The time is right for Japan to implement policy changes to eliminate barriers to foreign investment and encourage more cross-border mergers and acquisitions, U.S. Ambassador Thomas Foley said Thursday in Tokyo.

Speaking at the "Conference on M&A in Japan," Foley cited ways the U.S. has benefited from foreign investment, including increased efficiency in business and jobs created by foreign subsidiaries. Once Japan's environment for mergers and acquisitions by foreign companies improves, "Japanese people can better enjoy the economic and social benefits that greater participation by foreign capital can provide," Foley said.

Japan is seen as having a very small stock of inward foreign direct investment compared to other advanced nations. Kensei Mizote, parliamentary vice minister of international trade and industry, cited during the conference "the negative image Japanese people have about M&A" as one of the main causes for this.

From now on, he said, "We have to open the door of the country. ... We have to change our awareness." The conference was sponsored by the U.S. Embassy, the Ministry of International Trade and Industry and the Japan External Trade Organization. Following the speeches by Foley and Mizote, a panel of Japanese and foreign businessmen discussed ways to increase M&A activity.

Yoshitaka Matsubara, president and chairman of LanCept K.K., called for a new corporate philosophy. In Japan, the company must be seen as an ongoing project rather than a static entity owned by managers, he said.

Nicholas Benes, president of Japan Transaction Partners, emphasized the need for the government to stop the taxation of stock exchanges. The scarcity of mergers and acquisitions in Japan "is often driven more by economics than by cultural mentality issues," Benes said.