Direct investment in Japan by foreigners jumped 90.3 percent in fiscal 2004 from the previous year to a record 4.027 trillion yen, with capital inflow from the United States swelling more than sevenfold, the Finance Ministry said Wednesday.

The surge in foreign direct investment underscored active U.S. business expansion in Japan in the fiscal year that ended March 31, including the acquisition of mobile phone service firm DDI Pocket Inc. by U.S. investment fund Carlyle Group.

The overall figure for fiscal 2004 was up from 2.116 trillion yen the previous year for the first increase in two years, apparently spurred by the sustained recovery of the world's second-largest economy, the ministry said.

The previous record was 3.125 trillion yen in fiscal 2000, it said.

Of the 4.027 trillion yen spent to purchase Japanese stocks or offered as lending, 2.620 trillion yen came from the United States, which grew 650.1 percent from the previous year, it said.

The Netherlands came in a distant second at 512.8 trillion yen, up 62.1 percent. The Cayman Islands came third at 125.4 billion yen, down 57.1 percent.

Of the total foreign direct investment in Japan, 2.012 trillion yen stemmed from acquisitions of Japanese stocks, up 23.7 percent from the previous year, while 2.014 trillion yen came from lending activities, which included cases where non-Japanese parent companies provided financing for Japanese subsidiaries, up more than four times.

By sector, the financial and insurance industry came on top of the list with 2.977 trillion yen, up 192.4 percent.

The acquisition of Aoba Life Insurance Co. by Prudential Life Insurance Co., the Japanese arm of Prudential Financial Inc. of the U.S., contributed to the sharp rise.