Tokyo, Japan has stepped up efforts to reemerge as a global financial center.
According to the Financial Times (FT) in the U.K. on the 17th (local time), the Japanese government has gone all out to attract overseas asset managers by streamlining regulatory procedures and offering services in English. It aims to capitalize on growing interest from foreign investors as large Japanese capital is poised to be deployed amid inflation and policy changes. The fact that New York bankers' main business trips are shifting to Tokyo, and that global hedge funds and asset managers are expanding offices and hiring, reflects this trend.
However, the industry says Japan faces many structural constraints to regaining its status as Asia's financial hub. One investor told the FT that there is an acute shortage of compliance staff and fund managers, comparing it to "pushing massive capital through the eye of a needle." There are only 20 to 30 international compliance officers in Japan, fueling a talent scramble, and foreign financial workers account for just 0.6% of all foreign workers, severely limiting globalization. Among those working in finance and insurance, the 20–34 age group fell from 610,000 in 2002 to 380,000 last year, showing weak inflows of young people.
Yamaji Hiromi, chief executive officer (CEO) of the Tokyo Stock Exchange, said Japan's corporate governance reforms are "still only at about 20%," and Ito Yutaka, head of the Financial Services Agency, also stressed that "only when more corporations expand overseas will a talent market form." On the ground, there was even talk that a global asset manager must offer at least 1.5 times base pay to hire Japanese talent.
The government has rolled out measures such as outsourcing compliance to external institutions and training new talent, but visible results have been modest. Experts noted that tax burdens, language barriers, and lengthy licensing processes remain Japan's weak points. Tokyo Gov. Koike Yuriko also acknowledged that "there are many challenges to boosting Tokyo's appeal as an international financial center."
Tax policy was also cited as an obstacle. There are concerns that steep tax rates for high earners could prompt talent to move to places like Singapore and Hong Kong. Kihara Masahiro, CEO of Mizuho Bank, said, "When income exceeds 40 million yen (about 3.7 billion won), we often consider relocating to other regions (because of tax issues)."
In the end, analysts say Tokyo's rise as a financial hub will depend not only on attracting foreign capital but also on how many specialized professionals it can secure. An industry expert emphasized the need to build a long-term ecosystem, saying, "It takes 8 to 10 years to develop a fully rounded portfolio manager."