How did Japanese companies use overseas factories to respond to trade tensions and a stronger yen?

To address trade friction with foreign competitors and mitigate rising costs caused by the appreciation of the yen, Japanese companies implemented a strategy of establishing overseas manufacturing facilities.12

By setting up production bases in Asia, North America, and Europe, these firms were able to localize production, which helped alleviate protectionist sentiments among key trading partners and improved cost efficiency. This approach was utilized with particular success by manufacturers of automobiles and advanced electronic products. Over time, this shift toward increased production abroad contributed to a relative falloff in direct exports from Japan, as companies prioritized local supply chains in their target markets.1234