ABSTRACT
When Japanese capital first responded to the rise of the yen by favouring the NICs as suppliers of low-cost components for its machinery industries , its interest in ASEAN seemed to fall together with declining commodity prices. By mid-1987 , however, the situ ation had changed, as the higher yen combined with revalued cur rencies and rising wages in the NICs to force Japanese companies to look for cheaper labour. There was thus a shift from the NICs towards ASEAN, where totally different wages offered opportunities to recapture the competitive power Japanese capital had lost . DFI has thus been flowing into ASEAN in torrential proportion, and double-figure rates of growth are being anticipated .
