Foreign investment in Japan in 2004/05 outstripped the country's investment overseas for the first time in half a century, official figures have shown.
Toyota is one firm considering its defences against takeover
According to the Finance Ministry, foreign firms sank more than 4 trillion yen ($36bn; £20bn) into Japan in the 12 months to March.
The figure, which had doubled in three years, was driven by an upsurge in money coming from the US.
Japan has till now had a reputation for being hostile to foreign investment.
Its corporate structures have traditionally been set up to cement cross-shareholdings between Japanese companies, preventing hostile takeovers by either domestic or outside buyers.
Recent legal changes could make mergers easier, after Japan's upper house of parliament on Wednesday backed a law already passed by the lower house.
But the rules still make hostile bids difficult, by easing restrictions on so-called "poison pill" defences which allow existing shareholders to buy up stock at reduced prices, thus driving off predators.
Car giant Toyota has been one firm which has said it was considering enacting a "poison pill" in case of a takeover attempt.
They have also been delayed a year, allowing for companies to take defensive measures.
Still, the difficulties of buying businesses in Japan seems not to have dissuaded foreign investors, the Finance Ministry figures indicate.
Many Japanese firms have dropped sharply in value after a decade of on-and-off recession.
The biggest draw was the finance and insurance sector, which accounted for almost 75% of the investment.
As much as half of the 1,400 trillion yen saved in Japan is sitting in accounts offering little or no interest, making for a tempting opportunity - and a demand for overseas expertise.
In contrast, Japanese investment overseas has fallen to 3.8 trillion yen - making Japan a net importer of investment for the first time since records began in 1950.
A key change was a shift in focus from the US - traditionally the most attractive destination for Japanese funds - to China, as economic ties grow and outsourcing of manufacturing increases.
China attracted 491bn yen, up nearly 40% from the year before and 340% since 2000.
The US, in contrast, attracted just 503bn yen - less than half the 2003/04 figure.