Japan's economic ties to Hawai'i run far deeper than tourist shopping in Waikiki, and that's good news for the state's long-term growth prospects.

• Japan is the top source of foreign investment in Hawai'i, making up over half of all outside money coming into the state, mostly in hotels and resort real estate like the Royal Hawaiian Hotel land deal.
• Japanese tourist spending has fallen a lot since the early 2000s due to a weak yen, but visitor numbers have more than doubled since 2019 and Japan's economy is showing early signs of inflation and growth, which could bring spending back.
• The military is another big link: Hawai'i gets the largest share of defense spending of any state, and Japan is raising its own defense budget, opening doors for Japanese defense companies to invest or partner in Hawai'i.
• Agriculture is a quieter but growing tie — Japan imports huge amounts of seeds, and Hawai'i's varied climate makes it a good place to develop and test new crop varieties that could help Japan's aging farm sector.

Outlook: As Japan's economy slowly heats up and its defense spending grows, Hawai'i could see more investment and visitor spending from Japan beyond just Waikiki hotels.