Though hotly contested, Japan's plan to allow foreign companies to use their own shares to finance takeovers and mergers seems unlikely to unleash a flood of hostile bids from abroad. Nonetheless, the battle to push through the necessary legislation is turning into a vital test of the commitment of Shinzo Abe's government to economic reform and of the country's willingness to come to terms with globalisation.

The plan is fiercely resisted by the Keidanren, the employers' federation, which claims it will sap Japan's industrial vigour. The federation's campaign is fuelled particularly by fears among steel producers of being engulfed by the wave of global consolidation in the sector and by concerns that the country's technological commanding heights will fall into foreign hands.