Japanese investors have significantly increased their investment in European startups, reaching over €33 billion since the 2019 EU-Japan Economic Partnership Agreement. This marks a substantial rise from the €5.3 billion invested prior to the deal. The growth is largely attributed to Europe's advanced startup ecosystem and a strong emphasis on deep tech and AI, with 70% of 2024's €3.5 billion funding targeting these sectors. Notable investments include Wayve's $1 billion funding round. Experts highlight Japan's corporate venture capital tradition and Europe's high startup density as driving factors behind this investment surge. Despite these advancements, language and cultural differences continue to pose challenges to further collaboration between Japanese investors and European startups.