Japanese corporate investment in Korea has dropped 40 percent so far this year compared to 2012.
After the nuclear plant disaster in Fukushima in 2011, Japanese businesses rushed to set up operations in Korea attracted by cheaper electricity costs and ready access to advanced industrial infrastructure.
That year, Japanese direct investment here totaled US$2.29 billion, up 10 percent from the previous year. In 2012, it rose 99 percent to a record $4.54 billion.
But now it has fallen to the same level as 2011, dashing hopes that it would continue to rise for some time.
The Chosun Ilbo analyzed foreign direct investment data from the Ministry of Trade, Industry and Energy and found that Japanese investment here in the first nine months of this year totaled $1.96 billion, or only 60 percent of the same period last year.
In the first half of the year, Japan's total overseas investment fell 5.9 percent due to the weak yen, but investment in Korea fell a whopping 35.1 percent over the same period and the decline has become even more pronounced since the third quarter.
Chang Yoon-jong of the Korea Institute for Industrial Economics and Trade said at a time when Japan is pursuing pump-priming measures by bolstering homegrown industrial capacity instead of investing overseas, "Korean politicians are not making any effort to eliminate obstacles to foreign investment."