The last few years have seen increasingly strong overseas merger and acquisition activity by Japanese companies. This is being driven by factors such as: a Japanese domestic market which is shrinking in many sectors as a result of Japan’s declining population; a cashed up Japanese corporate sector which is finally emerging from 20 years of balance sheet deleveraging, following the bubble of the late 1980s; a continued strong Japanese yen, making new overseas investment especially attractive; and the state of the economic cycle in the US and Europe, which is seeing companies in specific sectors as ripe targets for takeover.