Under a foreign exchange and trade law, investments of more than 10% in sectors considered vital for national security and public order need government approval.

The cabinet says the rule is a barrier to investment and cutting taxes, which are among the highest in the OECD.

The Japanese authorities blocked the UK-based Children’s Investment Fund from raising its interest in electricity utility J-Power to 20% last year, prompting EU trade commissioner Peter Mandelson to name Japan the most closed investment market in the developed world.