Koizumi ad asks for foreign cash

Junichiro Koizumi wants foreign investors on board

Japanese prime minister Junichiro Koizumi has launched a personal appeal for extra foreign investment.

Mr Koizumi urges investors to back Japan in a television advertisement airing this week in Europe and the US.

"We have all you need for success, and we welcome your business. Why don't you join us? Invest in Japan!" the prime minister says.

The advertisement comes amid signs that the Japanese economy is on the mend after ten years of stagnation.

Recent figures showed that Japan grew at an annualised rate of 7% in the final quarter of 2003, while corporate profits and business sentiment are up sharply.

The improvement stems partly from Japan's policy of weakening the yen against the dollar and euro, which has triggered a surge in export demand.

Hiroshi Matsumura, commercial minister at the Japanese embassy in London, said the publicity campaign was designed to reinforce the Japanese recovery by attracting "foreign know-how."

Turning the corner

"We are in the procedure of reviving the economy, and it's developing steadily," he told BBC Radio Five Live's Wake Up To Money programme.

Mr Matsumura said the latest upturn appeared sustainable, in contrast to previous recoveries which have fizzled out within months.

"Idle capacity has decreased to the level of 10 years ago, and the reduction of non-performing loans is steadily in process," he said.

"So it's quite different from past recoveries in the last 10 years."

Mr Matsumura added that while Japan remained in the grip of deflation - where falling prices deter consumer spending, undermining economic growth - this could work to foreign investors' advantage.

"The other side of the coin is that asset prices are quite low. It's a good opportunity for investment," he said.