance of any product in Japan was based 
on attributes, quality, and related service, price.  Japanese consumers 
remain willing to pay more for superior quality, but today are starting 
to look for better value.   
      Distribution mark-ups often cause imported items to be priced at 
levels uncompetitive with Japanese domestic products, even though the 
landed price of the imported product was comparable or lower.  However, 
products that compete on the basis of image may be negatively impacted 
by bargain prices, as this tends to cheapen the image of these products 
in the minds of Japanese consumers.  In setting an export price, it is 
also important to take into account any costs the exporter will be 
assuming in the Japanese market. 
      Japanese manufacturers of consumer goods traditionally set prices 
for each level of the distribution channel and enforced compliance using 
complicated rebate systems.  Such price maintenance is now under heavy 
pressure from consumers (wanting lower prices), the Japan Fair Trade 
Commission (investigating unfair trade practices), and manufacturers 
themselves (for whom massive rebates are increasingly burdensome).  
Under a fully open price system, wholesalers and retailers will be able 
to decide prices independently.  The return of unsold goods will tend to 
reduced in order to offset lower margins by manufacturers.  The 
distributor's role in selecting and purchasing items will become more 
important, and methods of discounting and advertising are bound to 
change as well. 
 
J.  Sales Service/Customer Support 
 
      All service (before, during, and after the sale) and customer 
support are critical in Japan and should be considered part of the 
"product package."  Every effort should be made to answer technical 
questions and make sure that shipments are made on time and handled with 
the greatest of care.  Strict arrangements for quality control (both 
before and after shipment) should be made by the exporter.  If goods are 
damaged in transit it does not matter who is at "fault:"  Japanese 
importers will simply take their business elsewhere next time.  The best 
way to ensure quality control is for a U.S. exporter to establish an 
office in Japan.  If this is not possible, arrangements for customer 
support should be made either with a Japanese distributor or an 
acceptable third party.   
 
K.  Selling to the Government 
 
      Japanese government entities purchase a wide range of goods from 
telecommunications equipment to other, less sophisticated products and 
supplies.  Recent changes in Japanese government procurement as a result 
of the Framework Negotiations and the GATT Uruguay Round have greatly 
expanded the scope of contracts that U.S. suppliers can bid on. 
      In most cases, Japanese government tender solicitation documents 
are in Japanese only with only brief English-language summaries.  Tender 
documents must be submitted in Japanese only  (Nippon Telegraph and 
Telephone (NTT) tenders may be submitted in English).  To facilitate 
information gathering and applications for tender documents, it is 
strongly recommended, although not mandatory, that the U.S. supplier 
appoint an agent or representative in Japan. 
      To become a qualified supplier, firms and/or their agents must 
apply for qualification screening.  Each Japanese government agency 
specifies in the Kampo (the Japanese Government's Official Gazette) an 
open application period prior to the beginning of the Japanese fiscal 
year which starts April 1. 
      Specific tender notices are published in the Kampo generally fifty 
days prior to the time of bid.  Under the provisions of the GATT 
Procurement Code, foreign companies are permitted to bid on specific 
invitations prior to qualification provided there is sufficient time to 
complete the qualification procedures. 
      U.S. Suppliers can find summaries of translated tender 
announcements on the Economic Bulletin Board (EBB), the Commerce 
Business Daily, the National Trade Data Bank, and a new JETRO Database 
which is available on the Internet at "http:/www.jetro.go.jp/".  U.S. 
Department of Commerce district offices can also assist potential U.S. 
bidders by identifying firms that provide translation services. 
 
L.  Protecting Your Product from Intellectual Property Rights 
    Infringement 
 
      Please see below Section VII, A, 7 in this document. 
 
 
M.  Product Liability Law 
 
      The Product Liability Law (PL Law), originally passed in June 
1994, will take effect in Japan on July 1, 1995.  All manufactured or 
processed goods are covered by the PL Law.  The Law stipulates that 
lawsuits must be filed within 3 years after an injury or up to 10 years 
after the product was delivered to the purchaser.  The PL Law applies 
not only to Japanese manufacturers and importers but also foreign 
manufacturers if contracts with Japanese importers/agents define 
responsibilities in case of product liability problems.   
 
N.  Need for a Local Attorney 
 
      A  U.S. company resident in Japan is not legally required to use a 
Japanese attorney for filings, registrations, contracts or other legal 
documents, which can be prepared by in-house staff, but retaining a 
competent Japanese attorney (bengoshi), patent practitioner (benrishi) 
or other legal professional is a practical necessity.  A U.S. company 
not resident in Japan should also retain competent Japanese counsel.  
Patents and trademarks must be filed through a Japanese agent, which 
should be a licensed attorney or patent  
practitioner. 
 
 
V.  LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT 
 
      The best prospects for U.S. exporters of U.S. products and 
services including agricultural products are listed below.  Best 
prospects in industry sectors are ranked according to the estimated two-
year growth in U.S exports (1994 - 1996).  Best prospects in 
agricultural sectors are not ranked. 
 
The exchange rates used in the tables throughout this section are as 
follows: 
 
1994:  102 Yen per Dollar 
1995:   90 Yen per Dollar 
1996:   90 Yen per Dollar 
 
Industrial Best Prospects (described in detail in Section A. below) 
                                             (Millions of U.S. Dollars) 
Rank  Sector  Title                    Market Size   U.S Imports 
       Code 
 
1   CPT     Computers and Peripherals           41,100      4,400 
2   ELC     Electronic Component                40,400      7,900 
3   AUT     Automobiles/Light Trucks/Vans      122,242      6,555 
4   MED     Medical Equipment                   15,989      3,300 
5   CSF     Computer Software                    6,300        650 
6   ACE     Arch./Eng./Constr. Services        910,800        200 
7   APP     Apparel                             91,220      3,500 
8   PAP     Paper and Paperboard                50,250        933 
9   TEL     Telecommunications Equipment        22,118      1,089 
10  PET     Pet Foods and Supplies               2,497        460 
11  APS     Automotive Parts & Accessories     142,949      1,174 
12  LAB     Laboratory and Scientific Instr.     4,000        760 
13  PVC     Pumps, Valves/Compressors            5,341        453 
14  HCG     Household Consumer Goods            18,316        216 
15  BLD     Building Products                   49,578        877 
16  ACR     Air Cond/Refrigeration Eq.          23,585        182 
17  FUR     Furniture                           30,779        323 
18  POL     Pollution Control Eq.               16,670         70 
19  ELP     Electrical Power Systems            29,900      1,093 
 
Agricultural Best Prospects (described in detail in Section B. below) 
                                            (Millions of U.S. Dollars) 
Rank  Sector     Title                 Market Size   U.S Imports 
      Code 
 
N/A   FOD   Fresh Vegetables                    17,819        500 
N/A   FOD   Beef                                 1,600        464 
N/A   FOD   Frozen Vegetables                      595        232 
N/A   FOD   Pork                                 1,855         90 
 
 
A.  Industry Sectors 
 
PART 1. TITLE 
 
1 - Computers and Peripherals (CPT) 
 
PART 2. NARRATIVE 
 
Market access for U.S. mainframe computers remains a problem -- 
particularly in the government procurement market.  The market for large 
mainframe computers and peripheral systems is expected to grow 3-4% in 
1995.  Market access for U.S.-made PC's has improved drastically in 
recent years.  PC's and workstation sales in Japan continued to grow in 
1994, while sales of mainframes and mini-computers were down.  This 
trend is expected to continue through 2000.  The Multimedia 
PC's/Workstation subsector will grow 15-20% annually until 1997.  
Japanese competitors are expected to increase their focus on 
client/server and parallel processing systems -- an area in which U.S. 
suppliers currently lead the market.  The most promising subsectors are 
Workstations, Personal Computers, and Computer Peripherals.  Major local 
competitors are NEC, Fujitsu, Toshiba, Hitachi, Mitsubishi, and Sharp.  
 
PART 3. DATA TABLE 
                        Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size         39,060   41,100   43,300 
 
B.  Total local production    49,600   51,100   52,600 
 
C.  Total exports	            16,030   16,800   17,600 
 
D.  Total imports             5,490     6,800    8,300 
 
E.  Imports from the U.S.     3,600     4,400    5,300 
 
The above statistics are unofficial estimates    
 
 
PART 1. TITLE 
 
2 - Electronic Components (ELC)  
 
PART 2. NARRATIVE 
 
The electronic components market in Japan is expected to grow 
approximately 10.4% in 1995.  Major market segments such as 
semiconductors and flat panel display devices will continue to show 
strong demand.  The market for other passive components will remain flat 
due to the overall slump in the consumer market.  There is a potentially 
fast-growing market for U.S. semiconductors in the multimedia subsector, 
although continued market access efforts by both U.S. suppliers and 
Japanese semiconductor users are essential.  The Japanese semiconductor 
market is expected to grow 13-15% annually, and the liquid crystal 
display (LCD) panel market is expected to grow 25-30% annually through 
1997.  Despite tough competition in the Japanese market, electronic 
components is one of the world's largest and most attractive markets for 
U.S. suppliers.  The most promising subsectors are semiconductors and 
Liquid Crystal Display Devices/Panels with predicted 1996 sales of 
$31,500 million and $8,500 million, respectively.  Major local 
competitors are NEC, Hitachi, Fujitsu, Toshiba, Matsushita, and 
Mitsubishi.   
 
PART 3. DATA TABLE 
	                  Millions of U.S. Dollars 
 
            1994   1995   1996 
 
A.  Total market size         36,580   40,400   44,500 
 
B.  Total local production    83,900   89,500   93,000 
 
C.  Total exports             62,900   68,000   71,000 
 
D.  Total imports             15,580   18,900   22,500 
 
E.  Imports from the U.S.      6,300    7,900    8,900 
 
The above statistics are unofficial estimates 
 
 
PART 1. TITLE 
 
3 - Automobiles (AUT) 
 
PART 2. NARRATIVE  
 
Japan is the second largest motor vehicle market in the world.  Eleven 
domestic manufacturers and over thirty foreign auto makers compete to 
sell more than 6.5 million cars and trucks each year.  No tariffs or 
quotas exist although, some regulatory restrictions on imports exist.  
In addition, language, culture, laws and the high price of land, does 
present special challenges for importers.  In 1994 imported car sales, 
despite an overall downturn in the Japanese market, rose dramatically.  
Growth of sales of imported cars has been brisk over the past five years 
(albeit from an extremely low base).  U.S. automakers have substantially 
increased their commitment, marketing and investment efforts in Japan, 
which are beginning to show positive results.  More and more 
manufacturers are stepping up their investments and marketing activities 
in an effort to tap the vast potential of the Japanese market.   
 
The automobile industry is the largest and most complex element of the 
U.S. trade relationship with Japan.  The U.S./Japan bilateral trade 
deficit in the automobile sector is $36.1 billion and is expected to 
reach $39.4 billion in 1995.   
 
High-level U.S. Government interest in this sector ensures windows of 
opportunities for U.S. firms as market-opening efforts are negotiated.  
Throughout 1994 the U.S. and Japanese governments have been negotiating 
under the Framework Talks to eliminate non-tariff trade barriers related 
to automobiles and auto parts.  As of June 1995 the results of these 
talks have not been conclusive.   
	 
PART 3. DATA TABLE 
	                  Millions of U.S. Dollars 
 
              1994   1995   1996 
 
A.  Total market size        97,599   122,242   124,986 
 
B.  Total local production  140,282   158,986   158,986 
 
C.  Total exports	           57,900    55,005   54,000 
 
D.  Total imports            15,217    18,261   20,000 
 
E.  Imports from the U.S.     4,627     6,555   70,000 
 
The above statistics are unofficial estimates  
 
 
PART 1. TITLE 
 
4 - Medical Equipment (MED) 
 
PART 2. NARRATIVE 
 
This is one of the few sectors where the U.S. still enjoys a trade 
surplus with Japan.  U.S.-Japan MOSS (market-oriented sector-selective) 
Talks on Medical Equipment and Pharmaceutical Sectors 1985, have helped 
simplify import procedures and accelerate introduction of new products 
into the national health insurance reimbursement system.  The U.S.-Japan 
Framework Agreement on Government Procurement of Medical Technologies of 
November 1, 1994, should provide increased access to the important 
government-owned hospitals market for U.S. suppliers, as well as other 
foreign suppliers.  As a result, imports, which currently account for 
about 30 percent of the total market, should expand 5-10 percent 
annually in the foreseeable future; higher than the estimated growth of 
the total market by 3-5 percent a year.  U.S. companies currently supply 
approximately two thirds of the import market.  U.S. suppliers are 
especially competitive in the areas of implants including pacemakers, 
artificial heart valves and artificial joints; other therapeutic devices 
including anesthesia equipment and laparascopic surgery devices; 
catheters; diagnostic imaging devices including high quality ultrasound, 
CT and MRI equipment.  While there is no local producer of pacemakers 
and artificial heart valves, there are strong domestic and third-country 
competitors in the area of diagnostic devices.  These competitors 
include Toshiba, Hitachi and Shimazu of Japan and Siemens and Philips 
from Europe.  Olympus Optical Co. of Tokyo, one of the largest camera 
manufacturers in Japan, dominates the market of flexible endoscopes, and 
Sakura Finetechnical of Tokyo enjoys a lion's share in the sterilizer 
market. 
 
PART 3. DATA TABLE 
                          Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size         13,529   15,989   16,589 
 
B.  Total local production    12,255   14,300   14,733 
 
C.  Total exports              3,137    3,667    3,767 
 
D.  Total imports              4,412    5,356    5,622 
 
E.  Imports from the U.S.      2,647    3,300    3,533 
 
The above statistics are unofficial estimates.   
 
 
PART 1. TITLE 
 
5 - Computer Software (CSF) 
 
PART 2. NARRATIVE 
 
The Japanese computer software market -- in which U.S. suppliers are 
extremely competitive -- could double by 1997.  Computer software 
products include ready-made software such as application software 
packages, and custom made software.  Strong growth for PC software 
products, including CD-ROM, is expected to continue for the next five 
years.  PC software now accounts for 45% of the entire software market, 
and retain its leading position.  The custom software market for large 
and mid-range computers and workstations are expected to grow annually 
at 5-7% from 1995 to 1998.  Packaged software will show annual growth of 
20% during this same period.  As open network systems begin to spread 
throughout Japan, the software market will expand correspondingly.  
Demand for software for computer aided design (CAD) systems and 
accompanying workstations will grow steadily in conjunction with growth 
of the electronics market.  Most promising subsectors are PC packaged 
software, CD-ROM Software, and CAD software.  Major local competitors 
are NEC, Fujitsu, Just System, and ASCII. 
 
PART 3. DATA TABLE 
                         Millions of U.S. Dollars 
 
            1994   1995   1996 
 
A.  Total market size         5,400   6,300   7,200 
 
B.  Total local production    4,870   5,600   6,290 
 
C.  Total exports             * n/a   n/a   n/a 
 
D.  Total imports               530     700     910 
 
E.  Imports from the U.S.       480     650     850 
 
The above statistics are unofficial estimates.    
Software market here excludes service market. 
 
* = negligible/low.     
 
 
PART 1. TITLE  
 
6 - Architectural/Construction/Engineering Services (ACE) 
 
PART 2. NARRATIVE  
 
Japan's construction investment is currently the largest in the world.  
This sector creates diverse opportunities for a variety of firms, such 
as design/consulting, general contractors, and construction material 
suppliers.  The latter may be understood to include furniture, air-
conditioning, telecommunication equipment, and even medical equipment 
for hospital projects.  It is vital that US firms segment construction 
projects in promoting their goods or services.  In January 1994 the 
Government of Japan initiated the Action Plan, through which 
approximately $22 billion of construction projects per annum are 
publicized.  The Action Plan is a system designed to open Japan's 
construction market through fair and transparent procedures.  Commercial 
Section Tokyo estimates over 1,000 procurements will be placed through 
Action Plan procedures in calendar year 1995.  Action Plan projects may 
offer the best prospect for U.S. firms, but competition among local and 
foreign competitors is severe.  Increasing competition from Korean 
general contractors, European design firms, and ASEAN construction 
materials suppliers is expected.  In general, high-productivity 
construction and engineering methods, creative design work, including 
airport design, resort/theme park development, landscaping, interior 
design, and price-competitive construction materials are expected be of 
particular interests in the Japanese market.  Anticipated deregulation 
of construction materials and methods opportunities should accelerate 
accordingly.  In addition, Commercial Section Tokyo tracks major 
overseas ACE opportunities financed by Japan's $13 billion yearly 
Official Development Assistance (ODA) fund for third world countries. 
 
PART 3. DATA TABLE 
                       Millions of U.S. Dollars 
 
           1994   1995   1996 
 
A.  Total sales                 797,800   910,800   937,100 
 
B.  Local sales by local firms  798,100   920,000   937,300 
 
C.  Overseas sales by local firms   500   500           700 
 
D.  Sales by foreign owned firms    200   300           500 
 
E.  Sales by U.S.-owned firms       150   200           300 
 
The above statistics are unofficial estimates. 
 
 
PART 1. TITLE 
 
7 - Building Materials (BLD) 
 
PART 2. NARRATIVE 
 
Because of current economic conditions, the total Japanese building 
products market is expected to follow the 1994 trend of a decline in 
construction of commercial and office buildings.  However, housing 
starts have continued at a high rate of 1.5 million annually, almost 
half of which are single-family wooden homes.  U.S. imports are expected 
at a minimum to hold steady with a potential for growth thanks to 
increased price competition for building materials, as contractors 
attempt to benefit from the sharp appreciation of the Japanese yen 
against the U.S. dollar by importing.  U.S. 2x4 housing packages are 
also attracting a lot of attention among both Japanese home builders and 
potential home owners for offering high quality, affordability, and wide 
variety.  In addition, the Ministry of International Trade and Industry 
(MITI) is actively promoting imported housing in an effort to increase 
Japan's imports.  Therefore, imports of U.S. residential building 
products such as windows, doors, flooring materials, kitchen cabinets 
are expected to increase.  Major competitors for U.S. products are 
Canada, Scandinavia, and Asia.  Major barriers to U.S. products are 
regulations e.g. the Building Standards Law, JIS and JAS standards, and 
fire regulations.  The Government of Japan (GOJ) is now considering 
deregulation in these areas, although it may take several years.  Also, 
due to the low productivity of Japanese carpenters, U.S. companies will 
be expected to bring experienced specialists from the United States to 
provide training, requiring the GOJ to rethink its current restrictive 
visa policy. 
 
PART 3. DATA TABLE 
	                  Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size         91,430      91,220     91,810 
 
B.  Total local production    78,430      78,220     78,610 
 
C.  Total exports	             1,060       1,020      1,020 
 
D.  Total imports             14,060      14,020     14,220 
 
E.  Imports from the U.S.      3,500       3,500      3,550 
 
The above statistics are unofficial estimates. 
 
 
PART 1. TITLE  
 
8 - Paper and Paperboard (PAP) 
 
PART 2. NARRATIVE 
 
Due to recent and anticipated currency swings, as well as rapidly 
fluctuating (dollar denominated) raw material costs, U.S. dollar-based 
figures for the Japanese paper market may be misleading.  Therefore, 
volume figures are given in the table below to clarify trends in the 
actual flow of goods.  Economic recovery in Japan over the next few 
years is expected to be slow.  This will have major consequences for the 
paper/paperboard market, which is critically tied to the health of other 
sectors through the demand for packaging, literature, etc.  Thus, only 
small increase in total (volume) market size is expected over the next 
few years, although due to the dramatic appreciation of the yen, the 
dollar value of the market is expected to increase quite noticeably.  In 
that sense, the profit opportunities for efficient, high-quality U.S. 
producers remain bright.  One other factor critically affecting the 
picture is the place of Japan's market in the context of world supply 
and demand.  For the past few years Japan's slack economic performance 
has led to considerable idle capacity in the Japanese paper industry.  
While many economies in the region (particularly Southeast Asia) are 
expected to grow briskly, the high yen makes it extremely difficult for 
Japanese manufactures to increase plant usage by exporting.  Thus, the 
industry's domestic production seems largely tied to the domestic 
market.  In such a scenario, competition for business just to keep paper 
plant operating is putting severe pressure on margins. But conversely, 
the strength of the yen and gradual recovery of Japanese market prices 
will certainly help to increase Japanese imports, especially as an 
anticipated cooling off of the U.S. economy frees up more U.S. capacity 
for export production. 
 
PART 3. DATA TABLE 
 
                   Millions of US Dollars 
                   (1,000 metric tons) 
             1994   1995   1996  
 
A.   Total market size    39,005   50,250    51,350 
                         (29,040)  (30,150)  (30,810) 
B.   Total local production   38,316   49,167   50,000 
                              (28,527)   (29,500)   (30,000) 
C.   Total exports        1,167   1,333   1,200 
                          (869)   (800)   (720) 
D.	Total imports       1,856   2,417   2,550 
                         (1,382)   (1,450)   (1,530) 
E.	Imports from the U.S.     939   933   1,283 
                                (699)   (560)   (770) 
 
The above statistics are unofficial estimates. 
 
 
PART 1. TITLE 
 
9 - Telecommunications Equipment (TEL) 
 
PART 2. NARRATIVE 
 
Japan's proposed National Information Infrastructure (NII) is expected 
to develop into a $1.4 trillion market by the year 2010 when the 
nationwide fiber-to-the-home (FTTH) network is completed.  The major 
player in the NII is Nippon Telegraph and Telephone Corporation (NTT), 
which is responsible for approximately half of all the 
telecommunications equipment procurements in the Japanese market and, 
has an over 80 percent share of the overall telecom market in Japan.  
NTT has committed to increasing its procurement from foreign companies 
over the medium term under the bilateral NTT procurement agreements 
signed in November 1994, and over the last fiscal year NTT's foreign 
procurements are estimated to have exceeded $1 billion.  U.S. companies 
can also take advantage of the Framework Agreement on Government 
Procurement of telecom equipment, which commits Japanese government 
entities to procure increasing amounts of foreign telecom equipment.  
Besides NTT, new common carriers (NCC's) and public utility sector's 
electric power companies are good potential customers.  The BEST 
PROSPECTS for U.S. suppliers include: (1) inter-networking equipment 
e.g. routers, frame relay switches, and ATM switches; (2) multi-media 
software and hardware, including CATV; and (3) communications satellites 
and related equipment.  (Note: Satellites are not included in Japan's 
import statistics because they are delivered in orbit and do not clear 
customs.)  The major local and third-country competitors are NEC, 
Hitachi, Fujitsu, Ericsson (Sweden), British Aerospace (U.K.), NOKIA 
(Finland), Newbridge (Canada), Aerospatiale (France), Alcatel (France), 
and Siemens (Germany).  
 
PART 3. DATA TABLE 
                       Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size        17,698   22,118   25,936 
 
B.  Total local production   24,816   28,744   33,343 
 
C.  Total exports             8,033    8,812    9,693 
 
D.  Total imports             1,848    2,178    2,286 
 
E.  Imports from the U.S.       915    1,089    1,143 
 
The above statistics are unofficial estimates. 
 
 
PART 1. TITLE 
 
10 - Pet Foods and Supplies (PET) 
 
PART 2. NARRATIVE  
 
According to Japanese Ministry of Agriculture, Forestry, and Fisheries 
(MAFF) statistics, domestic production of pet food in Japan totalled 
203,161 tons in 1988; by 1993 this figure had grown to 315,318 tons:  an 
annual growth rate of over 9%.  In comparison, imports of pet food grew 
nearly 45% annually over the same period (35,870 tons to 229,082 tons).  
The penetration of pet food imports in the Japanese market is very high:  
45% of total consumption by sales and 42% by volume, and these figures 
are expected to continue to increase.  According to the Japanese 
Ministry of Finance (MOF), the U.S. currently has a commanding 40% of 
import market share (followed by Thailand with 26% and Australia with 
24%).  The pet supplies (accessories) market is estimated at 55 billion 
yen or $611 million (shipment basis), and twice that amount on a retail 
price basis. 
 
PART 3. DATA TABLE                                              
                      Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size           1,950   2,497   2,822 
 
B.  Total local production      1,054   1,349   1,524 
 
C.  Total exports                   2       2       2 
 
D.  Total imports                 898   1,150   1,300 
 
E.  Imports from the U.S.         359     460     520 
 
The above statistics are unofficial estimates 
 
 
PART 1. TITLE 
 
11 - Automotive Parts and Accessories (APS) 
 
PART 2. NARRATIVE 
 
Reflecting the decrease of domestic auto production and exports in 1993 
and 1994, auto parts production figures in JFY 1993 released by Japan 
Auto Parts Industries Association (JAPIA), were 13,252 billion Yen down 
6.9 percent from JFY 1992.  JFY 1993 auto parts production are expected 
to decrease at the same pace as the previous year.  The Japan auto parts 
industry is now a major industry with a market of approximately $140 
billion.  Currently the U.S. has the largest share of the Japanese 
imported auto parts market (about 41 percent in 1993), but total imports 
represented only 1.6 percent of the value of locally produced auto 
parts.  New opportunities for auto parts exports to Japan, generated in 
the wake of former President Bush's 1992 visit and the U.S. & Japan 
automotive framework negotiations present U.S. suppliers with a 
substantial opportunity to penetrate this difficult market sector.  
 
PART 3. DATA TABLE 
                          Millions of U.S. Dollars 
 
              1994   1995   1996 
 
A.  Total market size        141,436   142,949   145,294 
 
B.  Total local production   173,227   182,581   188,889 
 
C.  Total exports             33,979    42,360    46,596 
 
D.  Total imports              2,188     2,728     3,001 
 
E.  Imports from the U.S.        900     1,174     1,350 
 
The above statistics are unofficial estimates.    
 
 
PART 1. TITLE 
 
12 - Laboratory and Scientific Instruments (LAB) 
 
PART 2. NARRATIVE 
 
To maintain its position as a leader of high quality control 
manufacturing, a high level of research and development (R&D) 
expenditures and capital investments by private firms will continue in 
Japan.  Additionally, the Japanese Government is exerting increasing 
efforts with new programs and subsidies to promote Japan's basic 
research which is lagging behind the United States in many fields.  
Thus, the Japanese market for laboratory and scientific instruments is 
expected to resume a 17% growth rate when the domestic economy rebounds. 
 
The overall technology level of Japanese manufacturers of related 
instruments is now world class.  Nevertheless, U.S. suppliers are still 
regarded as the leader of innovative technology in the Japanese market.  
State of-the-art U.S. instruments for specialized applications continue 
to enjoy strong sales prospects in this $3.7 billion market.  The U.S. 
maintains a particularly strong competitive position in the subsectors 
of analytical instruments and electric test and measuring instruments.  
 
PART 3. DATA TABLE   
                       Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size         3,750     4,000   4,400 
 
B.  Total local production    4,600     4,800   5,000 
 
C.  Total exports             1,800     1,800   1,700 
 
D.  Total imports               950     1,000   1,100 
 
E.  Imports from the U.S.       690       760     820 
 
The above statistics are unofficial estimates 
 
 
PART 1. TITLE 
 
13 - Pumps, Valves and Compressors (PVC) 
 
PART 2. NARRATIVE 
 
Demand for pumps, valves and compressors (PVC) is reflected by the 
business trends of user industries and public investment.  As basic 
equipment for machinery and industrial facilities from households to 
nuclear power plants, the future PVC market is bright as the Japanese 
economy gradually improves.  In October 1994, the Japanese government 
decided on a basic plan for public investment which amounted to $6.2 
trillion from JFY 1995 (4/95 - 3/96) to JFY 2004.  Demand for PVC's, 
particularly from public sectors, e.g., levee works, is expected to 
increase.  Demand for high-quality and high-performance PVC's is strong.  
The high yen and the removal of custom tariffs on PVC's in 1990 have 
improved the opportunities for imports.  No import barriers exist in 
this product category.  Demand for foreign made PVC's is expected to 
increase with the recovery of the economy.  The import climate is 
favorable for American made PVCs as U.S. suppliers held 45% share of 
imports in this category in 1994.  Pumps accounted for 46% of the total 
import of PVC's, valves 45%, and compressors 47%.  The major competitive 
factor is the aggressive competition by domestic manufacturers who offer 
attentive services to users, including modification of products to suit 
the customer's needs, attractive payment terms, and prompt post-sales 
service including all-hour emergency maintenance service.  Asian 
manufacturers are aggressively entering the Japanese market for low 
grade level products, but their current share is negligible. 
 
PART 3. DATA TABLE 
                         Millions of U.S. Dollars 
 
            1994   1995   1996 
 
A.  Total market size         4,524   5,341   5,771 
 
B.  Total local production    8,105   9,462   9,935 
 
C.  Total exports             4,425   5,115   5,217 
 
D.  Total imports               844     994   1,054 
 
E.  Imports from the U.S.       384     453     489 
 
The above statistics are unofficial estimates 
 
 
PART 1. TITLE 
 
14 - Household Consumer Goods (HCG) 
 
PART 2. NARRATIVE 
 
Western influences are increasingly apparent in Japanese lifestyles.  
Over 10 million Japanese go abroad each year and are directly exposed to 
products used in other countries.  Imported household consumer goods, 
particularly housewares such as tableware and kitchenware, have bright 
prospects in Japan not only due to the strong yen but also the 
consumers' growing desire for higher standards of living.  In general, 
Japanese consumers look for high-grade products and consider good 
design, colors, and quality materials, as well as function.  While 
famous European chinaware brands are popular, the current recession-
related slump in consumption has led many prestigious European 
manufacturers to introduce more mid-range products.  The Japanese market 
of tableware and kitchenware alone, estimated at $2,300 million in 1994, 
also has excellent gift prospects.  Gift-giving is an important part of 
private and public life in Japan:  the Japanese gift market is estimated 
at approximately $108 billion. 
 
PART 3. DATA TABLE 
                         Millions of U.S. Dollars 
 
              1994   1995   1996 
 
A.  Total market size        15,655   18,316   18,793 
  
B.  Total local production   14,706   16,833   17,000 
 
C.  Total exports             1,210    1,330    1,303 
 
D.  Total imports             2,159    2,813    3,096 
 
E.  Imports from the U.S.       177      216      237 
 
The above statistics are unofficial estimates 
 
 
PART 1. TITLE 
 
15 - Apparel (APP) 
 
PART 2. NARRATIVE 
 
Although the apparel market in Japan is currently very slow, imports 
from the United States have been increasing steadily over the past 
several years.  However, after 1995 the import growth rate from the 
United States is expected to decline due to the lingering recession and 
an expected inventory overstock.  The United States, with a 6.0% import 
market share, is the fourth leading exporting country following China 
(58.5%), Korea (11.2%), and Italy (7.3%).  Thailand (2.5%) and Indonesia 
(2.4%) follow the United States.  The breakdown of the total apparel 
market in Japan is men's- 24%, women's- 45%, children's- 10%, other 
kinds of apparel- 14%, and fashion-related items- 7%.  Major local and 
third country competitors include Renown Co., Ltd.  and Kashiyama Co., 
Ltd. (Japan) and Celine S.A, Christian Dior and Givenchy (France).  
Japanese regulations for baby clothing have a formaldehyde tolerance 
level of "undetectable." 
 
PART 3. DATA TABLE 
                        Millions of U.S. Dollars 
 
           1994   1995   1996 
 
A.  Total market size        43,878   49,578   48,514 
 
B.  Total local production   32,900   35,423   33,652 
 
C.  Total exports               483      532      559 
 
D.  Total imports            11,461   14,687   15,421 
 
E.  Imports from the U.S.       791      877      920 
 
The above statistics are unofficial estimates. 
 
 
PART 1. TITLE 
 
16 - Air Conditioning and Refrigeration Equipment (ACR) 
 
PART 2. NARRATIVE 
 
Demand for air conditioning and refrigeration (ACR) equipment is 
improving.  Sales of major ACR equipment on a unit basis between 10/94 - 
3/95 increased significantly.  Car air conditioners increased 10.4% over 
the same period last year, room air conditioners were up 26.9%, package 
type air conditioners were up 9.2%, and commercial refrigerated cabinets 
were up 8.8%.  Demand for consumer air conditioners is steadily growing 
due to the construction of 1,570,252 homes, an increase of 5.7%, in 1994 
from the previous year.  Commercial demand for ACR equipment is 
influenced by the equipment funds of user industries.  MITI's Industrial 
Structure Council reported that the equipment investment by all Japanese 
industries in fiscal 1995 (4/95 - 3/96) is anticipated at $182,787 
million, up 6.6% over last fiscal year. 
 
The high yen and the removal of custom tariffs on ACR products in 1990 
have improved the opportunities for imports.  American made ACR's are 
favorably accepted in the Japanese market.  U.S. suppliers held a 35% 
share in the total imports of this category in 1994.  Refrigeration 
equipment accounted for 65% of the total import of ACR's, compressors 
23%, and air conditioning equipment 22%.  Imports from Asian countries, 
Thailand and Malaysia, are increasing, but most imports originated from 
Japanese transplants in those countries.  The High Pressure Gas Control 
Law applies to these products.  Machinery testing problems are being 
addressed.  A contract has been concluded between a U.S. company as an 
entrusted testing organization and the High Pressure Gas Safety 
Institute of Japan. 
 
PART 3. DATA TABLE 
                        Millions of U.S. Dollars 
 
            1994   1995   1996 
 
A.  Total market size        20,436   23,585   24,206 
 
B.  Total local production   24,367   28,168   29,013 
 
C.  Total exports             4,361    5,090    5,345 
 
D.  Total imports               430      507      538 
 
E.  Imports from the U.S.       151      182      197 
 
The above statistics are unofficial estimates  
 
 
PART 1. TITLE 
 
17 - Furniture (FUR) 
 
PART 2. NARRATIVE 
 
The appreciation of the yen and the growing reputation of U.S. furniture 
for value and quality has resulted in Japanese buyers looking more 
closely at U.S. furniture.   Over 10 million Japanese go abroad each 
year and are becoming increasingly knowledgeable about western-style 
furnishings.  The promising household furniture market reportedly 
accounts for over $19 billion or 60% to 70% of the entire Japanese 
furniture market at retail.  The contract furniture market is growing 
faster, however, and the market shares of the household and the contract 
furniture markets are expected to reverse in the near future.  Domestic 
and European, particularly Italian, furniture manufacturers are 
currently the major players in this industry, but prospects for 
continued U.S. penetration appear excellent.   
 
PART 3. DATA TABLE 
                         Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size        27,202   30,779   31,324 
 
B.  Total local production   25,560   28,678   28,964 
 
C.  Total exports               395      439      434 
 
D.  Total imports             2,037    2,540    2,794 
 
E.  Imports from the U.S.       272      323      339 
 
The above statistics are unofficial estimates 
 
 
PART 1. TITLE 
 
18 - Pollution Control Equipment and Service (POL) 
 
PART 2. NARRATIVE 
 
The Japanese government and municipalities continue to strengthen for 
environmental protection and pollution control.  This trend has become 
more conspicuous following the Rio Summit in 1992, under which Japan 
committed to suppress CO2 emissions to their 1990 level by the year 
2000.  Under the tighter regulatory framework, Japanese firms must 
incorporate environmental considerations in all decisions regarding 
product development and manufacturing.   
 
Accordingly, the Japanese market for environmental protection and 
pollution control is among the sectors least affected by Japan's 
prolonged recession.  The market is expected to expand nearly 18% to 
over $17.6 billion in 1996 when investment levels increase with a 
recovery of the domestic economy.  In particular, Japan's imminent 
adoption of the ISO 14000 on environmental management and auditing may 
act as a major driving force, expanding further market opportunities.  
Japan, the third largest exporter of pollution control equipment and 
licensed technology, (behind Germany and the United States) has a 
competitive domestic market.  However, there is a substantial U.S. 
export potential for state-of-art U.S. equipment and services such as 
those utilizing biotechnology applications for  waste treatment and 
contamination remediation.  Cost effective U.S. technology dealing with 
soil and groundwater contamination are high sales potential areas in the 
Japanese market.            
PART 3. DATA TABLE   
                       Millions of U.S. Dollars 
 
              1994   1995   1996 
 
A.  Total market size        15,000   16,670   17,690 
 
B.  Total local production   15,200   16,900   17,950 
 
C.  Total exports               300      350      400 
 
D.  Total imports               100      120      140 
 
E.  Imports from the U.S.        60       70       85 
 
The above statistics are unofficial estimates      
 
 
PART 1. TITLE  
 
19 - Electrical Generation/Distribution Equipment (ELP) 
 
PART 2. NARRATIVE  
 
Japan's ten electric power companies are expected to continue to make 
significant investments in power generating capacity through the 
remainder of the decade, to meet increasing Japanese power demand.  
Revision of the Electric Utilities Industry Law approved by the Diet in 
April 1995, will introduce competition in the Japanese electric industry 
by eliminating the system of regional monopolies, and should stimulate 
procurement of competitive foreign materials and equipment by both the 
existing electric power companies and new entrants into the power 
generation industry.  All ten existing electric power companies 
participated in the Government of Japan's "Business Global Partnership 
Initiative" and have established systems to promote international 
procurement, including establishment of international procurement 
department and issuance of procurement guides in English.  They also 
have sent buying missions to foreign countries, including the U.S.  The 
fact that most materials and equipment for power generation and 
distribution in Japan were originally introduced from the U.S. is an 
additional factor supporting expectations of increased imports from 
America.             
 
The most promising subsectors and current market size are as follows 
($millions):  
-  Power Generation Equipment:      $7,300 
-  Power Transmission Equipment:    $4,300 
-  Substation:                      $2,100 
-  Power Distribution:              $2,400 
 
PART 3. DATA TABLE 
                        Millions of U.S. Dollars 
 
             1994   1995   1996 
 
A.  Total market size         25,900   29,900   30,501 
 
B.  Total local production    27,743   36,176   34,242 
 
C.  Total exports              3,300    7,490    5,000 
 
D.  Total imports              1,457    1,214    1,259 
 
E.  Imports from the U.S.      1,311    1,093    1,133 
 
The above statistics are unofficial estimates 
 
 
B.  Agricultural Sectors 
 
PART 1. TITLE 
 
Unranked - Fresh Vegetables (FOD) 
 
PART 2. NARRATIVE 
 
Japanese imports of fresh vegetables, especially green and leafy 
vegetables, is growing meteorically.  Imports from all countries jumped 
from $468 million in 1992 to $604 million in 1993 and $877 million in 
1994, with product from the U.S. claiming ever larger import market 
share.  U.S. exports are lead by broccoli and asparagus, but there is 
strong potential for similar growth for lettuce, carrots, celery, and, 
pending elimination of import restrictions, tomatoes.  The strong 
yen/dollar exchange rate, decrepit local agriculture, and unstable 
weather make U.S. vegetables highly attractive to Japanese importers and 
their customers. 
 
List of most promising subsectors within the sector, along with 
estimated 1995 total market size of each subsector (US $ millions): 
  Lettuce (all kinds)  $1,000 
  Broccoli  $350 
  Asparagus  $290 
 
Major local and third-country competitors: 
  Japan 
  China 
 
PART 3. DATA TABLE 
                     Millions of U.S. Dollars 
 
            1994   1995   1996 
 
A.  Total market size         17,413   17,819   *** 
 
B.  Total local production    17,066   17,237   *** 
 
C.  Total exports                  0        0   *** 
 
D.  Total imports                582      800   *** 
 
E.  Imports from the U.S.        254      500   *** 
 
*** The U.S. Department of Agriculture does not make forecasts this far 
in advance. 
 
The above statistics are unofficial estimates. 
 
 
PART 1. TITLE 
 
Unranked - Beef (FOD) 
 
PART 2. NARRATIVE 
 
Japanese imports of U.S. beef continued to boom in 1994, rising 12 
percent by value and 16 percent by volume over the previous year.  The 
trade was valued at an incredible $1.51 billion.  Key factors 
encouraging increased sales included continued appreciation of the yen 
(by more than 8 percent) and strong retail and food service promotion 
efforts to move increasingly affordable cuts through "high yen" sales 
and "price-cut" menus. 
 
Major local and third-country competitors: 
  Japan 
  Australia 
 
PART 3. DATA TABLE 
                      Millions of U.S. Dollars 
 
            1994   1995   1996 
 
A.  Total market size          1,561   1,600   *** 
 
B.  Total local production       599     600   *** 
 
C.  Total exports                  0       0   *** 
 
D.  Total imports                842     885   *** 
 
E.  Imports from the U.S.        447     464   *** 
 
*** The U.S. Department of Agriculture does not make forecasts this far 
in advance. 
 
The above statistics are unofficial estimate. 
 
 
PART 1. TITLE 
 
Unranked - Frozen Vegetables (FOD) 
 
PART 2. NARRATIVE 
 
Japan's frozen vegetable imports are growing at a steady rate, as 
improved technology continues to provide higher quality products, 
domestic production of fresh inputs declines, and the strong yen makes 
imports more affordable.  In 1994, total imports were valued at $561 
million, up 18 percent over the previous year.  Imports from the U.S. 
are dominated by frozen potatoes and frozen sweet corn, but other frozen 
vegetables, such as frozen mixed vegetables should also do well.  China 
is a strong price competitor, but frequent quality problems there 
provide an opportunity for the U.S.  
 
List of most promising subsectors within the sector, along with 
estimated 1995 total market size of each subsector (US $ millions): 
 Frozen Potatoes         $270 
 Frozen Sweet Corn       $120 
 Frozen Mixed Vegetable  $290 
 
Major local and third-country competitors: 
  Japan 
  China 
  Taiwan 
 
PART 3. DATA TABLE 
                      Millions of U.S. Dollars 
 
              1994   1995   1996 
 
A.  Total market size         550   595   *** 
 
B.  Total local production    110   105   *** 
 
C.  Total exports               0     0   *** 
 
D.  Total imports             440   490   *** 
 
E.  Imports from the U.S.     215   232   *** 
 
*** The U.S. Department of Agriculture does not make forecasts this far 
in advance. 
 
The above statistics are unofficial estimate. 
 
 
PART 1. TITLE 
 
Unranked - Pork (FOD) 
 
PART 2. NARRATIVE 
 
Overall Japanese pork consumption is declining, due to competition from 
increasingly affordable imported beef.  Domestic Japanese production, 
however, is declining faster than consumption, making room for increased 
imports.  Imports from the U.S. are growing particularly quickly, as 
Japanese importers and consumers become more familiar with the quality 
and safety advantages of U.S. pork, relative to some third-country 
competitors.  This is augmented by increasingly rapid transportation 
links from pork producing areas in the U.S to Japan.  U.S. market share 
is growing at a rapid rate, and is expected to reach 20 percent in the 
near future. 
 
Major local and third-country competitors: 
  Japan 
  Taiwan 
  Denmark 
 
PART 3. DATA TABLE 
                       Millions of U.S. Dollars 
 
              1994   1995   1996 
 
A.  Total market size         1,884   1,855   *** 
 
B.  Total local production    1,390   1,340   *** 
 
C.  Total exports                 0       0   *** 
 
D.  Total imports               494     515   *** 
 
E.  Imports from the U.S.        72      90   *** 
 
*** The U.S. Department of Agriculture does not make forecasts this far 
in advance. 
 
The above statistics are unofficial estimate. 
 
C.  Significant Investment Opportunities 
 
      Given the size and sophistication of the Japanese market, there 
are significant investment opportunities in every major sector of the 
economy, as described in detail in various sections of this document.  
These opportunities are similar to those that exist in other developed 
economies such as Canada or in Western Europe.  Large development 
projects such as the Kansai International and Chubu International 
Airports or the government's Major Projects Action Plan may offer 
significant peripheral investment opportunities for U.S. companies.  As 
Japan is a fully developed country and G7 member, no World Bank or other 
multi-lateral development bank lending is available for in-country 
developmental investment opportunities.  As the World's leading lender 
of Official Development Assistance, Japan does offer investment 
opportunities in third-country markets for U.S. and other foreign firms 
through its untied-lending programs. 
      Foreign investment in Japan is far lower than other developed 
countries for a variety of reasons.  Partly, it is a legacy of severely 
restrictive government policies which were eased beginning in 1967, but 
as late as 1991 were still discouraging access.  Further layers of 
administrative and  regulatory obstacles and restrictive business 
practices push up prices and hamper new business development.  
Additionally, the high cost of land during and often the late 1980's 
'bubble economy' has made Japan almost prohibitively expensive. 
      In response to international criticism, the Government of Japan 
has increased tax incentives for foreign investment, as well as debt 
guarantee, accelerated depreciation, and extended carry forward for 
losses.  They have also launched a quasi-governmental corporation known 
as the Foreign Investment in Japan Development Corporation or FIND to 
assist with the investment activities of foreign companies, including: 
advising, consultation, employee search, training, seminars, and 
administrative support (reach FIND directly at Tel: 81-3-3224-1203).  In 
addition U.S. firms should investigate incentives offered by local 
governments to attract foreign investment. 
 
      The Government of the United States acknowledges the contribution 
that outward foreign direct investment makes to the U.S. economy.  U.S. 
foreign direct investment is increasingly viewed as a complement or even 
a necessary component of trade.  For example, roughly 60 percent of U.S. 
exports are sold by American firms that have operations abroad.  
Recognizing the benefits that U.S. outward investment brings to the U.S. 
economy, the Government of the United States undertakes initiatives, 
such as Overseas Private Investment Corporation (OPIC) programs, 
investment treaty negotiations and business facilitation programs, that 
support U.S. investors 
 
 
VI.  TRADE REGULATIONS AND STANDARDS 
 
      This section (A-L) is also an abridgement from "Destination 
Japan." 
 
A.  Trade Barriers, Including Tariff, Non-Tariff Barriers and  
      Import Taxes 
 
      1.  Tariffs 
 
      According to the Japan Tariff Association, the average applied 
tariff in Japan is now one of the world's lowest.  However, import 
duties on some agricultural items and certain manufactured goods remain 
relatively high.  As part of their import incentive program, the 
Japanese expanded the list of duty-free manufactured products by 2400 
items out of 7000 items listed on the tariff schedule.  The total amount 
of custom duties imposed during 1993 is 3.6% of the value of total 
imports to Japan.  Consequently, almost all machinery imports are now 
tariff free.  Tariffs are administered by the Customs Bureau of the 
Ministry of Finance.  As a member of the Harmonized System Convention, 
Japan shares the same trade classification system as the United States 
up to six digits.  Japan's tariff schedule has four columns of 
applicable rates:  general, GATT, preferential, and temporary.  Goods 
from the United States are charged GATT rates unless a lesser 
"temporary" rate exists.  Japan's preferential system of tariffs grants 
lower or duty-free rates to products imported from developing countries. 
      A simplified tariff system for low-value imported freight worth 
less than 100,000 yen, such as small packages, simplifies determination 
of tariff rates, eliminating the extra time necessary to determine the 
type of product and precise value, and minimizing customs brokers' 
handling charges.  Importers can choose either the normal rate or the 
simple tariff, which could be higher or lower.  It is possible to obtain 
an advance ruling on tariff classification and duty rates from Japanese 
Customs. 
 
      2.  Import Taxes 
 
      In addition to the customs duty, a 3 percent consumption tax 
(general excise tax) is levied on all goods sold in Japan and payment is 
required at the time of import declaration.  The consumption tax is 
assessed on the CIF value of the product plus the import duty. 
      Duties and consumption tax are payable when making an import 
declaration at the time of customs clearance by the importer.  The 
Import Declaration Form (Customs Form C 5030) is filled out by the 
importing company and is used as an import declaration as well as a tax 
payment declaration form.   
      Packages containing items with a value of 10,000 yen or less are 
exempt from duty and the consumption tax.   
 
      3.  Government of Japan Tax Incentives for Imports 
 
      The Japanese Government grants to manufacturers in Japan tax 
credits of 5 percent of the amount they increase imports of eligible 
manufactured products in a given year (products that are duty free), and 
offers importers tax deferral of certain profits. 
 
B.  Customs Valuation 
 
      Tariff duties are assessed on the CIF value at ad valorem or 
specific rates, and, in a few instances, are charged a combination of 
both.  
 
C.  Import Licenses 
 
      Most goods now qualify as "freely importable" and do not require 
an import license.  The only exception is for those commodities falling 
under import quotas in which case the Japanese importer must apply for 
license approval.  Rice, wheat, beef, and leather products are among the 
few remaining products subject to import quotas. 
 
D.  Export Controls 
 
      Since Japan was a member of the former COCOM export-control 
organization and is also a member of other multilateral export control 
regimes, U.S. export controls to Japan are among the least restrictive 
of any destination in the world.  However, Japan may conduct trade with 
countries that the U.S. has embargoes against requiring vigilance by 
U.S. exporters against transhipments through Japan contrary to U.S. 
export control law.  Consult the U.S. Export Administration Regulations 
(15 CFR 730-799) for export licensing guidance for specific transactions 
or call the Bureau of Export Administration at 202-482-2547. 
 
E.  Import/Export Documentation 
 
      While customs procedures have been simplified in recent years, a 
number of documents are still required for clearance.  These include:  
(1) for import quota items, an import license, usually valid for four 
months from date of issuance; (2) an Import Declaration Form (Customs 
Form C 5030); (3) shipping documents such as a commercial invoice, 
packing list, and an original and signed bill of lading, or, if shipped 
by air, an air waybill; (4) a certificate of origin if the goods are 
entitled to favorable duty treatment  (preferential or GATT rates; in 
practice, shipments from the United States are routinely assessed using 
the GATT or "temporary" rates without a certificate or origin); and (5) 
any additional documents necessary as proof of compliance with relevant 
Japanese laws and standards regulations, if applicable.   
 
F.  Temporary Entry 
 
      Japan is a member of the International Convention to Facilitate 
the Importation of Commercial Samples and Advertising Materials under 
the ATA Carnet System.  Use of a carnet allows goods such as commercial 
and exhibition samples, professional equipment, musical instruments, and 
television cameras to be carried or sent temporarily into a foreign 
country without paying duties or posting bonds.  A carnet should be 
arranged for in advance by contacting a local office of the United 
States Council for International Business or its New York office at 
(212) 354-4480.   
      Advertising materials, including brochures, films, and 
photographs, may enter Japan duty free.  Articles intended for display 
but not for sale at trade fairs and similar events are also permitted to 
enter duty free in Japan only when the fair/event is held at a bonded 
exhibition site.  These bonded articles are required to be re-exported 
after the event, or stored at a bonded facility.  A commercial invoice 
for these goods should be marked "no commercial value, customs purposes 
only" and "these goods are for exhibition and are to be returned after 
conclusion of the exhibition."  It is also important to identify the 
name of the trade show or exhibition site, including exhibition booth 
number (if known), on shipping documents. 
 
G.  Labeling, Marking Requirements 
 
      Straw packing materials are prohibited.  The Japanese Measurement 
Law requires that all imported products and shipping documents show 
metric weights and measures.  For most products there is no requirement 
for country of origin labeling, however, some categories such as 
beverages and foods do.  However, if labels indicating origin are 
determined to be false or misleading, the labels must be removed or 
corrected.  False or misleading labels which display the names of 
countries, regions, or flags other than the country of origin, and/or 
names of manufacturers or designers outside the country of origin are 
not permissible. 
      Items which are required by Japanese law to bear labels cover four 
product categories:  textiles, electrical appliances and apparatuses, 
plastic products, and miscellaneous household/consumer goods.  Because 
all these regulations apply specifically to individual products, it is 
important to work with a prospective agent/importer to ensure your 
product meets requirements, if applicable.  For more information, see 
the section titled "Japanese Regulations, Standards, Quality Marks, and 
Certification Systems." 
      In general, most labeling laws are not required at the customs 
clearance stage, but at the point of sale.  Consequently, it is most 
common for Japanese importers to affix a label before or after clearing 
customs. 
 
H.  Prohibited Imports 
 
      Japan strictly prohibits entry of narcotics, obscene materials, 
counterfeit goods or goods that violate intellectual property rights.  
The use of chemicals and other additives in foods and cosmetics is 
severely restricted by regulations that follow a "positive list" 
approach.  Restricted items include certain agricultural and meat 
products, endangered species and products such as ivory, animal parts 
and fur whose international trade is banned by international treaty, 
swords and firearms, and more than 2 months supply of medicines and 
cosmetics for personal use. 
 
I.  Standards 
 
      Product requirements in Japan fall into two categories:  
regulations (or mandatory standards) and non-mandatory voluntary 
standards.  Compliance with regulations and standards is also governed 
by a certification system, in which inspection results determine whether 
approval (certification/quality mark) is to be granted.  Generally 
approval is a requirement to sell or display in a trade show; unapproved 
medical equipment may be displayed if accompanied by a sign indicating 
that the product is not yet approved for sale.  To affix a mandatory 
quality mark or a voluntary quality marks requires prior product type 
approval and possibly factory inspections for quality control 
assessment.  Regulated products must bear the appropriate mandatory mark 
when shipped to Japan in order to clear Japanese Customs.  Regulations 
may apply not only to the product, but also to packaging, marking or 
labeling requirements, testing, transportation and storage, and 
installation.  Compliance with "voluntary" standards and obtaining of 
"voluntary" marks of approval may greatly enhance sales potential and 
winning Japanese consumer acceptance.   
      Japanese regulations include:  the Consumer Product Safety Law, 
Electrical Appliance and Material Control Law and many others.  
"Voluntary" standards include:  Japanese Industrial Standards (JIS), 
Japanese Agricultural Standards (JAS) and many others. 
      The "voluntary" JIS mark, administered by MITI, applies to over 
1,000 different industrial products and consists of over 8,600 
standards, 90 percent of which are available in English.  Adherence to 
JIS is also an important determinant for companies competing on bids in 
the Japanese government procurement process.  Products that comply with 
these standards will be given preferential treatment in procurement 
decisions under Article 26 of the Industrial Standardization Law.  JIS 
covers all industrial products except for those products regulated by 
specific national laws or for which other standard systems apply (i.e. 
Pharmaceutical Affairs Law, Japan Agricultural Standards).   
      The JAS mark is another "voluntary" but widely used product 
quality and labeling mark.  JAS applies to beverages, processed foods, 
forest products, agricultural commodities, livestock products, oils and 
fats, products of the fishing industry, and processed goods made from 
agricultural, forestry, and fishing industry raw materials.  Specific 
JAS marks exist for various types of plywood, paneling, flooring boards, 
lumber, and timber.  The JAS marking system is administered by Japan's 
Ministry of Agriculture, Forestry and Fisheries (MAFF).  Separate 
mandatory standards for quality labeling of processed foods and 
beverages are administered by Japan's Ministry of Health and Welfare 
(MHW).   
 
      A limited number of testing laboratories in the United States have 
been designated by Japanese government agencies to test and approve U.S. 
products for compliance with Japanese mandatory certification systems 
and laws.  Products not covered by these arrangements must be tested and 
approved by Japanese testing labs before these products can be sold in 
Japan.   
 
J.  Free Trade Zones/Warehouses 
 
     Japan has no free trade zones.  There are five kinds of bonded 
areas:  (A) designated bonded areas, (B) bonded sheds, (C) bonded 
warehouses, (D) bonded factories, and (E) bonded exhibition sites: 
 
(A)   Designated Bonded Areas:  This is public space authorized by 
Ministry of Finance.  In these areas, located near ports of entry, 
foreign cargo (shipments to be exported, to be imported and in transit) 
can be unloaded, transported, and stored up to one month.  This 
temporary space is used for customs declaration and handling, and can be 
used by anybody for a fee. 
 
(B)   Bonded Shed:  This is space authorized by the Director General of 
Customs Houses and it performs the same function as a designated bonded 
area. 
 
(C)   Bonded Warehouses:  Foreign cargo can be stored at bonded 
warehouses for up to 2 years (and longer with special permission).  As 
long as cargo is stored in a bonded warehouse, custom duty is not 
applied.   
 
(D)   Bonded Factories:  Bonded factories allow manufacturers to produce 
goods with foreign materials without paying customs duties for those 
foreign materials.   
 
(E)   Bonded Exhibition Sites:  This is exhibition space authorized by 
the Director General of Customs House for an international event.  This 
system is designed to make administration of world-wide expositions and 
exhibitions by foreign governments easier.  Foreign cargo can be 
exhibited or used with simple declaration.  Equipment and materials to 
be displayed at a bonded exhibition site should be identified as such 
and arrangements must be made with the freight forwarder prior to 
shipment.   
 
K.  Special Import Provisions 
 
      1.  Import Promotion Measures  
 
      While Japan's average tariff rates on industrial products are 
among the world's lowest at 2 percent, high tariffs and import quotas 
still remain on a number of manufactured and agricultural products of 
interest to U.S. companies.   
      The Government of Japan has, however, put into place a substantial 
program to promote imports of manufactured goods into Japan by providing 
many types of assistance to potential U.S. and other foreign exporters 
seeking to do business with Japan.  The scope of these programs covers 
tax incentives for import into Japan, financing for exports to Japan, 
assistance in finding Japanese business partners, market research, 
export study programs, and the provision of free temporary office space 
in five Japanese cities.   
      JETRO's import promotion program includes dispatch of long-term 
senior trade advisers to 18 U.S. states to advise on exporting to Japan; 
dispatch of short-term experts to identify products with export 
potential to Japan; seminar tours to Japan for U.S. business people to 
better understand the Japanese market; establishment of Business Support 
Centers in Tokyo, Yokohama, Nagoya, Osaka and Kobe, and the 
establishment of local import information centers in all 47 prefectures.  
This budget has also enabled the Government of Japan to offer 
enhancements for trade events organized with the U.S. Department of 
Commerce, to publish market research in English, and to support other 
activities of the Trade Expansion Cooperation Program of the U.S. 
Department of Commerce and MITI. 
      Since 1993 JETRO has opened five Business Support Centers in major 
cities (Tokyo, Yokohama, Nagoya, Osaka, Kobe) to give foreign companies 
a temporary office for 2 weeks to 2 months while they are looking for 
permanent office space in Japan.  The BSC's offer rent-free furnished 
office partitions, consultants, a library, phone message and answering 
services, meeting, seminar and exhibition rooms, and a room for 
receptions. 
     
      2.  MITI's Business Initiative for Global Partnership 
 
      In November 1991, MITI established the Business Global Partnership 
with 40 of Japan's automobile, electronics, machinery, steel, non-
ferrous metal, chemical and trading companies.  Another 160 companies in 
key industries such as machine tools, semiconductor manufacturing 
equipment and glass, are participating, and all 200 companies will be 
expected to draw up and implement voluntary import plans.  The 
Partnership has three goals:  (1) import expansion--further expansion of 
imports of all goods including specific efforts to expand imports of 
parts, components and capital goods; (2) expansion of procurement from 
local domestic suppliers by Japanese affiliated companies operating 
abroad; and (3) promotion of inter-corporate cooperation--cooperation 
with foreign firms in establishing themselves in the Japanese market, 
including through direct investment.   
 
L.  Membership in Free Trade Arrangements 
 
      Japan is not a member of any free trade arrangements. 
 
 
VII.  INVESTMENT CLIMATE 
 
A.  Government attitude toward private foreign investment  
 
      1.  Openness to Foreign Investment  
 
      Japan is open to foreign direct investment with certain 
exceptions, but the level of FDI in Japan (compared to its trading 
partners) remains quite low. 
      Japan has progressively liberalized its foreign direct investment 
regime.  In April 1991 the Japanese Government amended the Foreign 
Exchange and Foreign Trade Control Law (which also controls foreign 
investment), replacing the long-standing "prior notification" 
requirement for all foreign investment with an "ex post facto 
notification" requirement for investment in non-restricted industries 
(effective January 1, 1992).  "Prior notification" (and case-by-case 
approval) is now required for investment in restricted areas only (see 
list at Appendix A).  U.S. investment has occurred in some restricted 
sectors (particularly in the petroleum industry), but the criteria for 
defining and controlling these sectors remain unclear and potentially 
inhibit further investment.  In the sectors which require prior 
notification, the Japanese Government retains the right to restrict FDI 
if it determines that the investment would  "seriously and adversely 
affect the smooth performance of the national economy."  The government 
does restrict industrial development in certain areas to prevent further 
over-concentration in the environs of Tokyo, Osaka, and Nagoya.  These 
restrictions are applied on a non-discriminatory basis to both foreign 
and domestic companies alike.  Many rural prefectural governments 
outside these three areas actively seek foreign direct investment in 
their industrial parks.  Based on Structural Impediments Initiative 
(SII) agreements, the Japanese Government amended the Large Retail Store 
Law in May 1991 (effective January 31, 1992) making it easier for 
foreign retailers to invest in Japan.  In April, 1994, the Japanese 
Government relaxed the Law further, taking such measures as: expansion 
of floor space subject to a reporting obligation from 500 square meters 
to 1,000 square meters; extension of closing time subject to a reporting 
obligation from 7:00 p.m. to 8:00 p.m.; and, reduction in the number of 
annual closing days subject to a reporting obligation.  Previously, 
stores were required to inform the Ministry of International Trade and 
Industry, if they planed to be closed fewer than 44 days per year.  This 
requirement has been reduced to 24 days (effective May 1, 1994).  
Retailers, however, continue to face major challenges breaking into the 
domestic distribution network.  Restrictions on foreigners acquiring 
agricultural land and real estate for investment remain.  
      The U.S. business community in Japan cites "administrative 
guidance" as a form of restriction on foreign direct investment in 
Japan.  In general, business in Japan is more regulated than in the 
U.S., with much of the regulation taking place privately through 
consultations between the involved government ministry and industry.  
There is no effective counterpart to the U.S. Administrative Procedures 
Act in Japan requiring that regulatory laws and practices be formulated 
in public.  Based on SII agreements in 1992, an Administrative Procedure 
Law took effect October 1, 1994.  It contains some relatively weak 
provisions intended to promote greater transparency in administrative 
guidance, but lacks provisions for rule-making procedures and fails to 
address many of the transparency issues raised by foreign investors. 
      Tax Treatment of Foreign-owned Firms:  Local branches of foreign 
firms are generally taxed only on income derived from within Japan, 
whereas domestic Japanese corporations are taxed on their worldwide 
income.  Local branches of foreign firms are also subject to a local 
inhabitants' tax on the same basis as a domestic firm.  Calculation of 
taxable income and allowable deductions, and payments of consumption tax 
(sales tax) introduced in JFY 1989, and land value tax introduced in JFY 
1992 are otherwise the same as those for domestic companies, with 
national treatment for foreign firms.  The Corporate Tax Act classifies 
corporations as either foreign or domestic depending on the location of 
the head office, without regard to the place of incorporation.  The 
U.S.-Japan Tax Treaty provides for the avoidance of double taxation.    
      Dividends distributed by a domestic Japanese firm are subject to a 
20 percent withholding tax; the U.S.-Japan tax treaty reduces this tax 
to 10 percent for American shareholders.  Interest payable to a 
nonresident is normally subject to withholding of 20 percent, but the 
tax treaty reduces this to 10 percent, as long as the interest is not 
attributable to a permanent establishment in Japan.  Royalties and fees 
paid to a foreign licensor by a Japanese licensee are subject to normal 
withholding of 20 percent, reduced to 10 percent by the tax treaty.    
      Investment Incentives:  The Japanese Government established a new 
law in March 1992, entitled a "Law on Extraordinary Measures for the 
Facilitation of Imports and Foreign Direct Investment in Japan" 
(effective July 16, 1992; valid until May 29, 1996).  Under the law (as 
subsequently amended), the Government provides to eligible foreign firms 
in Japan (for criteria, see appendix B) a preferential tax treatment of 
10-year extension of carry-over periods for losses, exemption from 
special land-holding taxes, and exemption from stamp duties.  Also under 
the law, the Government in June 1993 established a government-financed 
business supporting company for foreign firms in Japan, called Foreign 
Investment in Japan Development Corporation (FIND), whose stated purpose 
is to help foreign affiliates in Japan cope with difficulties facing 
foreign firms such as unique business practices and hiring qualified 
workers.    
      In 1984, the government-owned Japan Development Bank (JDB) 
established a new loan program specifically tailored to the promotion of 
foreign direct investment in Japan.  Foreign-owned companies (those in 
which the ratio of foreign capital is 50 percent or more) are eligible 
for long-term loans for capital investment.  The loan amount may be up 
to 60 percent of the total investment amount and the loan period can run 
as long as 30 years.  Interest rates are fixed for the life of the loan, 
and as of May 1995 were set at 3.50 percent, compared to the 3.6 percent 
private long-term prime rate.  Similar low-interest loan facilities for 
foreign firms have been established by the Okinawa and the Hokkaido-
Tohoku Development Finance Corporations as an incentive to foreign firms 
investing in these regions.    
      Another incentive program is the "technopolis" project sponsored 
by the Ministry of Trade and Industry (MITI).  Under the Law for 
Accelerating Regional Development Based upon High-Technology Industrial 
Complexes, MITI and prefectural governments provide various types of 
assistance to companies locating in areas designated for development as 
a technology-intensive zone, or technopolis.  The aim of this program is 
to encourage development in relatively underdeveloped rural areas by 
forming high-tech industrial complexes.  As of May 1995, there were 26 
areas throughout Japan with the technopolis designation.  Preferential 
depreciation and land tax are offered to technopolis investors.  The JDB 
loans and the technopolis program are available equally to both domestic 
and foreign companies.    
  
      2.  Conversion and Transfer Policies  
      Under the present law, all foreign exchange transactions are 
authorized -- including transfers of profits and dividends, interest, 
royalties and fees, repatriation of capital, and repayment of principal 
-- unless expressly prohibited.  Foreign exchange transactions must go 
through authorized foreign exchange banks and must be reported.  There 
are also no restrictions on reinvestment, other than the same 
restrictions on initial investment outlined above.  Netting of 
settlements is prohibited, unless specifically permitted.  
 
      3.  Expropriation and Compensation  
 
      In the post-war period the Japanese Government has not 
expropriated or nationalized any enterprises.  Expropriation or 
nationalization is unlikely in the foreseeable future.    
 
      4.  Dispute Settlement  
 
      There have been no major investment disputes since 1990.  There 
are no outstanding expropriation or nationalization cases in Japan, and 
no cases of international binding arbitration of investment disputes 
between foreign investors and the Government of Japan since 1952.  Japan 
is a member of the New York Convention of 1958 on the Recognition and 
Enforcement of Foreign Arbitral Awards.  However, Japan is not a 
hospitable forum for international commercial arbitrations.  Unlike the 
practice in other OECD countries, where parties to arbitrations can be 
represented by the person of their choice, in Japan, arbitration 
proceedings are viewed as the exclusive province of Japanese bengoshi 
(barristers) with only limited exceptions.  As a result, proceedings are 
commonly handled in Japanese and documents must be translated into 
Japanese, even though the contract and all negotiations were in English.  
      There are no legal restrictions on access by foreign investors to 
Japanese lawyers.  However, limitations on legal practice in Japan by 
foreign lawyers, the prohibition on Japanese bengoshi joining foreign-
based law firms and the small number of Japanese bengoshi capable of 
handling international business transactions all limit the ability of 
foreign investors to obtain proper legal advice on doing business in 
Japan.  Foreign lawyers licensed in Japan under the 1986 Foreign Lawyers 
Law are not allowed to advise foreign investors on investing in Japan as 
the law views such advice as the illegal practice of Japanese law.  The 
unduly restrictive provisions of Japanese law and the even more rigid 
enforcement of these restrictions by the Federation of Japanese Bar 
Associations (Nichibenren) deprive foreign investors of the opportunity 
to get the optimal combination of legal advice which a system more in 
accord with current standards of international legal practice would 
allow.  Recent changes proposed by the Japanese government are unlikely 
to remedy this unsatisfactory situation.   
      Japan has civil courts for enforcing property and contractual 
rights, and the courts do not discriminate against foreign investors, 
but Japanese court procedures make it unattractive to litigate 
investment and business disputes.  Japanese courts are horrendously 
slow; there are no discovery procedures to compel disclosure of evidence 
from the opposing party; the courts essentially lack contempt powers to 
compel a witness to testify or a party to comply with an injunction; and 
timely temporary restraining orders and preliminary injunctions are 
almost impossible to obtain.  While filing fees for large civil cases 
were reduced in 1992, they are still based on the amount of the claim, 
rather than being a flat fee as in the United States.  Usually a 
bengoshi requires an up-front payment before commencing a case; 
contingency fees, while not unknown, are not common.  Since there are 
insufficient numbers of judges, the courts have high caseloads with 
witness examinations scheduled one month or more apart--leading to 
trials typically lasting 2-5 years in the district courts and a total of 
5-10 years for all appeals to be settled.  The losing party can delay 
execution of a judgment merely by appealing--no stay or appeal bond is 
usually necessary.  On most appeals to the high courts, additional 
witnesses and other evidence are allowed.  There is no strict liability 
law, no class actions, no jury trials, no treble or punitive damages, 
almost no attorneys fees.  A limited product liability law will take 
effect July 2, 1995.  Courts do have powers to encourage mediated 
settlements, but are passive and deferential to the governmental 
administration.  This deference is a deterrent to using the courts to 
address significant social questions, challenge the government, or 
pursue corporate liability.  As a result, and due to the Japanese 
government's policy of artificially restricting the number of new 
bengoshi to 700 per year, the net effect is to strongly encourage 
companies to settle out of court.  Also, the yakuza--Japanese gangsters-
-not infrequently engage in activities that are generally handled by 
lawyers in other societies, collecting personal and commercial debts, 
settling auto accidents, and evicting tenants.  
 
      5.  Performance Requirements/Incentives  
 
      Japan does not maintain a system of performance requirements.  
Japan also maintains no requirements for local management participation 
or local control in joint ventures or other forms of direct investment, 
except in restricted sectors.     
 
      6.  Right to Private Ownership and Establishment  
 
      Japan secures the right for foreign and domestic private 
enterprises to establish and own business enterprises and engage in all 
forms of remunerative activity.    
 
      7.  Protection of Property Rights  
 
      Protection of intellectual property rights should be an integral 
part of every U.S. exporter's basic market strategy in Japan.  It is 
necessary to file applications to register patents and trademarks in 
Japan to obtain protection, but prior filing in the United States can 
provide certain advantages if applications are filed promptly in Japan.  
A U.S. patent or trademark attorney can provide advice, but it will be 
necessary to hire a Japanese attorney (bengoshi) or patent practitioner 
(benrishi), preferably one with an established relationship with the 
U.S. exporter's U.S. attorney, to prosecute the patent or trademark 
application.  Except for voluntary registration of computer programs, 
there is no system of copyright registration, however, and U.S. 
copyrights and sound recordings are recognized in Japan by international 
treaty.  U.S.-produced semiconductor chip design-layouts are protected 
under a special law if registered with the Industrial Property 
Cooperation Center. 
      Obtaining and protecting patent and trademark rights in Japan can 
be time-consuming and costly.  While the process to safeguard such 
rights might seem prohibitive, lack of protection would permit 
competitors both in and outside of Japan to copy your product or 
production process.  Even when intellectual property rights have been 
acquired, pirating of technology and designs can occur in Japan, as it 
could in almost any country.  Each company in a trading or licensing 
agreement should understand clearly what its rights and obligations are 
with respect to the intellectual property rights owned or acquired by 
the other.  Such a clear understanding helps to create a good rapport 
based on mutual trust, thereby ensuring the success of the trading or 
licensing agreement. 
 
            a.  Patents, Trademarks, Utility Models and Designs 
 
      Unlike U.S. patent law, patents are granted to the first to file 
an application for a particular invention, rather than to the first to 
invent.  Although in 1995 Japan will start accepting filings in English, 
to be followed by a translation, companies should ensure that 
translations of their applications are perfect, as significant negative 
ramifications may result from errors in translation.  Prompt filing in 
Japan is important because printed publication of a description of the 
invention anywhere in the world, or knowledge or use of the invention in 
Japan, prior to the filing date of the Japanese application would 
preclude the grant of a patent on the application.   Also unlike the 
United States, where examination of patent applications is automatic, an 
applicant must request examination of his patent application in Japan 
within seven years of filing.   
      As is true in many countries of the world, but not in the United 
States, all patent applications are published 18 months after filing.  
If, during the examination, the Japanese Patent Office (JPO) finds no 
impediment to the grant of a patent for a particular invention, it 
publishes the patent application a second time, including any changes 
that have been made during the examination.  Under a recent amendment to 
the Patent Law, parties may contest the terms of a patent grant 
immediately after issuance by the Patent Office, rather than prior to 
registration as had been the previous practice.  The patent is granted 
and valid for 20 years from the date the application is filed.   
      It takes a long time to obtain a patent in Japan -- an average of 
five to six years, compared to 18 months in the United States.  An 
applicant can request accelerated examination; this procedure is 
infrequently used as it has substantial associated costs.  However, 
companies filing patent applications in several countries may wish to 
request an accelerated examination.  During the examination period, 
limited effective legal protection exists.     
      Japan's Trademark Law protects trademarks and service marks.   As 
is the case with patent applications, a resident agent (usually a lawyer 
or patent agent) must prosecute the trademark application.  As with the 
processing of patent applications, Japan's trademark registration 
process is very slow.  It takes an average of 4 years to process a 
trademark registration in Japan, compared with an average of 13 months 
in the United States.  Any company planning on doing business in Japan 
should file for trademark registration as early as practicable.   
      Japan's Patent Law also allows registration of utility models, a 
form of minor patent with an 8-year term of protection.  A separate 
Design Law allows protection of designs, giving 15 years of protection. 
 
            b.  Unfair Competition and Trade Secrets 
 
      The only protection available for a trademark in Japan prior to 
registration is under the Japanese Unfair Competition Law.  Under this 
law, the owner of the mark must demonstrate that the mark is well-known 
in Japan and that consumers will be confused by the use of an identical 
or similar mark by the unauthorized user. 
      Japan enacted amendments to the Unfair Competition Law in 1990 
which provide some measure of protection from theft of trade secrets 
such as know-how, customer lists, sales manuals, and experimental data.  
The law which was amended completely in 1993, provides for injunctions 
against wrongful use, acquisition, or disclosure of a trade secret by 
any person who knew or should have known that the information in 
question was misappropriated.  A problem with judicial procedure 
remains, and makes enforcement of rights without loss of the trade 
secret difficult. 
 
      8.  Regulatory System: Laws and Procedures  
 
      Japan's economy remains highly regulated, which creates trade 
friction by impeding imports and investment, raises costs for Japanese 
businesses and consumers, and slows new employment and business 
formation.  The Government of Japan and the Japanese business community 
therefore identify deregulation as a high-priority.  But opposition 
remains strong to specific deregulation proposals from vested interests, 
from civil servants who write and enforce the rules to workers and 
management in protected sectors.  The Japanese Government issued a 
three-year deregulation action plan April 1, 1995, covering such areas 
as land use, construction materials, medical products, and anti-monopoly 
act enforcement.  Discussions continue between the US and Japanese 
governments on deregulation measures that would increase imports and 
foreign direct investment into Japan.  
      Compared with the U.S., anti-monopoly laws are not as strictly 
enforced in Japan.  Based on SII agreements, the Japanese Government 
amended the Anti-monopoly Act in April 1991 (effective July 1, 1991), 
and the Japan Fair Trade Commission published a "Guideline for 
Management of the Anti-monopoly Act," which clarifies the criteria for 
applying the Act to business practices, particularly "keiretsu" 
(corporate grouping) transactions.  In the second annual report of SII 
in 1992, the Japanese Government pledged to carry out a sweeping review 
of Anti-monopoly Act exempted cartel systems under individual laws (47 
systems under 28 laws as of June 1992) by the end of JFY 1995 (March 31, 
1996).  
 
      9.  Capital Markets and Portfolio Investment  
 
      Japan maintains no formal restrictions on inward portfolio 
investment.  However, corporate practices such as cross-share holding 
and informal restrictions on management participation of foreign 
shareholders may de facto limit the extent of foreign portfolio 
investment.    
      Domestic and foreign investors have free access to a variety of 
credit instruments at market rates.  In general, foreign companies in 
Japan have not experienced significant difficulties in obtaining 
funding.  Most foreign firms secure short-term credit by borrowing from 
Japanese commercial banks or one of the 143 branches of the 90 foreign 
banks located in Japan (as of February, 1995).  Medium-term loans are 
available from special long-term credit banks (e.g., the Industrial Bank 
of Japan) which lend to both foreign and domestic companies, as well as 
from trust banks and life insurance companies.  The government-owned 
Japan Development Bank does make long-term loans, but long-term funding 
is more difficult for foreign companies to arrange in Japan.  Japan's 
capital markets still remain comparatively underdeveloped, but an active 
private placement market does exist.  Large foreign firms have tended to 
use foreign sources for long-term financial needs.    
 
      10.  Political Violence  
 
      Political violence in general is rare in Japan, and acts of 
political violence involving American business interests are virtually 
unknown.  
 
B.  Bilateral Investment Agreements  
 
      The 1952 U.S.-Japan Treaty of Friendship, Commerce and Navigation 
gives national treatment and most favored nation treatment to most U.S. 
investments in Japan.  Japan has similar bilateral investment protection 
treaties with Egypt, Sri Lanka, the People's Republic of China, and 
Turkey.  Japan is presently negotiating bilateral investment treaties 
with Pakistan, five of the six ASEAN countries (Malaysia, Thailand, the 
Philippines, Singapore, and Indonesia), and five East European countries 
(Poland, Hungary, Romania, Bulgaria, and the Czech Republic).  Slovakia 
and two Latin American countries (Argentine and Peru) have been 
requesting Japan to establish such a treaty, but actual negotiations 
have not yet begun.    
  
C.  OPIC and Other Investment Insurance Programs  
 
      OPIC insurance and finance programs are not available in Japan.  
Japan has been a member of the Multilateral Investment Guarantee Agency 
(MIGA) since it was established in 1988.  Japan's capital subscription 
to the organization is the second largest among member countries, after 
the United States.  
 
D.  Labor  
 
      One of the most commonly noted features of Japanese labor and 
management practice has been the lifetime employment system.  Most large 
companies traditionally hire both white-collar and blue-collar workers 
directly after graduation, and provide extensive training programs for 
most workers.  Companies have been willing to go to the expense of 
training because both the employer and the employee generally share the 
expectation that the worker will stay with the same company until 
retirement.  Workers generally have been promoted up the company ladder 
based primarily on seniority and education, rather than job performance.  
But the prolonged period of slow growth has put severe pressure on 
companies to implement measures including forced leave, layoffs and cuts 
in new hiring.  The traditional pattern of lifetime employment is under 
strain, but Japanese firms still tend to favor reduction in work hours 
(including overtime) over outright firing of employees.  
      Japanese production workers tend to be some of the most productive 
in the world, although average productivity still lags behind the U.S.  
The work force is highly educated, disciplined, and motivated.  Labor 
unions are usually organized on an enterprise basis, rather than by 
craft.  Strikes occur, usually during the annual spring wage 
negotiations, but last only a short time.  There have been fewer strikes 
with the prolonged recession.  
      Nominal wage levels, on a dollar basis, have risen significantly 
due to the yen's sharp appreciation relative to the US dollar, but wage 
hikes have been quite moderate with a roughly 2.3 percent average 
increase in 1995, for example.  Companies are expected to offer a number 
of fringe benefits not commonly given in the U.S., such as low-cost 
housing for both single and married employees, recreation facilities, 
and low interest loans for home purchases; and annual summer and winter 
"bonuses" can be as much as the equivalent of three months wages.  
      Some foreign companies have had difficulty in recruiting Japanese 
management staff, in part due to the perceived lack of security in 
working for a foreign company.  Many companies find they have to pay 
salaries well above the average in order to recruit top-quality people.  
However, foreign firms are sensitive to this problem, and are stepping 
up their efforts to recruit top university graduates.  
 
E.  Foreign-Trade Zones/Free Ports  
 
      Japan no longer has any free-trade zones or free ports.  Customs 
authorities, however, do allow the bonding of some warehousing and 
processing facilities in certain areas adjacent to ports on a case-by-
case basis.    
      As discussed in Section A above, the Japanese Government 
established a new law in March 1992, entitled a "Law on Extraordinary 
Measures for the Facilitation of Imports and Foreign Direct Investment 
in Japan" (effective July 16, 1992; valid for three years).  Under the 
law, the Government helps increase access to the Japanese market for 
foreign goods and capital at government-designated "Foreign Access 
Areas," in Customs authorities permit bonding.    
 
F.  Capital Outflow Policy  
 
      In the late 1980s, Japan became a major exporter of capital.  
Post-1985 yen appreciation promoted many Japanese companies to make 
major direct and portfolio investments in other countries.  Japan 
experienced an unusual net inflow of long-term capital in 1991.  In 1992 
and 1993, Japan returned to its position as a net exporter of long-term 
capital, albeit in a lesser magnitude than the late 1980s.  At the end 
of JFY 1994, Japan's cumulative direct investment abroad totaled $463 
billion, of which 85 percent was made since 1985.    
      The Japanese government believes that overseas direct investment 
will expedite the industrial adjustment of the Japanese economy through 
its effects of replacing exports and expanding re-imports from Japanese 
"transplants" overseas.  The government has been encouraging Japanese 
firms to invest abroad by offering loans and insurance.  Investment in 
developing countries also is viewed as a means of promoting the economic 
well-being and development of those countries.  Investment in developed 
countries is encouraged as a means of securing access to markets and of 
easing protectionist sentiments in areas where Japanese imports have 
heavily penetrated local markets.    
 
Table A: 
 
Restricted Investment Sectors Requiring Prior Notification:  
 
-     Agriculture  
-     Forestry  
-     Fisheries  
-     Metal Mining  
-     Coal and Lignite Mining  
-     Crude Petroleum and Natural Gas Production  
-     Non-metallic Mineral Mining  
-     Tobacco Manufactures  
-     Fur apparel and apparel accessories  
-     Manufactures of Miscellaneous Chemical and Allied   
      Products.  (This sector is non-restricted except for  
      explosives, gelatin, and adhesives.)  
-     Paving Materials  
-     Miscellaneous Petroleum and Coal Products.  (This  
      sector is non-restricted except for petroleum  
      products.)  
-     Manufacture of Rubber and Plastic Footwear and its  
      Accessories  
-     Leather Tanning and Manufacture of Leather Products   
      and Skins  
-     Manufacture of Electrical Generating, Transmission,   
      Distribution, and Industrial Apparatus  (This sector  
      is non-restricted except for industries related to  
      aircraft, ordnance, atomic power, and space  
      development.)  
-     Manufacture of Communication Equipment and Related  
      Products.  (This sector is non-restricted except for  
      industries related to aircraft, ordinance, atomic  
      power, and space development.)  
-     Ship Building and Repairing, and Manufacture of Marine  
      Engines.  (This sector is non-restricted except for  
      industries related to aircraft, ordinance, atomic  
      power, and space development.)  
-     Manufacture of Aircraft and Parts  
-     Miscellaneous Transportation Equipment.  (This sector  
      is non-restricted except for industries related to  
      aircraft, ordinance, atomic power, and space  
      development.)   
-     Manufacture of Ordnance  
-     Electricity Generation and Distribution  
-     Gas  
-     Heat Supply  
-     Water and Water Supply  
-     Railways, Coastwise Transport, and Inland Water  
      Transport  
-     Air Transport  
-     Airplane Services  
-     Ordinary Warehousing  (This sector is non-restricted   
      except for industries related to petroleum reserves.)  
-     Communication  
-     Postal Services  
-     Telephone and Telegraph, Except Wire Broadcasting   
      Telephone  (This sector is non-restricted except for  
      Type I Telecommunications Business defined by Article   
      6 of Telecommunications Business Law.)  
-     Incidental to Communication  (This sector is  
      non-restricted except for telecommunications of Type I  
      Telecommunications Business carrier in accordance with  
      Article 15 of Telecommunications Business Law.)  
-     Regional Financial Institutions for Agriculture,  
      Forestry, and Fishery  
-     Exchanges and Exchange Clearing Houses  
-     Bicycle, Horse, Motorcar, and Motorboat Race Companies  
-     Radio and Television Broadcasting  
-     Guard Services  
 
Designated technologies requiring prior approval and technology import 
contract:  aircraft, arms, explosives manufacturing, nuclear energy, and 
space development.  
 
Table B:  
 
Criteria for Eligible Foreign Affiliates:   
 
Firms with more than one-third of their capital owned by foreign firms 
which:  
-     (1)  have established any manufacturing, designing, developing and 
sales facilities within five years, and  
-     (2)  have business activities which are regarded as contributing 
to:  (a) the harmonious development of the Japanese economy with the 
international economic community;  (b) the vitalization of the Japanese 
economy and improvement in the life of Japanese citizens through 
expanding the wide range of product choice for Japanese consumers; and 
(c)  the stimulation of the exchange of technologies and know-how 
between Japan and foreign countries.  
 
G.  Investment Data  
 
Table 1:  Foreign Direct Investment in Japan, by Country  
  
(Unit: Million Dollars; Annual Flow; Reporting Basis)  
-----------------------------------------------------------  
                   JFY 1994    JFY 1993     Cum. Total  
                                         (JFY 1950-1994)  
----------------------------------------------------------- 
North America        1,915       1,079            15,419  
  U.S.               1,596         930            13,770  
  Canada               319         150             1,649  
  
Europe               1,512       1,026            10,335  
  Netherlands          523         283             2,800  
  Germany              502         110             1,859  
  Switzerland          154         149             2,149   
  U.K.                 123          67             1,526  
  France                66          79               663  
  Other                145         339             1,338  
  
ASIA                   258         464                NA  
  Hong Kong             77          31               721  
  S. Korea              66           4                NA  
  Singapore             58         268                NA  
  Taiwan                25         143                NA  
  China                  7          15                NA  
  Other                 24           3                NA  
  
Other Regions          161         165                NA  
  
Re-Investment          310         344             3,709  
  
Total                4,155       3,078            34,088  
----------------------------------------------------------- 
Source: Ministry of Finance  
Notes:  
(1)  "Cumulative Total" for the period JFY 1950-84 includes only 
acquisitions of stocks and equities; it does not include liquid borrowed 
capital.    
(2)  Data since January 1992 do not include acquisitions of less than 10 
percent of non-listed companies' stocks and equities; acquisitions 
subject to the prior notification requirement are included.    
 
Table 2:  Foreign Direct Investment in Japan, by Industry  
 
(Unit: Million Dollars; Annual Flow; Reporting Basis)  
------------------------------------------------------------                          
JFY 1994       JFY 1993     Cum. Total  
                                            (JFY 1950-1994)  
----------------------------------------------------------- 
Manufacturing      1,965         1,564            18,804  
 
  Machinery        1,280           672             9,220  
  Chemical           221           459             5,451  
  Metals             183           150             1,100  
  Petroleum          147            50             1,138  
  Rubber/leather      41            44               290  
  Foods               30            87               564  
  Glass/ceramics      18             4               174  
  Spinning             1             6                90  
  Other               44            92               779  
   
Non-Manufacturing  2,189         1,514            15,283  
 
  Commerce/Foreign  
   Trade           1,087           879             6,887  
  Banking/Insurance  671            34             2,423  
  Services           358           207             2,994  
  Real Estate         31            90             1,239  
  Communications      29            27               352  
  Transportation       8            43               235  
  Construction         4             1               118  
  Other                1           233             1,035  
 
Total              4,155         3,078            34,088  
----------------------------------------------------------- 
Source: Ministry of Finance  
Notes:  
(1)  "Cumulative Total" for the period JFY 1950-84 includes only 
acquisitions of stocks and equities; it does not include liquid borrowed 
capital.    
(2)  Data since January 1992 do not include acquisitions of less than 10 
percent of non-listed companies' stocks and equities; acquisitions 
subject to the prior notification requirement are included.    
 
Table 3:  Japanese Direct Investment Abroad, by Country  
 
(Unit: Million Dollars; Annual Flow; Reporting Basis)  
-----------------------------------------------------------  
                  JFY 1994    JFY 1993    Cumulative Total  
                                           (JFY 1951-1994)  
-----------------------------------------------------------  
North America       17,823       15,287        202,690  
  U.S.              17,331       14,725        194,429  
  Canada               492          562          8,261  
 
Europe               6,230        7,940         89,867  
  U.K.               2,169        2,527         33,830  
  Netherlands        1,050        2,175         19,447  
  Germany              727          760          8,061  
  France               418          545          6,392  
  Luxembourg             14           44          6,000  
 
Oceania              1,432        2,035         27,250  
  Australia          1,265        1,904         23,932  
  New Zealand          115           34          1,376  
 
Asia                 9,699        6,637         76,216  
  China              2,565        1,691          8,729  
  Indonesia          1,759          813         16,981  
  Hong Kong          1,133        1,238         13,881  
  Singapore          1,054          644          9,535  
  Malaysia             742          800          6,357  
  Thailand             719          578          7,184  
  Philippines          668          207          2,817  
  S. Korea             400          245          5,268  
  Taiwan               278          292          3,997  
   
Middle East            290          217          4,737  
  Saudi Arabia/Kuwait   93           22          1,680  
  U.A.E.                93          159            787  
  Saudi Arabia           1            -            471  
  Iran                   -            -          1,385  
 
Latin America        5,231        3,370         55,148  
  Panama             1,655        1,390         21,784  
  Brazil             1,235          419          8,849  
  Bermuda              995          501          3,557  
  Mexico               613           53          2,793  
  Cayman               272          841          9,249  
  Bahamas               11           38          3,744  
   
Africa                 346          539          7,698  
  Liberia              339          502          6,614  
  Zaire                  -            -            282  
 
Total               41,051       36,025        463,606  
------------------------------------------------------  
Source: Ministry of Finance  
 
Table 4:  Japanese Direct Investment by Industry;  
          in the World and in North America   
 
(Unit: Million Dollars; Annual Flow; Reporting Basis)  
--------------------------------------------------------   
                 North America              World       
              -------------------    -------------------   
        JFY    1994  1993   Cum.    1994   1993    Cum.  
---------------------------------------------------------  
Manuf.        4,177  4,147  54,514  13,784 11,132 128,896  
 
 Food           387    107   2,694   1,260    888   7,383  
 Textiles        66     37   1,095     641    498   6,182  
 Wood/Pulp      304     80   2,588     140    346   4,197  
 Chemicals      402    652   6,575   2,601  1,742  18,901  
 Steel          380    225   5,252   1,038    754  13,832  
 Electrical  
  Machinery     740  1,445  14,152   2,634  2,762  29,868  
 Transport  
  Machinery     594    294   6,606   2,021    942  17,029  
 Other Mach.    321    399   5,122   1,622  1,171  13,113  
 Others         986    907  10,431   1,826  2,029  18,392  
 
Non-Manuf.   10,384 11,042 128,637  26,877 24,627 327,170  
     
 Agri./Forestry  38     12     522     156     73   2,002   
 Fisheries        1     11     200     212     56   1,169   
 Mining          83     50   2,534     475    946  20,234  
 Construction   189    194   1,750     357    274   3,984  
 Commercial   1,667  1,805  22,879   4,393  5,096  49,755  
 Banking &   
  Insurance   1,648  2,520  25,181   6,499  6,401  87,770  
 Service      4,376  1,889  29,690   7,061  3,543  57,213  
 Transport.     102    267   1,036   2,603  2,157  26,412  
 Real Estate  2,281  4,285  42,611   5,122  6,070  71,088  
 Other            0      8   2,233       -     10   7,543  
 
Establishment  
  of Branches    11     99   1,232     391    266   6,946  
 
Total:       14,572 15,287 184,868  41,051 36,025 463,606  
---------------------------------------------------------  
Source: Ministry of Finance  
 
Table 5:  Foreign Direct Investment in Japan  
          as a Percentage of GDP  
   
(in Billion Yen)  
 
                                 JFY 1994      JFY 1993  
                                 --------      --------  
Nominal GDP                         n.a.      469,266.2  
Annual FDI Inflow (A)               412.0         358.6  
Cumulative FDI Stock (B)          3,388.3       3,487.2  
(A)/GDP                             n.a.         0.08 pct  
(B)/GDP                             n.a.         0.74 pct  
                                (Yen 99.4/$) (Yen 116.5/$)  
Source:  Ministry of Finance  
  
H.  MAJOR FOREIGN INVESTORS   
 
      The Japanese Government no longer releases this data, but it is 
available commercially from wide range of sources, including US and 
Japanese securities houses, accounting firms, and financial 
publications.  
 
 
VIII.  TRADE AND PROJECT FINANCING 
 
A.  Brief Description of Banking System 
 
      1.  Banks 
 
      The connections between banking institutions and corporations are 
much closer in Japan than in the United States and go far beyond the 
traditional lender/borrower relationship.  Japanese banks are often 
shareholders in medium-size as well as large corporations.  As Japanese 
companies are usually highly leveraged in comparison with their U.S. 
counterparts, banks take an active interest in the operations of the 
Japanese firm. 
 
      This unique relationship between a company and bank is a 
longstanding one--a Japanese company rarely changes banks and would 
probably not "shop around" for better credit arrangements.  Even in 
times when financing is relatively easy, companies will borrow in excess 
of need in order to maintain good relations with their bank and to 
insure that funds will be available in leaner years.  Banks are often 
large shareholders in public corporations, have close relationships with 
both local governments and national regulatory agencies, and often have 
a coordinating function among their clients.  In large business deals, 
the bank's role, not just as lender, is key. 
      Japanese banks offer regular and time deposits and checking 
accounts for business.  Checks are negotiable instruments in effect 
payable to bearer, as opposed to "pay to the order of" checks common in 
the United States.  This limits the usefulness of checks, and in fact 
most money transfers are made by electronic bank transfer, which costs 
from 103 to 721 yen, or by cash.  The banks compete with the postal 
savings system for consumer deposits. 
 
      2.  Financial Intermediaries:  Trading Companies 
 
      The relationship among the trading company, end user and exporter 
is an important feature of the financing environment in Japan.  The 
Japanese general trading company is an integrated comprehensive 
organization and includes the functions of marketing and distribution, 
financing and shipping, and gathering commercial information.  They 
perform functions that in the United States would be performed by import 
export companies, freight forwarders, banks, law firms, accounting firms 
and business consultants. 
 
      3.  Domestic Consumer Financial Environment 
 
      Personal checking accounts are almost unknown and most individuals 
and many firms use bank transfers to settle accounts.  Cash settlement 
is very common among consumers.  For example, in direct marketing 
transactions, the use of cash envelopes available through post offices 
is the rule.  Although one U.S.-based bank now operates 24-hour cash 
machines, generally, Japanese bank cash machines close at 6 or 7 p.m. on 
weekdays and at 5 p.m. on Saturdays and Sundays; credit card cash 
machines are open later hours.  Some credit card companies are also now 
operating cash machines 24 hours a day.  Bank and other credit cards are 
easy to obtain and are widely accepted.  Over 226 million credit cards 
were owned Japanese consumers and consumer credit accounted 13.1 
trillion yen ($146 billion).  Since 1992, bank credit cards can offer 
revolving credit; usually, credit balances are paid in full by automatic 
debit from a bank account.  As to lending, major banks are shifting 
their target from major corporations, who can now raise funds in many 
ways, to individuals and small and medium-size companies, with an easier 
policy toward consumer finance than in past years.   
 
B.  Foreign Exchange Controls Affecting Trading 
 
      For the medium size U.S. exporter, foreign exchange regulations 
will have almost no impact on normal business transactions. 
 
C.  General Financing Availability 
 
    Japanese Banks 
 
      While some large U.S. companies in Japan have had strong 
relationships with the 11 large Japanese "city banks," most medium and 
small-sized U.S. firms complain that it is almost impossible to secure 
the kind of trade financing and factoring services needed for importing 
and distribution.  A firm's ability to borrow is often based more on the 
company's contacts and rapport with bank officials than on conventional 
U.S. standards of credit-worthiness.  Smaller firms report that they 
have been forced offshore to secure needed financing.  For U.S. 
companies with operations in Japan, teaming up with Japanese partners in 
a joint venture has been an advantage in receiving more preferential 
treatment from Japanese banks.   
      Larger Japanese banks present greater opportunities for financing 
the needs of U.S. companies in Japan than other banks.  American banks 
operating in Japan mainly focus on lending to subsidiaries of large 
American companies, while smaller Japanese banks generally have limited 
ability to help foreign companies due to limited staff who can analyze 
the credit-worthiness of foreign-owned companies who communicate in 
foreign languages.   
      When a Japanese bank extends credit to a foreign-owned company in 
Japan, they evaluate the financial status of the borrower and its parent 
company, in order to avoid significant risk.  Therefore, even if the 
Japanese subsidiary is financially strong, the parent company must 
usually guarantee the obligation. 
 
D.  How to Finance Exports/Methods of Payment 
 
      Although many forms of payment are in general use in international 
transactions, Irrevocable Letter of Credit (L/C) payable on sight is the 
most common form of settlement.  Deferred payments in transactions with 
U.S. firms are comparatively rare.  Within Japan, trade settlements are 
customarily done on the basis of promissory notes, typically 60 to 120 
days, and banks will provide short-term financing through discounting 
and rollover of notes.    
      As large Japanese general trading companies provide a trading and 
financial intermediary role for many small and medium-sized companies, 
L/Cs are often written in their name not in the name of the final end 
user of the product.  With the trading company taking on the risk of the 
transaction, the U.S. firm is protected from the possible bankruptcy of 
the smaller company.   
      There are a number of methods used to settle payment for sales 
transactions in Japan:  cash in advance, letter of credit used in 
conjunction with a documentary draft (time or sight), promissory note, 
documentary collection or draft, open account, and consignment sales.  
As with domestic sales, a major factor that determines the method of 
payment is the amount of trust in the buyer's ability and willingness to 
pay.  Because of the protection it offers to the American exporter and 
the Japanese importer, an irrevocable letter of credit is a popular form 
of settlement.  Another frequently employed payment option is the use of 
documentary collection or open account with international credit 
insurance which, unlike the letter of credit, allows the importer's line 
of credit to remain open.  At the same time, this option protects the 
exporter if the buyer goes bankrupt or cannot pay.  International credit 
insurance can be obtained from the Export-Import Bank of the United 
States or private insurers.   
      A payment method used in Japan and often unfamiliar to U.S. 
companies is the promissory note.  Promissory notes (yakusoku-tegata or 
yakute) act as I.O.U.s with a promise to pay at a later date, typically 
90 to 120 days.  Because Japanese banks will provide short-term 
financing through discounting and rollover of notes, most Japanese firms 
that accept promissory notes need a solid relationship with their banks 
or they will experience cash flow problems.   
 
E.  Types of Available Export Financing and Insurance 
 
      Government of Japan Loan Programs to Promote Imports and Foreign 
Investment 
 
      The Government of Japan's programs to promote imports and foreign 
investment in Japan include tax incentives, loan guarantees, low-cost 
loans to Japanese and foreign investors for import infrastructure 
through the Japan Development Bank, and other loan programs.  In 
addition, Japan now has 18 Foreign Access Zones (most of them are under 
construction) which offer enhanced import infrastructure facilities and 
eligibility for preferential tax treatment and low-cost loans, but it is 
unclear whether they will offer cost-effective bonded warehousing and 
manufacturing opportunities.    Both MITI and JETRO now have import 
divisions.   
      Six major public financing corporations, the Export-Import Bank of 
Japan, the Japan Development Bank, the Small Business Finance 
Corporation, Hokkaido Tohoku Development Finance Public Corporation, the 
Peoples Finance Corporation and the Japan Small Business Corporation, 
now make low-interest loans to encourage imports to and investment in 
Japan.  In addition, the services of the Japan Regional Development 
Corporation, a government-affiliated institution that develops business 
parks and provides long-term loans at low interest rates, are available 
to foreign companies. 
      The Export-Import Bank of Japan's import credit program for 
manufactured goods aims to provide support for the import of 
manufactured goods from developed countries to Japan.  Five-year secured 
or guaranteed loans up to 70 percent loan-to-value and credit lines at 
interest rates of 3.85% are available to importers, distributors and 
retailers incorporated in Japan who plan to increase their imports of 
manufactured goods excluding food products 10% or more over the previous 
year.  Direct 70% loan-to-value long-term loans to foreign exporters at 
rates of 3.85% are available for purchase of manufactured goods exported 
to Japan under deferred-payment terms, and to foreign manufacturers and 
intermediary financial institutions for investment in production 
facilities and equipment to be used to produce goods for the Japanese 
market.  
      The Japan Development Bank (JDB) and the Hokkaido-Tohoku 
Development Finance Corporation are offering two loan programs designed 
to increase imports into Japan.  These loans are available to foreign 
companies and foreign owned companies for 50% of loan value, or 60% 
within a Foreign Access Zone, for the expansion of business operations 
in Japan and also for those who are planning to establish a business in 
Japan.  The JDB and the U.S. Small Business Administration have 
published "Inside Washington and Tokyo:  A Business Guide to U.S. and 
Japanese Government Assistance" a free booklet that highlights JDB 
programs.  
      The Small Business Finance Corporation and People's Finance 
Corporation have expanded their program to facilitate import sales.  The 
program aims to provide support to small scale retailers, wholesalers 
and importers in Japan for investments to increase imports to Japan. 
      A program between U.S. Eximbank and the Export-Import Insurance 
Division of MITI (EID/MITI) provides for co-financing the insurance for 
U.S. exports to developing countries.  EID/MITI will also be providing 
advance payment insurance for U.S. exports to Japan.  For additional 
details on these and other cooperative financing programs, U.S. 
companies should contact U.S. Eximbank. 
      No insurance to U.S. exporters is available from the Japanese 
Government. 
 
F.  Project Financing Available 
 
      In addition to the investment loan programs from Japanese 
Government-affiliated lenders described in section E above, prefectures 
and municipalities offer various incentives, including special 
depreciation of business assets, tax deferments for replacement 
purchases of specific assets, exemption from special land-owning taxes 
assessed by municipalities, prefectural and municipal real estate 
acquisition, enterprise, and municipal property tax reductions, and 
subsidies for construction.  In addition, 33 prefectures out of 47 offer 
loan programs ranging from 100 to 200 million yen ($1 to $2 million), 
and up to 500 million yen ($5 million) in  Hokkaido and Kochi, to 
encourage companies to establish local operations. 
      Japan's venture capital specialist funds amounting to 750 billion 
yen ($7.5 billion) are only one-quarter the size of those in the United 
States.  Ministry of Finance encouragement of brokers to set tough 
standards for companies seeking to go public results in even the best 
companies taking up to a decade to get a listing on the over-the-counter 
share market--only  600 over-the-counter stocks are listed on the 4-year 
old JASDAQ, Japan's electronic OTC market.   
 
G.  List of Banks with Correspondent U.S. Banking Arrangement 
 
      Besides the 20 U.S. banks with branches in Japan, many U.S. banks 
have correspondent relationships with Japanese banks, who themselves 
have many branches and subsidiaries in the United States. 
 
 
IX.  BUSINESS TRAVEL 
 
A.  Business Customs 
 
      An understanding of Japanese business and social practices is of 
great importance in establishing and maintaining successful business 
relationships in Japan.  Indifference to local business practices may 
indicate a lack of commitment on the part of the exporter, and may lead 
to misunderstandings and bad feelings between both sides which could 
result in the loss of business opportunities.  One should not assume 
that because meetings and correspondence are carried out in English, 
Western social and business norms apply.   
      Japanese society is complex, structured, hierarchial, and group-
oriented with strong emphasis on maintaining harmony and avoiding 
surface confrontation.  Japanese religious practice tends to be 
socially-oriented and selective rather than a matter of deep personal 
commitment; ethics tend to be situational.  Building relationships 
(which will probably precede the first sale) should emphasize mutual 
trust, confidence, loyalty, and commitment for the long term. 
      The concept of mutual social obligation ("giri") is important.  
The obligation to repay a favor only applies if there is a strong bond 
between the parties.  A longstanding successful business relationship 
may allow each side to grant each other favors to be repaid later, even 
if not stipulated in a contract.  Existing obligations may surpass 
economic interests, which helps explain why a superior product at a good 
price may not be enough to break into this market. 
      Group decision making is emphasized in Japan and has been 
generally described as bottom up rather than top down.  Family 
businesses founded since WWII and smaller second tier firms are 
exceptions to this rule.  However, even in the large family firms, where 
decisions are made at the top, the process is usually managed so that 
company members have a sense of participation.  This group decision-
making tends to be slower.  Recognizing that it takes a longer time to 
cultivate business relationships in Japan than in the United States, 
American business executives should not expect to make a deal in just a 
few days or they will depart in frustration, having made no progress.  
Follow-up upon return to the states is vital.  Likewise, American 
business people should recognize the importance of working with the 
staff-level of their Japanese counterparts and not exclusively with the 
executive level. 
      Gift giving is expected on many business occasions in Japan.  
Regional U.S. gifts or company-logo gifts are appropriate.  Quality is 
important, but the gift does not have to be expensive.  The packaging of 
the gift is as important as the gift itself and should be done 
professionally.  In Japan, sets of four are considered unlucky (the 
number 4 is pronounced the same as the word for death).  Gifts that can 
be shared among a group are appropriate. 
      Business travelers to Japan should have bilingual business cards 
with the travelers title.  Business cards are exchanged to formalize the 
introduction process and establish the status of the parties relative to 
each other.  Japanese bow when greeting each other but, will expect to 
shake hands with foreign executives.  A slight bow in acknowledgement of 
a Japanese bow is appreciated.  Japanese executives deal on a last name 
basis in business relationships, and initial business and social 
contacts are characterized by politeness and formality. 
       Using a professional interpreter in business meetings is highly 
recommended, although expensive, even if the Japanese side is supplying 
one and even if the Japanese side speaks good English.  This shows 
proper preparation, gives an opportunity to observe the other side more 
closely, and assures better communication. 
      A written contract, even if less detailed than a contract between 
two U.S. companies, is essential to meet legal, tax, customs, and 
accounting requirements.  Contractual commitments are perceived as 
representing long-term relationships.  Therefore, a company should 
consider carefully whether to grant exclusive rights to an unknown 
Japanese company. 
 
B.  Travel Advisory and Visas 
 
      There are no State Department travel advisories for Japan.  
Despite sensational activities of a religious cult in the early months 
of 1995, Japan is noted for its low crime and safe streets.  A valid 
U.S. passport is necessary to enter and travel in Japan, and by Japanese 
law non-residents are required to carry their passports at all times.  A 
visa is not required for short-term business visits (up to 90 days) with 
a round-trip air ticket.  If one plans to work in Japan, a visa is 
required.  A work or investor visa may take up to two months to receive.  
Immunization and health certificates are not required.  Foreign 
residents in Japan longer than 90 days must obtain an Alien Registration 
Card, available free of charge from the municipal office of the city or 
ward of residence in Japan. 
      Upon arrival, going through both immigration and customs checks 
are essentially a formality for U.S. business travelers as long as 
passport and air ticket (if arriving without a visa) are in order.  
Passengers should exchange U.S. dollars for yen before leaving the 
airport, especially if arriving at night, on a holiday, or on a Sunday.   
 
C.  Holidays 
 
      The following lists Japanese annual holidays.  When a national 
holiday falls on a Sunday, the following Monday is a compensatory day 
off.  In addition, many Japanese companies and government offices 
traditionally close during the New Year's holiday season (December 28 - 
January 3), "Golden Week" (April 29 - May 5), and the traditional O-Bon 
Festival (usually August 12 - 15). 
 
      January 1               New Year's Day 
      January 15              Adult's Day 
      February 11             National Foundation Day 
      March 20                Vernal Equinox Day 
      April 29                Greenery Day 
      May 3                   Constitution Memorial Day 
      May 4                   (Declared Official Holiday) 
      May 5                   Children's Day 
      September 15            Respect-for-the-Aged 
      September 23            Autumnal Equinox Day 
      October 10              Health-Sports Day 
      November 3              Culture Day 
      November 23             Labor Thanksgiving Day 
      December 23             Emperor's Birthday 
 
 
D.  Business Infrastructure 
 
      Japan's business infrastructure is on a par with the U.S.  All 
business traveler services are available.  For additional information on 
traveling to Japan, contact the Japan National Tourist Organization 
(JNTO) at (212) 757-5640 and obtain the free brochure "Your Traveling 
Companion: Japan."   
 
 
APPENDICES 
 
 
APPENDIX A  -  COUNTRY DATA 
 
Population:  125,034,000 (estimate as of October 1, 1994) 
                 (Source:  GOJ Statistics Bureau; Management and  
                 Coordination Agency 
 
Religions:  Buddhism and Shinto (Christianity:  1% of population) 
 
Government 
System:     Constitutional Monarchy/Parliamentary Democracy 
 
Languages:  Japanese; English is the primary second language 
 
Work Week:  Monday through Friday 9:00 a.m. to 5:00 p.m.; many 
              companies also work Saturday mornings 9:00 a.m. to  
              12:00 noon; average weekly hours worked as of April  
              1995 is 42.9 hours. 
 
 
APPENDIX B  -  DOMESTIC ECONOMY   
 
                  (millions of U.S. dollars, except as noted) 
 
                                   1994          1995          1996 
                                           (estimated)*   (forecast)* 
 
Gross Domestic Product           4,602,032    4,657,256      4,741,087 
 
GDP growth rate (%)                   0.8          1.2            1.8 
 
GDP per capita (US$ thousands)      36,845       37,213         37,771 
 
Government spending as  
percentage of GNP (%)                15.7         15.4           15.2 
 
Inflation (CPI) (%)                   0.7          0.3            0.2 
 
Unemployment (%)                      2.8          3.3            3.4 
  
Foreign Exchange Reserves          122,845      153,670             ** 
                                              (as of April 1995) 
 
Average Exchange Rate 
(yen per dollar)                     99.39        96.26           ** 
                                        (Jan-Mar 1995) 
 
Foreign Debt                          NONE         NONE 
 
Debt Service Ratio (ratio of 
principal and interest payments 
on foreign debt to foreign income 
exports of goods and services         NONE          NONE 
 
U.S. economic/military***  
assistance                            NONE          NONE 
 
Sources:  GOJ Economic Planning Agency; Management & Coordination 
Agency; Ministry of Finance; Bank of Japan; OECD; Manufactured Imports 
Promotion Organization (MIPRO); International Monetary Fund (IMF); 1995 
estimates and 1996 forecasts (marked*) are mostly from Nomura Research 
Institute. 
 
**As of June 1995, volatility in the foreign exchange markets made for 
too wide a range of projections to allow for a meaningful forecast for 
1996.  The closing yen/dollar rate for June 29, 1995 was 84.34 yen. 
 
***The United States maintains 8 military bases in Japan.  Japan pays 
60% of the cost (excluding U.S. personnel cost) of maintaining the 
bases. 
 
 
APPENDIX C  -  TRADE  (millions of U.S. dollars) 
 
                                   1994          1995          1996 
                                            (estimated)*    (forecast)* 
 
Total country exports            395,600       418,940       408,885 
 
Total country imports            274,742       307,162       321,291 
 
U.S. exports                     117,560       125,789       133,336 
 
U.S. import                       62,659        74,188        90,509 
 
U.S. share of host 
country imports (%)                   22.8          24.2          28.2 
 
Import of manufactured goods 
 
      Total (from world)          151,736       179,352       198,184 
 
      From the U.S.                40,359        50,045        64,058 
 
      U.S. share of manufactured 
      goods (%)                        26.6          27.9          32.3 
 
 
APPENDIX D  -  INVESTMENT STATISTICS 
 
      Please see section VII.G "Investment Climate, investment data" 
above. 
 
 
APPENDIX E  -  U.S. AND JAPANESE CONTACTS 
 
A.  U.S. Embassy Trade Personnel 
 
Commercial Service Tokyo 
George Mu, Minister-Counselor for Commercial Affairs 
U.S. Embassy, Tokyo 
1-10-5 Akasaka, Minato-ku, Tokyo 107 
Phone:  +81/3/3224-5060   Fax:  +81/3/3589-4235 
American Business Information Center (ABIC) 
Phone:  +81/3/3225-5075   Fax:  +81/3/3589-4235 
(U.S. Address:  Unit 45004, Box 204, APO AP 96337-5004) 
 
U.S. Trade Center 
Director 
World Import Mart 7F 
3-1-3 Higashi-Ikebukuro, Toshima-ku, Tokyo 170 
Phone:  +81/3/3987-2441   Fax:  +81/3/3987-2447 
(U.S. Address:  c/o American Embassy Tokyo 
Unit 45004, Box 229, APO AP 96337-5004) 
 
Commercial Service Osaka 
Todd Thurwachter, Principal Commercial Consul 
American Consulate General Osaka-Kobe 
2-11-5 Nishitenma, Kita-ku, Osaka 530 
Phone:  +81/6/315-5957   Fax:  +81/6/361-5978 
(U.S. Address:  Unit 45004, Box 239, APO AP 96337-5004) 
 
Commercial Service Nagoya 
Commercial Consul 
American Consulate Nagoya 
3-10-33 Nishiki, Naka-ku, Nagoya 460 
Phone:  +81/52/203-4277   Fax:  +81/52/201-4612 
(U.S. Address:  Unit 45004, Box 276, APO AP 96337-5004)	 
 
Commercial Sapporo 
Dennis Ortblad, Consul General 
American Consulate General Sapporo 
Nishi 28, Kita 1, Chuo-ku, Sapporo 064 
Phone:  +81/11/641-1115   Fax:  +81/11/643-1283 
(U.S. Address:  Unit 45004, Box 276, APO AP 96337-5004) 
 
Commercial Service Fukuoka 
John Dysen, Consul 
American Consulate Fukuoka 
2-5-26 Ohori, Chuo-ku, Fukuoka 810 
Phone:  +81/92/751-9331   Fax:  +81/92/713-9222 
(U.S. Address:  Unit 45004, Box 242, APO AP 96337-5004) 
 
Naha Consulate 
Thomas Reich, Consul 
American Consulate General Naha 
No.2564 Nishihara, Urasoe City, Okinawa 901-21  
Phone:   +81/98/876-4211   Fax:  +81/98/876-4243 
(U.S. Address:  PSC 556, Box 840, FPO AP 96372-0840) 
 
Foreign Agriculture Service 
James Parker, Minister-Counselor for Agricultural Affairs 
      Emiko Purdy, Attache 
      Mark Dries, Attache 
      David Salmon, Agricultural Trade Officer (Tokyo) 
      Jeff Jones, Assistant Agricultural Trade Officer (Tokyo) 
      Dan Berman, Agricultural Trade Officer (Osaka) 
U.S. Embassy, Tokyo 
1-10-5 Akasaka, Minato-ku, Tokyo 107 
(U.S. Address:  Unit 45004, Box 226, APO AP 96337-5004) 
Phone:  +81/3/3224-5105    Fax:  +81/3/3589-0793 
ATO Tokyo Phone:  +81/3/3505-6050   Fax:  +81/3/3582-6429 
ATO Osaka Phone:  +81/6/208-0303   Fax:  +81/6/208-0306 
 
State Department Economic Section  
John H. Penfold, Minister-Counselor for Economic Affairs 
U.S. Embassy, Tokyo 
1-10-5 Akasaka, Minato-ku, Tokyo 107 
(U.S. Address:  Unit 45004, Box 203, APO AP 96337-5004) 
Phone:  +81/3/3224-5022   Fax:  +81/3/3224-5010 
 
Energy Department 
Milton A. Eaton, Representative 
U.S. Embassy, Tokyo 
1-10-5 Akasaka, Minato-ku, Tokyo 107 
(U.S. Address:  Unit 45004, Box 219, APO AP 96337-5004) 
Phone:  +81/3/3224-5444   Fax:  +81/3/3224-5769 
 
Washington-based U.S. Government Japan Contacts 
 
U.S. Department of Commerce 
Marjory E. Searing, Deputy Assistant Secretary for Japan  
Office of Japan Trade Policy (OJTP) 
Japan Export Information Center (JEIC) 
International Trade Administration 
Room 2320, Washington DC 20230 
OJTP Phone:  (202) 482-1820   Fax:  (202) 482-0469   
JEIC Phone:  (202) 482-2425   Fax:  (202) 482-0469 
 
For further contact information on the U.S. Department of Commerce and 
U.S. based multipliers relevant for Japan, please contact the JEIC. 
 
B.  Japanese Trade Associations/Chambers of Commerce 
 
      1.  Industry Associations and Chambers of Commerce 
 
KEIDANREN 
Hiroya Ichikawa, Director 
International Economic Affairs Dept. 
1-9-4 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3279-1441   Fax:  +81/3/5255-6231 
 
KEIZAI DOYUKAI 
Tadashi Shishido, Managing Director 
Nihon Kogyo Club Bldg., 1-4-6 Marunouchi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3284-0248   Fax:  +81/3/3212-3774 
 
Japan Foreign Trade Council, Inc. 
Masaru Kawai, Director, International Division 
World Trade Center Bldg. 
2-4-1 Hamamatsu-cho, Minato-ku, Tokyo 100 
Phone:  +81/3/3435-5950   Fax:  +81/3/3435-5979 
 
Japan-U.S. Business Council 
Yasuo Tsuchiya, Executive Director 
Otemachi Bldg., 1-6-1 Otemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3216-5823   Fax:  +81/3/3284-1576 
 
Japan Chamber of Commerce and Industry 
Matsuo Shimojima, General Manager 
International Div. 
Tosho Bldg., 3-2-2 Marunouchi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3283-7608   Fax:  +81/3/3216-6491 
 
Tokyo Chamber of Commerce & Industry 
Shigeo Hashimoto, Associate Advisor 
3-2-2  Marunouchi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3283-7540   Fax:  +81/3/3284-1208 
 
Osaka Chamber of Commerce and Industry 
International Division 
Seiji Inoue, Director 
2-8 Honmachi-bashi, Chuo-ku, Osaka 540 
Phone:  +81/6/944-6400   Fax:  +81/6/944-6409 
 
Kansai Economic Federation (Kankeiren) 
Takeo Onishi, General Manager 
International Affairs Department 
Nakanoshima Center Bldg. 30F  
6-2-27, Nakanoshima, Kita-ku, Osaka 530 
Phone:  +81/6/441-0104   Fax:  +81/6/443-5347 
 
The Kansai Committee for Economic Development  
(KANSAI KEIZAI DOYUKAI) 
Makiko Inukai 
Nakanoshima Center Bldg. 28F  
6-2-27, Nakanoshima, Kita-ku, Osaka 530 
Phone:  +81/6/441-1031   Fax:  +81/6/441-1030 
 
Nagoya Chamber of Commerce and Industry 
Takanori Kitamura, General Manager, International Division 
2-10-19 Sakae, Naka-ku, Nagoya 460 
Phone:  +81/52/221-7211   Fax:  +81/52/231-5213  
 
The American Chamber of Commerce in Japan (ACCJ) 
5F, Bridgestone Toranomon Bldg. 
3-25-2 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3433-5381   Fax:  +81/3/3436-1446 
 
The American Chamber of Commerce in Japan (ACCJ) Kansai Chapter 
Business Center 301, East Court Two 
1-14 Koyocho Naka, Higashi Nada-ku, Kobe 658 
Phone:  +81/6/857-9745   Fax:  +81/6/857-6714 
 
      2.  Agricultural Trade Associations 
 
Japan Food Service Chain Association 
8-9-13 Ginza, Chuo-ku, Tokyo 104 
Phone:  +81/3/3573-3231  Fax:  +81/3/3572-5099 
 
Japan Dairy Products Association 
1-14-19 Kita-Kudan, Chiyoda-ku, Tokyo 102 
Phone:  +81/3/3264-4131  Fax:  +81/3/3264-4139 
 
Japan Confectionery Association 
6-9-5 Shimbashi, Minato-ku, Tokyo 105 
Phone:  +81/3/3431-3115  Fax:  +81/3/3432-1660 
 
Japan Restaurant Association 
8-10-8 Ginza, Chuo-ku, Tokyo 104 
Phone:  +81/3/3571-2438  Fax:  +81/3/3571-7090 
 
Japan Wines & Spirit Importers Association 
1-13-5 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3503-6505  Fax:  +81/3/3503-6504 
 
Japan Chain Stores Association 
5-13-1 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3433-1290  Fax:  +81/3/3433-1297 
 
Japan Convenience Food Association 
Kimura Building. 3F. 
5-5-5 Asakusabashi, Taito-ku, Tokyo 111 
Phone:  +81/3/3865-0811  Fax:  +81/3/3865-0815 
 
Japan Dried Vegetable Association 
Suzuki Building 
3-5-3 Nihonbashi Kayaba-cho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3669-0286  Fax:  +81/3/3639-2555 
 
Japan Frozen Food Association 
No.2 Katsuraya Bldg. 
10-6 Nihonbashi Kobuna-cho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3667-6671  Fax:  +81/3/3669-2117 
 
Japan Fruit Juice Association 
Nihonbashi Fuji Bldg. 
2-5-13 Nihonbashi, Chuo-ku, Tokyo 103 
Phone:  +81/3/3275-1031  Fax:  +81/3/3275-1067 
 
Japan Health Foods Association 
Shokuhin Eisei Center 
2-6-1 Jingumae, Shibuya-ku, Tokyo 150 
Phone:  +81/3/5410-8231  Fax:  +81/3/5410-8235 
 
3.  Japanese Government Agencies 
 
JETRO 
Shintaro Ohishi, Director 
Import Promotion Dept. 
2-2-5 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3582-5562  Fax:  +81/3/3582-5027 
 
JETRO Business Support Center 
Hitoshi Takano, Chief Director 
ATT Bldg., 2-17-22 Akasaka, Minato-ku, Tokyo 107 
Phone:  +81/3/5562-3131  Fax:  +81/3/5562-3100 
 
Foreign Investment Promotion Development Corporation (FIND) 
Kenji Natori, President 
ATT Bldg., 2-17-22 Akasaka, Minato-ku, Tokyo 107 
Phone:  +81/3/3224-1203  Fax:  +81/3/3224-9871 
 
Manufactured Imports Promotion Organization  (MIPRO) 
Kunio Yagi, President 
World Import Mart Bldg. 6F 
3-1-3 Higashi Ikebukuro, Toshima-ku, Tokyo 170 
Phone:  +81/3/3988-2791   Fax:  +81/3/3988-1629 
 
Ministry of International Trade and Industry (MITI) 
Hiroshi Ueno, Director, Import Division 
1-3-3 Kasumigaseki, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3501-1664   Fax:  +81/3/3501-5912 
 
Further contact information of Japanese Government Agencies and quasi-
governmental organizations, please contact US&FCS Japan offices. 
 
      3. Sector-specific Contacts in Japan 
 
For the contact information on the Japanese Government agencies, please 
contact JEIC or US&FCS Japan offices.  
 
       (1)  Contacts for Aircraft and Parts 
 
The Society of Japanese Aerospace Companies, Inc. (S.J.A.C.) 
Miki Sugiura, General Manager, International Affairs 
Hibiya Park Bldg., 518 
1-8-1 Yurakucho, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3211-5678  Fax:  +81/3/3211-5018 
 
       (2)  Contacts for Apparel 
 
Japan Textile Importers Association 
Jun-ichi Ichikawa, Assistant Chief 
1-6 Nihonbashi Honcho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3270-0791   Fax:  +81/3/3243-1088 
 
JECMA (Japan Export Clothing Manufacturers Association) 
Itsuzo Kitano, Managing Director 
Osaka YM Bldg., 7-15-26 Fukushima, Fukushima-ku, Osaka 553 
Phone:  +81/6/453-9221   Fax:  +81/6/453-9220 
 
       (3)  Contacts for Automobiles 
 
Japan Automobile Manufacturers Association 
Kuniyoshi Sawada, General Manager, International Department 
Ohtemachi Bldg., 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3216-5778   Fax:  +81/3/3287-2073 
 
Japan Automobile Importers Association 
K. Ono, Manager, International Department 
No. 7 Akiyama Bldg., 5-3 Kojimachi, Chiyoda-ku, Tokyo 102 
Phone:  +81/3/3222-5421   Fax:  +81/3/3222-1730 
 
       (4)  Contacts for Auto Parts 
 
Japan Auto Parts Industries Association 
International Department 
Takuji Yukawa, General Manager 
1-16-15, Takanawa, Minato-ku, Tokyo 108 
Phone:  +81/3/3445-4211    Fax:  +81/3/3447-5372 
 
U.S. Automotive Parts Industry, Japan Office 
C.E. Pete Pederson, Director 
Towa Horidomecho Bldg., 3F 
2-1-1 Nihonbashi-horidomecho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3663-8484   Fax:  +81/3/3663-8483 
 
       (5)  Contacts for Biotechnology  
 
Japan Bioindustry Association 
Ichiro Shimizu, Managing Director 
5-1-5 Shimbashi, Minato-ku, Tokyo 113 
Phone:  +81/3/3433-3545   Fax:  +81/3/3459-1440 
 
       (6)  Contacts for Building Products 
 
Imported Housing Industry Council  
Matsumoto 
c/o Manufactured Imports Promotion Organization  (MIPRO) 
World Import Mart Bldg. 6F 
3-1-3 Higashi-Ikebukuro, Toshima-ku, Tokyo 170 
Phone:  +81/3/3988-2791  Fax:  +81/3/3988-1629 
 
Japan 2x4 Home Builders Association 
Takashi Naito 
Dai-29 Mori Bldg., 4-2-1, Shinbashi, Minato-ku, Tokyo 105 
Phone:  +81/3/3432-4581  Fax:  +81/3/3434-3918 
 
Japan Building Materials Association 
Yasuji Tamura, Executive Director 
1-8-3, Kyomachibori, Nishi-ku, Osaka 550 
Phone:  +81/6/443-0345   Fax:  +81/6/443-0348 
 
U.S.-Japan Housing Industry Roundtable Secretariat 
Kinji Iwahashi, Chief Secretary 
c/o Advanced Social Planning Institute 
Hillside Terrace, 29-18 Sarugaku-cho, Shibuya-ku, Tokyo 150 
Phone:  +81/3/3496-1616   Fax:  +81/3/3496-1604 
 
American Plywood Association 
Charles C. Barnes, Japan Representative 
7F, Tameike Tokyu Bldg. 
1-1-14, Akasaka, Minato-ku, Tokyo 107 
Phone:  +81/3/3589-0127   Fax:  +81/3/3589-1560 
 
Western Wood Products Association 
Ikuo Yamaguchi, Representative in Japan 
7F, Tameike Tokyu Bldg. 
1-1-14, Akasaka, Minato-ku, Tokyo 107 
Phone:  +81/3/3589-1320   Fax:  +81/3/3505-6710 
 
       (7)  Contacts for Computers 
 
Japan Institute of Office Automation 
Katsuhiro Utada, President 
Nippon Noritsu Kyokai Bldg. 7F 
3-1-22 Shibakoen, Minato-ku, Tokyo 105 
Phone:  +81/3/3434-6677  Fax:  +81/3/3459-1704 
 
Japan Information Processing Development Association 
Masao Teruyama, President 
3-5-8 Shibakoen, Minato-ku, Tokyo 105 
Phone:  +81/3/3432-9384  Fax:  +81/3/3432-9389  
 
American Electronics Association 
John Stern, Executive Director  
4-11 Yonbancho, Chiyoda-ku, Tokyo 102 
Phone:  +81/3/3237-7195  Fax:  +81/3/3237-7195 
 
       (8)  Contacts for Computer Software 
 
Japan Information Service Industry Association 
Kazuhiko Yamada, Executive Director 
Yusei Gojokai Kotohira Bldg. 4F 
1-14-1 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3595-4051   Fax:  +81/3/3595-4055 
 
Software Information Center 
Gaishi Hiraiwa, Chairman 
Toto Bldg. 4F, 5-1-4 Toranomon,  Minato-ku, Tokyo 105 
Phone:  +81/3/3437-3071   Fax:  +81/3/3398  
 
       (9)  Contacts for Japan's Construction Market  
 
Japan Federation of Construction Contractors 
Toneri Inoue, Manager, International Affairs Office 
2-5-1 Hatchobori, Chuo-ku, Tokyo 104 
Phone:  +81/3/3553-0701    Fax:  +81/3/3552-2360 
 
The Building Center of Japan 
International Section 
3-2-2 Toranomon, Minato-ku, Tokyo 105  
Phone:  +81/3/3434-7155  Fax:  +81/3/3431-3301 
 
       (10)  Contacts for Consumer Goods 
 
Japan Chain Stores Association 
Masae Kasahara, General Manager 
Toranomon 40-Mori-Bldg. 
5-13-1 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3433-1290   Fax:  +81/3/3433-1297 
 
Japan Department Store Association 
Yukiteru Azukizawa, General Manager 
7F Yanagiya Bldg., 2-1-10 Nihonbashi, Chuo-ku, Tokyo 103 
Phone:  +81/3/3272-1666   Fax:  +81/3/3281-0381 
 
Japan Home Healthcare Association 
Junichi Hoshi, President 
3F, Yamamoto Bldg., 3-39-9 Hongo, Bunkyo-ku, Tokyo 113   
Phone:  +81/3/3818-6047   Fax:  +81/3/3818-2728  
 
Japan DIY Industry Association 
Toshiaki Tanzawa, President 
5F, Daini-Okano Bldg. 
2-16-7 Higashi-Nihonbashi, Chuo-ku, Tokyo 103 
Phone:  +81/3/5687-4475   Fax:  +81/3/5687-4487 
 
Japan Boating Industry Association 
Yukinobu Hamada, Managing Director 
Asano Daiichi Bldg., 2-5-1 Ginza, Chuo-ku, Tokyo 104 
Phone:  +81/3/3567-6707   Fax:  +81/3/3567-0635 
 
The Japan Health Food & Nutrition Food Association 
Masakazu Nozawa, Managing Director 
6F, Food Sanitation Center 
2-6-1 Jingumae, Shibuya-ku, Tokyo 150  
Phone:  +81/3/5410-8231   Fax:  +81/3/5410-8235 
 
       (11)  Contacts for Cosmetics/Toiletries 
 
Japan Cosmetics Industry Association 
Toru Arimoto, Senior Managing Director 
2-9-14, Toranomon, Minato-ku, Tokyo 105 
Phone: +81/3/3502-0576   Fax:  +81/3/3502-0829 
 
       (12)  Contacts for Dental Equipment  
 
The Japan Federation of Medial Devices Associations (JFMDA) 
H. Tsukamoto, Vice President, International 
3-38-1 Hongo, Bunkyo-ku,Tokyo 113 
Phone:  +81/3/3838-2310   Fax:  +81/3/3838-2448 
 
Japan Dental Trade Association (JDTA) 
Masaru Matsuoka, Executive Director 
3-7-5 Ueno, Taito-ku, Tokyo 110 
Phone:  +81/3/3836-5286   Fax:  +81/3/3836-5550 
 
       (13)  Contacts for Drugs and Pharmaceuticals 
 
Japan Pharmaceutical Manufacturers Association 
Dr. K. Shirota, Executive Managing Director 
3-3 Nihonbashi Honcho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3241-0326   Fax:  +81/3/3242-1767 
 
Japan Association of Clinical Reagents Industries 
T. Koizumi, President 
1-1 Nihonbashi-Nakasu, Chuo-ku, Tokyo 103 
Phone:  +81/3/3669-9101   Fax:  +81/3/3669-6560 
 
Pharmaceutical Manufacturers Association 
Brian O. Wright, Japan Representative 
c/o Smith-Kline Beecham Japan Ltd. 
6 Sanbancho, Chiyoda-ku, Tokyo 102 
Phone:  +81/3/3221-7072   Fax:  +81/3/3221-7884 
 
       (14)  Contacts for Electronic Components 
 
U.S. Semiconductor Industry Association Japan Office 
Roger Mathus, Executive Director 
11-4 Yonbancho, Chiyoda-ku, Tokyo 102 
Phone:  +81/3/3237-7683  Fax:  +81/3/3237-1237 
 
Electronic Industries Association of Japan 
Tohri Sato, Chairman 
UCOM Office, #7 Toyo Kaiji Bldg. 10F 
2-8-11 Nishi-Shinbashi, Minato-ku, Tokyo 105 
Phone:  +81/3/3593-8321   Fax:  +81/3/3593-8324 
 
International Semiconductor Cooperation Center (INSEC) 
Kazuo Fujimoto  
Toranomon #34 Mori Bldg. 
1-25-5 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3597-8273  Fax:  +81/3/3597-8276 
 
Distributors Association of Foreign Semiconductors 
Tsumoru Kitahara, President 
NNK Bldg. 7F, 1-1-10 Shinjuku, Shinjuku-ku, Tokyo 160 
Phone:  +81/3/3354-5921  Fax:  +81/3/3354-5090 
 
       (15)  Contacts for Electric Power 
 
The Japan Electrical Manufacturers' Association 
Afuri Momo, General Manager, General Coordination Dept. 
2-4-15 Nagata-cho, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3581-4841   Fax:  +81/3/3593-3198 
 
       (16)  Contacts for Furniture 
 
International Development Association 
of the Furniture Industry of Japan 
Toshio Kobayashi, Senior Managing Director 
Karukozaka-Tanaka Bldg., 3F, 2-16-1 Kagurazaka, Shinjuku-ku, Tokyo 162 
Phone:  +81/3/5261-9401   Fax: +81/3/5261-9404 
 
Japan Office and Institutional Furniture Association 
Koichi Sakamaki, Executive Director 
Seed-Nihonbashi Bldg., 2-34-11, Ningyo-cho, Nihonbashi 
Chuo-ku, Tokyo 103 
Phone:  +81/3/3663-6938   Fax: +81/3/3663-7598 
 
       (17)  Contacts for Industrial Chemicals 
 
Japan Chemical Industry Association 
Muneto Itoda, Head of International Affairs Office 
Tokyo Club Bldg., 3-2-6 Kasumigaseki, Chiyoda-ku Tokyo 100 
Phone:  +81/3/3580-0751   Fax: +81/3/3580-0764 
 
Japan Chemical Importers' Association 
Katsuhiro Kitayama, Manager, Business Coordination Department  
Nippon Shuzou Kaikan Bldg., 5 Fl. 
1-1-21 Nishi-Nihonbashi Minato-ku Tokyo 105 
Phone:  +81/3/3504-1803   Fax: +81/3/3595-3344 
 
       (18)  Contacts for Jewelry 
 
Jewelry Trade Center 
Toshiyuki Momozawa, President 
506 World Trade Center Bldg. 
2-41 Hamamatsucho, Minato-ku, Tokyo 105 
Phone:  +81/3/3435-6061   Fax:  +81/3/3434-6079 
 
Japan Jewelry Association 
Masami Sakaguchi, Secretary General 
1-26-2 Higashi-Ueno, Taito-ku, Tokyo 110 
Phone:  +81/3/3835-8567   Fax:  +81/3/3839-6599 
 
       (19)  Contacts for Laboratory Instruments 
 
Japan Scientific Instruments Association 
Masaomi Ohashi, Secretary General 
#2 Tomihisa Bldg., 3-9-7 Nihonbashi-Honcho, Chuo-ku, Tokyo 105 
Phone:  +81/3/3661-5131   Fax:  +81/3/3668-0324 
 
The Chemical Society of Japan 
Atsuo Nakanishi, Secretary General  
1-5 Kanda Surugadai, Chiyoda-ku, Tokyo 101 
Phone:  +81/3/3292-6161   Fax:  +81/3/3292-6318 
 
The Japan Society for Analytical Chemistry 
Takashi Shimanuki, Secretary General  
Room 304 - Gotanda Sun Heights 
1-26-2 Nishi-Gotanda, Shinagawa-ku, Tokyo 141 
Phone:  +81/3/3490-3351   Fax:  +81/3/3490-3572 
 
       (20)  Contacts for Machinery 
 
Japan Machinery Importers' Association 
Masashi Uno, General Manager 
Koyo Bldg., 1-2-11 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3503/9736   Fax:  (3) +81/3/3503-9779 
 
Japan Machine Tool Importers Association 
Yukishige Izu, Executive Director 
Toranomon Kogyo Bldg., 1-3-18 Toranomon 
Minato-ku, Tokyo 105 
Phone:  +81/3/3401-5030   Fax:  +81/3/3501-5040 
 
       (21)  Contacts for Marine Fisheries Products 
 
Japan Marine Products Importers Association 
Ryuichi Tanabe, Managing Director 
1F, Kamakurabashi Bldg. 
1-7-1 Uchikanda, Chiyoda-ku, Tokyo 101 
Phone:  +81/3/5280-2891   Fax:  +81/3/5280-2892 
 
Hokkaido Marine Products Export Import Association 
Ken Ishii, Managing Director 
c/o Marutoo Co., Ltd. 
2F, Kakumanhayashi Bldg. 
Kita 8-jo, Nishi 19-chome, Chuo-ku, Sapporo 060 
Phone:  +81/11/644-9201   Fax:  +81/11/644-9202 
 
       (22)  Contacts for Medical Equipment  
 
The Japan Federation of Medical Devices Associations 
H. Tsukamoto, Vice President, International 
3-38-1 Hongo, Bunkyo-ku, Tokyo 113 
Phone:  +81/3/3838-2310   Fax:  +81/3/3838-2448 
 
Japan Federation of Medical Trading & Manufacturing Associations 
K. Matsumoto, Chairman 
3-39-15 Hongo, Bunkyo-ku, Tokyo 113 
Phone:  +81/3/3811-6761   Fax:  +81/3/3818-4144 
 
Japan Industries Association of Radiation Apparatus 
Dr. H. Kimura, Chairman 
1-6-2 Yushima, Bunkyo-ku, Tokyo 102 
Phone:  +81/3/3816-3450   Fax:  +81/3/3818-8920 
 
Japan Association of Medical Equipment Industries 
Yoshio Aoki, Chairman 
3-39-15 Hongo, Bunkyo-ku, Tokyo 113 
Phone:  +81/3/3816-5575   Fax:  +81/3/3816-5576 
 
       (23)  Contacts for Nonwoven Textiles 
 
All Nippon Nonwovens Association 
Kinshiro Araki, Secretary General 
Soto-Kanda 6-Chome Bldg., 3F 
6-9-2 Sotokanda, Chiyoda-ku, Tokyo 101 
Phone:  +81/3/5688-4041   Fax:  +81/3/5688-4042 
 
       (24)  Contacts for Japan's ODA Market 
 
Japan International Cooperation Agency (JICA) 
Hikoyuki Ukai, Planning Division, Planning Dept. 
P.O. Box 216, 2-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 163-04 
Phone:  +81/3/3346-5435   Fax:  +81/3/3346-5171 
 
Overseas Economic Cooperation Fund (OECF) 
Ikuro Sato, Director, Co-financing & Overseas 
Administration Division, Coordination Dept. 
1-4-1 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3215-1318   Fax:  +81/3/3215-1599 
 
Export-Import Bank of Japan 
Seiichiro Shimamoto, Director, International 
Affairs Division, Policy Planning and Coordination Dept. 
1-4-1, Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3287-9108   Fax:  +81/3/3287-9539 
 
       (25)  Contacts for Paper and Paperboard 
 
Japan Paper Association 
Tadao Wakano, General Manager, International Division 
Paper & Pulp Kaikan Bldg., 
5-6 Nihonbashi Hisamatsu, Chuo-ku, Tokyo 103  
Phone: +81/3/3249-4803  Fax: +81/3/3249-4827 
 
       (26)  Contacts for Pet Foods and Supplies 
 
Pet Food Fair Trade Commission  
Tamiya Kobayashi, Chairman 
3-6-11 Kitashinagawa, Shinagawa-ku Tokyo 140 
Phone:  +81/3/5479/4454   Fax:  +81/3/3474-0155 
 
Japan Pet Food Industry Association 
Tamiya Kobayashi, President 
3-6-11 Kitashinagawa, Shinagawa-ku Tokyo 140 
Phone: +81/3/3474/0151   Fax: +81/3/3474-0155 
 
National Pet Food Wholesalers' Association 
Ryoji Ueda, Chairman 
1-31-9 Haramachi, Meguro-ku, Tokyo 152  
Phone:  +81/3/3710/1055   Fax:  +81/3/3710-3777 
 
       (27)  Contacts for Pollution Control Equipment 
 
Clean Japan Center 
Masao Fujimoto, Advisor   
3-6-2 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3432-6301    Fax:  +81/3/3432-6319 
 
Japan Association of Environmental Assessment 
Sadao Shimizu, Secretary General 
4F Arche Kojimachi Bldg., 1-10-13 Kojimachi, Chiyoda-ku, Tokyo 102   
Phone:  +81/3/3230-3583   Fax:  +81/3/3230-3876 
 
National Federation of Industrial Waste Management 
Sakichi Sano, Secretary General 
Sogo Nagatacho Bldg., 1-11-28 Nagatacho, Chiyoda-ku, Tokyo 101 
Phone:  +81/3/3593-0011   Fax:  +81/3/3580-5666 
 
       (28)  Contacts for Service Industries 
 
Japan Direct Marketing Association 
Kaoru Nomiyama, Executive Director 
Mori Bldg. #32, 3-40-30 Shiba-Koen, Minato-ku, Tokyo 
Phone:  +81/3/3434-4700   Fax:  +81/3/3434-4518 
 
Japan Franchise Association 
Shigeyuki Ochiai, Executive Managing Director 
Elsa Bldg., 3-13-1 Roppongi, Minato-ku, Tokyo 106 
Phone:  +81/3/3401-0421   Fax:  +81/3/3423-2019 
 
Nippon Amusement Parks Association (NAPA) 
Toshio Suzuki, Jimu Kyokucho 
1-6-7 Yakumo, Meguro-ku, Tokyo 152 
Phone:  +81/3/3724-5745  Fax:  +81/3/3725-2420 
 
Publishers Association For Cultural Exchange 
Yasuko Korenaga (Ms.), Managing Director 
1-2-1 Sarugaku-cho, Chiyoda-ku, Tokyo 101 
Phone:  +81/3/3291-5685    Fax:  +81/3/3233-3645 
 
Japan Book Importers Association 
Shinji Kanda, Secretary 
Chiyoda Kaikan, 1-21-4 Nihonbashi, Chuo-ku, Tokyo 103 
Phone:  +81/3/3271-6901   Fax:  +81/3/3271-6920  
 
Foreign Film Importer-Distributors Association of Japan 
Mori Bldg. 5F, 7-5-4 Ginza, Chuo-ku, Tokyo 104 
Phone:  +81/3/3572-0574  Fax:  +81/3/3572-0575 
 
Japan and International Motion Picture Copyright Association, Inc. 
(representing Motion Picture Export Association of America, Inc.) 
Y. Iiyama 
Nihon Seimei Bldg. 6F, 23-3 Ichiban-cho, Chiyoda-ku, Tokyo 102 
Phone:  +81/3/3265-1401   Fax:  +81/3/3265-1419 
      
       (29)  Contacts for Sporting Goods and Recreational Equipment 
 
Japan Sports Industries Federation 
Yoshiaki Unno, Managing Director 
3F, Nogakushorin Bldg. 
3-6, Kanda Jinbo-cho, Chiyoda-ku, Tokyo 101 
Phone:  +81/3/5276-0141   Fax:  +81/3/5276-0288 
 
Association of Japan Sporting Goods Industries (JASPO) 
Terunaga Kawamata, Director General 
New Kuramae Bldg. 
3-20-12, Asakusabashi, Taito-ku, Tokyo 111 
Phone:  +81/3/3863-2473   Fax:  +81/3/3863-2474 
 
Tokyo Wholesale Trade Union of Sporting Goods 
Toshiyuki Gotoh, Manager 
5-8-6, Asakusabashi, Taito-ku, Tokyo 111 
Phone:  +81/3/3851-5949   Fax:  +81/3/3863-7139 
 
Osaka Wholesale Trade Union of Sporting Goods 
Sozaburo Kimura, Director General 
Amano Bldg. 3-5-25, Minamisemba, Chuo-ku, Osaka 542 
Phone:  +81/6/251-1267   Fax:  +81/6/251-3125 
 
National Federation of All-Japan Sporting Goods Retailers Association 
Takeo Sasaki, Manager 
310 Ohno Bldg., 2-11-14, Ueno, Taito-ku, Tokyo 110 
Phone:  +81/3/3832-1267   Fax:  +81/3/3837-0264 
 
      (30)  Contacts for Telecommunications 
 
Communications Industry Association of Japan (CIAJ) 
Toshikazu Tanida, Deputy Director 
International Affairs Department 
Sankei Bldg. Annex, 1-7-2 Ohte-machi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3231-3005   Fax:  +81/3/3246-0495 
 
MKK (Musen Kensa Kentei-Kyokai) 
Kazuo Yamaguchi, Managing Director 
5-7-2 Yashio, Shinagawa-ku, TOKYO 140 
Phone:  +81/3/3799-9034   Fax:  +81/3/3799-9054 
 
JATE (Japan Approvals Institute for Telecommunications Equipment) 
Mitsuo Niihara, General Manager, Equipment Approvals Department 
1-1-3 Toranomon, Minato-ku, TOKYO 105 
Phone:  +81/3/3591-4300   FAX: +81/3/3591-4355 
 
       (31)  Contacts for Textile Products 
 
Nippon Interior Fabrics Association (NIF) 
Kazuo Hosoi, Managing Director 
6F, Fukuda Bldg., 2-3-23, Hamamatsu-cho, Minato-ku, Tokyo 105 
Phone:  +81/3/3433-4521   Fax:  +81/3/3433-7860 
 
Japan Carpet Association 
Hiroshi Tabuchi, Secretary General 
7F, Daikei Bldg., 1-9-16, Nishihonmachi, Nishi-ku, Osaka 550 
Phone:   +81/6/543-3334   Fax: +81/6/543-3336 
 
Japan Textiles Importers Association 
Kazuo Arai, Deputy Manager 
9F, Nihonbashi Daiwa Bldg. 
1-9-4 Nihombashi Honcho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3270-0791   Fax:  +81/3/3243-1088 
 
Japan Fire Retardant Association 
Hideo Terasaki, Director Technical Div. 
7F, Kyodo Bldg., 4-6-7 Nihonbashi-Honcho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3246-1661   Fax:  +81/3/3271-1692 
 
       (32)  Contacts for Food and Agricultural Products 
 
Ministry of Agriculture Forestry and Fisheries 
1-2-1 Kasumigaseki, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3502-8111 
 
      Food Agency (Rice Wheat Barley) 
 
      Naoshi Sato, Director, Rice & Grains Planning Div. 
      Toshihiko Takemoto, Research Officer 
      Akihiko Yasuda, International Economy #1 Div. 
      Kazuo Hirashima, Deputy Director, Planning Div. 
 
      Grains (Feed Grains) 
 
      Etsuo Kitahara, Director, Commercial Feed Div. 
      Akinori Gozawa, Director, Upland Crop Div. 
      Kazuhisa Goto, Director, Grocery, Oils & Fats Div. 
 
      Livestock 
 
      Shunichi Ijichi, Deputy Director, Meat & Egg Div. 
      Shiro Yoshimura, Deputy Director, Animal Health Div. 
      Hiroyuki Oki, Milk & Milk Products Div. 
 
      Animal & Plant Health Inspection 
 
      Masaki Yoshimura, Director, Plant Protection Div. 
      Teruhide Fujita, Director, Animal Health Div. 
 
Ministry of Health and Welfare 
1-2-2 Kasumigaseki, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3503-1711 
 
      Ryoji Takahara, Director, Food Sanitation Div. 
      Satoshi Takaya, Senior Officer for Imported Food Inspection 
      Akira Yamamoto, Director, Food Chemistry Div. 
      Takahisa Murakami, Deputy Director, Food Chemistry Div. 
 
Ministry of Health and Welfare 
Akira Yamamoto, Director 
Food Chemistry Division, Environmental Health Bureau 
1-2-2 Kasumigaseki, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3501-4868   Fax:  +81/3/35+81/3/7964 
 
Ministry of Health and Welfare 
Atsuo Makihara, Director 
Office of Health Policy on Newly Developed Foods, Food Sanitation 
Division, Environmental Health Bureau 
1-2-2 Kasumigaseki, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3501-1711  ext. 2594   Fax:  +81/3/35+81/3/7965 
 
E.  Market Research Firms in Japan 
 
A.T. Kearney International, Inc. 
Akasaka Twin Tower, 2-17-22 Akasaka, Minato-ku, Tokyo 107 
Phone:  +81/3/5561-9155   Fax:  +81/3/5561-9190 
 
ASI Market Research (Japan), Inc. 
Yoneda Bldg., 6-17-20 Shimbashi, Minato-ku, Tokyo 105 
Phone:  +81/3/3432-1701   Fax:  +81/3/3433-3394 
 
Access Japan Inc. 
John Rossman, President 
8F, Tokyo Tatemono Shibuya Bldg., 3-9-9 Shibuya 
Shibuya-ku, Tokyo 150 
Phone:  +81/3/5467-4723   Fax:  +81/3/5467-4722 
 
Boston Consulting Group K.K. 
Time & Life Bldg., 2-3-6 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3279-0761   Fax:  +81/3/3245-1744 
 
Fuji Chimera Research Institute, Inc. 
F.K Bldg., 2-5 Nihonbashi Kodenma-cho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3664-5815   Fax:  +81/3/3661-5134 
 
ODS Corporation 
Industrial Marketing Section 
Kuyo Bldg., 5-10-5 Minami-Aoyama, Minato-ku, Tokyo 107 
Phone:  +81/3/3400-7090   Fax:  +81/3/3486-4810 
 
Sanwa Research Institute Corp. 
Shinbashi Toyo Bldg., 1-11-7 Shinbashi, Minato-ku, Tokyo 105 
Phone:  +81/3/3820-8893   Fax:  +81/3/3820-8894 
 
Sumitomo Business Consulting Co., Ltd. 
Shionogi Honcho Kyodo Bldg. 
3-7-2 Nihonbashi Honcho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3662-7451   Fax:  +81/3/3662-7450 
 
Tohmatsu Touch Ross Consulting Co., Ltd. 
Toranomon Kotohira Kaikan 
1-2-8 Toranomon, Minato-ku, Tokyo 105 
Phone:  +81/3/3501-8094   Fax:  +81/3/3580-7675 
 
Yano Research Institute Ltd. 
H. Watanabe, Senior Researcher 
3-9-19 Higashi, Shibuya-ku, Tokyo 150 
Phone:  +81/3/5485-4644;   Fax:  +81/3/5485-4688 
 
F.  Commercial Banks in Japan 
 
Asahi Bank 
1-1-2 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3287-2111   Fax:  +81/3/3212-3663 
 
Bank of Tokyo  (Rename Bank of Tokyo-Mitsubishi on April 1, 1996) 
1-3-2 Nihonbashi Hongoku-cho, Chuo-ku, Tokyo 103 
Phone:  +81/3/3245-1111   Fax:  +81/3/3270-7761 
 
Daiichi Kangyo Bank 
1-1-5 Uchisaiwai-cho, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3596-1111   Fax:  +81/3/3596-2179 
 
Daiwa Bank 
2-2-1 Bingo-machi, Chuo-ku, Osaka 541 
Phone:  +81/6/271-1221   Fax:  +81/6/268-1337 
 
The Export-Import Bank of Japan 
1-4-1 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3287-9500  Fax:  +81/3/3287-9579  
 
Fuji Bank 
1-5-5 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3216-2211   Fax:  +81/3/3201-0527 
 
Industrial Bank of Japan 
1-3-3 Marunouchi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3214-1111   Fax:  +81/3/3213-6066 
 
Japan Development Bank 
1-9-1 Ohtemachi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3270-3211  Fax:  +81/3/3234-1938 
 
Mitsubishi Bank (Rename Bank of Tokyo-Mitsubishi on April 1, 1996) 
2-7-1 Marunouchi, Chiyoda-ku, Tokyo 100 
Phone:  +81/3/3240-1111   Fax:  +81/3/3240-2820 
 
Sakura Bank 
1-3-1 Kudan-Minami, Chiyoda-ku, Tokyo 100-91 
Phone:  +81/3/3230-3111   Fax:  +81/3/3239-1022 
 
Sanwa Bank 
3-5-6 Fushimi-machi, Chuo-ku, Osaka 541 
Phone:  +81/6/206-8111   Fax:  +81/3/3215-1776 
 
Sumitomo Bank 
4-6-5 Kitahama, Chuo-ku, Osaka 541 
Phone:  +81/6/227-2111   Fax:  +81/3/3282-8480 
 
 
APPENDIX F  -  MARKET RESEARCH 
 
A.  Market Research Distributed by the U.S. Department of Commerce 
    Economic Bulletin Board and National Trade Data Bank 
 
      1.  Upcoming FY 96 Industry Sector Analyses (ISAs)  
 
SECTOR           TITLE                      SPECIALIST     DUE (MM/YY) 
 
ACE   Action Plan/Major Public            T. Ohmura       07/96 
      Construction 
ACE   Airport Construction Projects       K. Kobayashi    06/96 
LAB   Analytical Instrumentation          K. Nakada       08/96 
SPT   Athletic Shoes                      K. Takabatake   05/96  
AUT   Automobiles                         H. Tamada       09/96 
ELC   Automotive Semiconductors           T. Ogawa        03/96 
POL   Biotech in Waste/Pollution          K. Nakada       04/96 
      Control 
CPT   Computer Market                     T. Ogawa        08/96 
FUR   Contract Furniture                  K. Nomoto       03/96  
JLY   Diamonds                            I. Ieda         04/96 
BLD   Doors                               K. Takabatake   07/96 
MFI   Eel                                 T. Asakawa      01/96 
ELP   Electric Power Equipment            K. Kobayashi    03/96 
N/A   Flat Glass                          K. Sudo         07/96 
FPP   Food Processing Machinery           T. Masuda       07/96 
AUT   General Aviation Aircraft           H. Tamada       05/96 
HCG   Housewares                          K. Nomoto       08/96 
ACE   Hyogo Prefectural Government        S. Okuno        09/96 
      Projects 
MED   Implantable Medical Devices         S. Kimura       06/96 
ACE   Local Government Major Projects     T. Ohmura       08/96 
      1996 
GSV   Mail Order Business (Personal       M. Muto         11/95 
      imports) 
GCG   Marina Services and Systems         A. Inaba        05/96 
MED   Medical Equipment                   S. Kimura       11/95 
APP   Men's Outer Garments                I. Ieda         09/96 
MTL   Metal Cutting Machine Tools         T. Masuda       12/95 
TEL   NTT                                 M. Kawajiri     01/96 
ACE   Osaka Prefectural Government        S. Okuno        05/96 
      Projects 
PAP   Paper                               K. Sudo         08/95 
TEL   PHS                                 M. Kawajiri     04/96 
PLB   Pleasure Boats/Accessories          A. Inaba        11/95 
MFI   Spiny/Rock Lobster                  T. Asakawa      07/96 
BOK   Translated Book Market              M. Muto         08/96 
 
      2.  Available FY 95 Industry Sector Analyses (ISAs)  
 
SECTOR           TITLE              SPECIALIST 
 
APS   Auto Parts & Accessories for OEM   H. Tamada 
TES   CATV Industry                    M. Kawajiri 
ACE   Central Government Construction Projects  T. Ohmura 
MFI   Cod Roe                       T. Asakawa 
AIR   Commercial Helicopters        H. Tamada 
CSF   Computer Game Software        M. Muto 
LAB   Electric Test and Measuring Instruments  K. Nakada 
ELC   Flat Panel Display            T. Ogawa 
FOD   Health Foods                  A. Inaba 
BLD   DIY Products/Home Center      A. Inaba 
FUR   Household Furniture        K. Nomoto 
ACE   Housing and Urban Developmt. Corp. Projects  K. Kobayashi 
BLD   Imported HOMES    K. Takabatake 
ACE   Japan Official Development Assistance Proj.  T. Ohmura 
ACE   Kobe Municipal Projects  S. Okuno 
COS   Make-up Preparations   K. Nomoto 
MUS   Musical CD's    M. Muto 
PAP   Nonwovens Market              K. Sudo 
ACE   Osaka Municipal Projects      S. Okuno 
MFI   Oysters                       T. Asakawa 
CPT   Personal Computers            T. Ogawa 
JLR   Precious Metal Jewelry        I. Ieda 
PVC   Pumps                         T. Masuda 
ELC   Semiconductors Equipment      T. Ogawa 
SPT   Snow Boards                   K. Takabatake 
ICH   Specialty Chemicals           K. Sudo 
ACE   Tokyo Metropolitan Govt. Construction Proj. K. Kobayashi 
PVC   Valves                        T. Masuda 
POL   Wind Energy Generation        K. Nakada 
APP   Women's Outer Garments        I. Ieda 
 
      3.  FY95 USDOC-MITI-JETRO Joint Market Research Reports 
 
APS   Auto Accessories 
COS   Body Care Products 
POL   Collection and Disposal of Industrial Waste 
POL   Environmental Consulting Business 
BLD   Kitchen Cabinets; Residential Use 
GSV   Large Scale Retail Stores 
ACR   Refrigeration and Cold Storage for Commercial Use  
GSV   Small and Medium Sized Retail Stores 
BLD   Toilet and Bath; Faucets and Fixtures 
TXP   Upholstery Fabric 
 
      4.  Special Reports 
 
JAPAN MARKET INFORMATION REPORTS (JMIR's): 
 
JMIR-1  Business Support Organizations in Japan, 1994 
JMIR-2  Business Publications in English, 1995 
JMIR-3  Cost of Doing Business in Japan, 1993 
JMIR-4  Advertising in Japan, 1993 
JMIR-5  Guide to Business Support Organizations in the Kansai  
        Region,  1994  
JMIR-6  Ranking of Japanese Companies; Top 20 by Industry and Top 5 by 
Product in 1993 
US&FCS Japan Services Guide  
Japanese Databases Accessible from the U.S., 1993 
 
B.  Agricultural Trade Reports  
 
Market Briefs Available from the U.S. Agricultural Trade Office ATO), 
Tokyo, Japan  
 
PUBLICATION NAME:                       PUBLICATION DATE (SOURCE): 
 
Beer, Japanese Market for       5/95  (ATO) 
Cookies, Japanese Marker for    5/95  (ATO) 
Food Processing Sector, The Japanese  2/95  (ATO) 
Frozen Foods                    5/95  (ATO) 
Microwaveable Foods             5/95  (ATO) 
Retail/Wholesale Revolution     2/95  (ATO) 
Snack Products (Potato, Wheat & Corn)  10/94 (ATO) 
 
 
U.S. Department of Agriculture Scheduled Commodity Reports 
 
COMMODITY REPORT                        DATE MADE PUBLIC 
 
Agricultural Situation Annual Report       Late September 
 
Kiwifruit Annual Report      1/96 
Strawberry Annual Report     3/96 
Citrus Annual Report        11/95 
Citrus Semiannual Report     5/96 
Fresh Deciduous Fruit Annual Report    9/96 
Canned Deciduous Fruit Annual Report   9/96 
Avocado Annual Report                 12/95 
 
Livestock Annual Report       8/96 
Livestock Semiannual Report   2/96 
Dairy Annual Report          12/95 
Dairy Semiannual Report       5/96 
Poultry Annual Report         6/96 
Poultry Semiannual Report    11/95 
 
Sugar Annual Report          4/96 
Sugar Semiannual Report     10/95 
Frozen French Fried Annual Report   10/95 
Processed Sweet Corn Annual Report  10/95 
Wine Marketing Report               12/95 
 
Grain and Feed Annual Report          2/96 
Oilseeds and Products Annual Report   3/96 
Tobacco Annual Report          5/96 
Tobacco Semiannual Report     11/95 
Seeds Annual Report            6/96 
Cotton Annual Report           6/96 
Forest Products Annual Report  8/96 
 
Individual reports can be requested by contacting the Agricultural 
Affairs Office of the U.S. Embassy in Tokyo.  Persons wishing to receive 
these reports on a regular bases, however, should subscribe to the 
report series through the following address: 
 
      Foreign Agricultural Service 
      Reports Office 
      Room 6072-S 
      Washington, DC  20250-1000 
      Phone:  (202) 720-0924 
 
 
APPENDIX G  -  TRADE EVENT SCHEDULE 
 
U.S. Government involvement in recruiting and promotion of trade 
promotion events in Japan is abbreviated as follows: 
 
BFC:  Business Facilitation Center   SEM:  Seminar 
BIO:  Business Information Office    SFO:  Solo Fair (Overseas Procured) 
CTF:  Certified Event   SFW:  Solo Fair (Washington Procured) 
MKR:  Matchmaker   SM:   Seminar Mission 
PIP:  Post Initiated Promotion   TFO:  Trade Fair (Overseas Procured) 
RC:   Regular Catalogue Show   TFW:  Trade Fair (Washington 
                          Procured) 
VC:   Video Catalogue Show   TM:   Trade Mission 
 
A.  US&FCS FY 96 TRADE PROMOTION EVENTS FOR JAPAN 
 
EVENT   SITE      TYPE OF EVENT   DATE 
 
Power Seminar '95   USTC   SM   10/17/95 
 
'95 American Home Show/Seminar   Sendai   SEM   10/18-19/95 
 
The 31st Tokyo Motor Show   Makuhari   TFW   10/25-11/8/95 
       (Chiba) 
 
Cable TV Technology USA 95   USTC   SFO   11/30-12/1/95 
 
American Trade Fair in Kyushu   Kitakyushu   TFO   11/30-12/3/95 
 
The 6th U.S. Construction Design Fair   Kitakyushu   TFO   11/30-12/3/95 
 
ECO Goods Show   USTC   SFO   12/12-13/95 
 
U.S. Apparel Show   USTC   SFW   1/17-19/96 
 
Multimedia Semiconductor Seminar/   USTC   SFO   1/24-25/96 
Exhibition 
 
JAPANTEX '96   Makuhari   TFW   1/24-27/96 
       (Chiba) 
 
ITS Exhibition & Seminar   USTC   SFO   2/14-15/96 
 
Tokyo Int'l Gift Show   Tokyo   CTF   2/21-23/96 
 
Onsen Communications   Okinawa   PIP   2/29-3/2/96 
 
U.S. Housing Fair & Seminar   USTC   SFO   3/13-15/96 
 
The 15th Western Japan Total   Kitakyushu   TFO   3/17-20/96 
Living Show  
 
International Outdoor Marketing Show   Nagoya   TFO   4/27-29/96 
 
The 10th American Electronics Show   Fukuoka   SFO   5/16-17/96 
 
'96 American Home Show/Seminar   Sapporo   SEM   6/6-7/96 
 
Onsen Communications   Hokkaido   PIP   8/29-31/96 
 
Tokyo Intl. Gift Show   Tokyo   CTF   9/4-6/96 
 
Biotechnology Applications for Waste   USTC   SFO   9/25-26/96 
Treatment & Environmental Contamination 
Remediation Exhibition/Seminar 
 
U.S. Design & Construction Fair   Fukuoka   SFO   Sep 1996 
 
U.S. Design & Construction Fair   Osaka   SFO   Sep 1996 
 
U.S. Sporting Goods Fair   USTC   SFO   Sep 1996 
 
 
B.  US&FCS FY96 INTERNATIONAL BUYER PROGRAM 
 
EVENT   LOCATION      DATE 
 
MEDTRADE/NHHCE '95   Atlanta, GA            11/15-18/95 
 
Greater New York Dental Meeting   New York, NY      11/25-29/95 
 
National Assn. of Home Builders   Houston, TX       1/26-29/96 
(NAHB) Show 
 
Pittsburgh Conference and Exposition   New Orleans, LA   March 1996 
on Analytical Chemistry and Applied 
Spectroscopy 
 
Waste Expo '96   Las Vegas, NV      3/21-24/96 
 
Cable TV   Los Angeles, CA          4/28-5/11/96 
 
Electronic Entertainment   Atlanta, GA     May 1996 
 
NEOCON   Chicago, IL                       June 1996 
 
 
C.  AGRICULTURAL TRADE EVENT SCHEDULE 
 
EVENT	LOCATION             DATE 
 
ATO Beverage Showcase   ATO Tokyo & ATO Osaka            Nov. 1995 
 
PLMA's World of Private Label in Asia   Makuhari         1/24-25/96 
 
Foodex 1996   Makuhari                                   3/12-15/96 
 
Wine Japan and Beers & Spirits   Harumi, Tokyo           5/27-30/96 
   Japan 1996 
 
International Food Ingredients &   Harumi, Tokyo         5/28-30/96 
   Additives exhibition and Conference 
 
Tokyo International Seafood Show '96   Harumi, Tokyo     6/12-14/96
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