Japan started to conclude detailed "new-generation" treaties in 2002, many of which contain provisions on the protection of regulatory space of the host State, taking into account the evolution of arbitral jurisprudence. The present chapter summarizes Japan’s inconsistent treaty practice concerning the protection of the regulatory space of the host State and analyses the rationale underlying this apparent inconsistency. Japan’s treaty practice suggests that restriction of the FET clause or the indirect expropriation clause, which may be politically required, is not necessarily so from a strictly legal point of view. This is perhaps because Japan has confidence in the evolution of the arbitral jurisprudence, which has been prudent enough to ensure that the regulatory space of the host State is not adversely affected by the application of an FET clause, whether autonomous or linked to customary international law, or the clause on indirect expropriation. Japan’s optimistic attitude may be explained by the fact that it has not been respondent in investment arbitration and may change when it is brought to arbitration, and is ordered to pay a hefty sum in damages to a foreign investor.