This arrangement benefited Fender because it removed the Greco Fender copies from the Japanese market, which were selling in Japan at much lower prices than the American made Fenders and it also benefited Kanda Shokai because Kanda Shokai could then distribute Japanese made Fender branded guitars in Japan. Kanda Shokai owned the Greco brand name and one of the conditions of the Fender Japan agreement was that Kanda Shokai cease production of its own Greco Fender copies.
Yamano Gakki was known for once being part of Epiphone Japan.
Fender began negotiations with several Japanese musical instrument distributors and reached an agreement with Yamano Gakki and Kanda Shokai to establish Fender Japan. Fender was also losing sales in Japan to Japanese guitar brands such as Tōkai, Greco and Fernandes and the establishment of Fender Japan would benefit Fender sales in Japan, as well as overseas.
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