However, Australian companies and employees needed to abandon their reluctance to embrace Asia if they hoped to boost their profits and careers, executives from ANZ, Japanese food and beverage giant Kirin and PricewaterhouseCooprs told The Australian.
The call for a fresh focus on Japan-related opportunities comes as business leaders in both countries prepared to mark the 50th anniversary of the industry body linking the two countries.
Julia Gillard and former Treasury secretary Ken Henry will address the Australia Japan Business Co-operation Committee conference in Sydney today, to be chaired by AJBCC chairman Rod Eddington and his Japanese counterpart, Nippon Steel president Akio Mimura.
A report published by PwC, to be introduced at the conference by Tokyo-based PwC partner Jason Hayes, shows the sheer scale of Japan's expansion into Southeast Asia, right on Australia's doorstep, and highlights the potential gains of tie-ups with Japanese firms.
The Revitalising Corporate Japan report shows that Japan's merger and acquisitions activity rose by 42 per cent in Asia from 2010 to 2011 and is now growing at an increasingly rapid pace.
Mr Hayes, who head PwC's Japan practice, said Japan was offering Australia its best chance to be a serious player in Asia instead of simply being a supplier of raw commodities.
"Australia needs to move quickly to take advantage and not remain fixated on China as the only game in town because I think ignoring Japan may be to our detriment," Mr Hayes said.
Leading Japanese firms such as Kirin, Uniqlo, convenience store operator Lawson and other corporate giants are spearheading a new push into China, Thailand, Vietnam, India, Indonesia and now Burma as growth opportunities in Japan dry up.
ANZ Japan chief Peter Davis said tapping into this expansion would help Australian companies boost their engagement in the region and would be vitally important for Australia's growth.
This expansion would provide Australian companies and suppliers with low-risk opportunities to join forces with Japanese industry and boost their sales in the epicentre of global growth, Mr Davis said.
"Japanese investment into Asia has doubled for each of the last three years," Mr Davis said.
"That's a huge influence on all of the Asian region.
"The penetration of Japan into Thailand, Vietnam and China is far, far deeper than Australia's has been. They might have had some difficulties, but they have had far more longevity in those markets and have a lot more experience than Australian companies do," Mr Davis added.
"The whole focus in Australia is on investment from China, when indeed the more significant investment over the last 10 years has been from Japan, and the Japan rate of investment has been increasing rapidly in the last three years."
Food and beverage giant Kirin, which owns Lion (formerly Lion Nathan and National Foods) in Australia and now sees 30 per cent of its profits come from Australasia, is the most successful example of this dual Japanese-Australian approach.
Senior executives from the company said it was deploying Australian staff, systems and products as it expanded in emerging markets in Asia and Latin America.
Kirin global head of strategy Ryosuke Mizouchi said that it was sometimes easier for Kirin to find talent in its Australian business than in Japan. Australian companies and employees were natural partners for Japanese firms bent on expansion, he said.
"From the cultural point of view, and also a governance and common-sense point of view, I think Australia and Japan can work together pretty well," Mr Mizouchi said.
"Instead of getting there all by ourselves, going together with Australian companies could give us an advantage. By combining that diversity of strengths I think we should become better at dealing with the new challenges in emerging markets."
Mr Mizouchi said people in Japan underestimated the importance of the relationship between Japan and Australia, although soon more companies would grasp Australia's potential as a market and as a springboard to other parts of the world.
The head of Kirin in Singapore, Hiroshi Fujikawa, said Lion's Australian management had great human relations and strategic planning skills, while Japanese staff remained world class in terms of product development, production techniques and research and development.
"If we could combine those strengths together, I think there are a lot of opportunities for us to jointly develop the emerging markets," Mr Fujikawa said.
But ANZ's Mr Davis said many Australian companies remained too nervous about expanding into Asia after a series of high-profile failures in recent decades.
"For many companies, it's still just a toe in the water," Mr Davis said. "There's a lack of significant strategic commitment. If they are to see the growth levels available, they are going to need to see a portion of their revenues coming from this part of the world."
Mr Davis said ANZ's Japan operation were vital to the bank achieving its goal of sourcing 25-30 per cent of revenue from outside Australia and New Zealand within five years.
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