The trend of a rising share of overseas production among Japanese firms can be basically understood as a part of firms’ growth strategy to place production sites near markets that are experiencing rising demand, against the backdrop of a global shift of growth centers toward emerging economies. Having said that, the timing of this global shift is also affected by foreign exchange rate developments.
As you may recall, in the phase of significant yen depreciation toward the middle of the 2000s, the profitability of domestic production improved dramatically and firms started to refocus on domestic production while pausing their shift to overseas production.