Japanese firms have been acquiring overseas assets more aggressively in recent years and will continue to do so as they seek to increase market share in the global economy, JPMorgan said in a Tuesday report.

Total merger and acquisition transactions in Japan inched up 1.5 percent year-on-year to $198 billion in 2016, the report said. In particular, the country’s outbound M&A deals reached $101 billion in 2016 — the second highest historically, JPMorgan said.

The value of outbound transactions accounted for 51 percent of total deals in Japan and a 13 percent increase from the previous year, the bank said.

JPMorgan’s report came as global M&A activity pulled back from a record breaking year in 2015. A report by KPMG found that the total value of deals last year fell to $4 trillion, down from $4.9 trillion in 2015.

Various market watchers have projected that corporate deals would remain “robust” this year despite fresh political and economic challenges, but the chances of matching 2015 are slim.

Japan may not be spared from the global M&A slowdown, but JPMorgan said the increase in cross-border deals by the country’s firms can be sustainable as they seek growth opportunities amid a shrinking domestic market. In the first quarter 2017, outbound deals by Japanese firms totaled $18 billion, accounting for 53 percent of total transactions, the bank said.

“Japanese corporations have increasingly embraced outbound M&A to fund growth and advance their strategic objectives … they historically did not embrace M&A as a core element of their strategy. M&A was culturally challenging, given the perceived loss of face involved when selling a business,” JPMorgan wrote in the report.

“The mindset regarding acquiring international businesses has changed, as it has become necessary to enhance competitiveness and growth.”

Japan’s declining population and a slowing economy have created a greater sense of urgency among its corporations to pursue outbound acquisitions, enter new markets and gain new products and capabilities, JPMorgan said. The low borrowing costs and supportive government policies have also helped Japanese firms, the bank said.

One company that has been particularly active in the M&A space is SoftBank Group, which in the past year made acquisitions in a range of sectors including finance, real estate and technology. Those are also the sectors that JPMorgan identified as likely seeing major acquisitions by Japanese firms.

In terms of geographies, JPMorgan said activity is expected to be directed primarily at the United States and Europe given Japanese firms’ preference for mature companies with stable cash flow and strong brand recognition.

However, emerging markets such as Southeast Asia could get some attention as well.

“To regain global prominence with a shrinking domestic economy, Japanese corporations must acquire market share by entering new markets or expanding into new growth areas. Relying purely on in-house R&D and organic growth from the domestic market alone is clearly insufficient to achieve growth objectives,” JPMorgan said.