Foreign direct investment totaled 1.536 trillion yen in the fiscal first half through September, down 18.7 percent from a year earlier, the Finance Ministry said Tuesday.
The bulk of foreign direct investment was made through acquisitions of shares in Japanese firms, which fell 26.6 percent to 1.326 trillion yen, or 86.3 percent.
Foreign loans to Japanese companies amounted to 209.8 billion yen, up 148.9 percent.
U.S. direct investment in Japan plunged 33.1 percent to 441.4 billion yen, accounting for 28.7 percent.
But European direct investment in Japan jumped 875.1 percent to 901 billion yen, buoyed by the acquisition of Japan Telecom Co. shares by British mobile phone titan Vodafone Group PLC.
European direct investment accounted for 58.7 percent of total investment.
The number of direct investments by foreign firms stood at 725 in the fiscal first half, down from 853 a year earlier.
Meanwhile, direct investment overseas by Japanese businesses totaled 1.674 trillion yen in the first half, down 40 percent from a year earlier.
Europe was the top destination, attracting 606.9 billion yen, down 49.3 percent and accounting for 36.3 percent of outflow in the six months.
Investment in North America fell 57.7 percent to 393.9 billion yen, and that in Asia rose 11.7 percent to 337.5 billion yen.