Illustrative image (Source: VNA)
Tokyo (VNA) - Vietnam has surpassed Malaysia to become a bigger source of earnings for Japanese firms, according to the Bank of Japan (BoJ).

The BoJ statistics, quoted by Japan’s Kyodo news, showed that Japan's foreign direct investment (FDI) in Vietnam totalled 198.1 billion JPY (1.74 billion USD) last year, up 70 percent from 2014, on the back of an increase in the number of Japanese businesses in the country and its high economic growth.

The combined number of registered firms at Japanese business associations in Hanoi and Ho Chi Minh City has increased by more than 250 since 2014 to nearly 1,500 as rising labor costs in China have prompted them to open plants in Vietnam.

According to a survey by the Japan External Trade Organisation, nearly two-thirds of Japanese businesses in the country are profitable.

In contrast, Japan's FDI income from Malaysia dropped about 24 percent from 2014 to 167.5 billion JPY in 2016. -VNA