Tokyo's Shinjuku area is seen with Mount Fuji in the background. Photo: REUTERS file
business

Race to boost financial hub status intensifies among Japanese cities

35 Comments
By Noriyuki Suzuki

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35 Comments
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Better than hosting the Olympics.

6 ( +9 / -3 )

The height of optimism I think. The tendency has been for foreign banks and so on to leave Japan rather than come in, with heavy handed and opaque regulation being a big reason. It is difficult to imagine that the FMA have changed their tune on that one.

Having said that the likes of HSBC came in with a retail business model that just was never going to work in Japan.

With low interest rates everywhere, the remaining foreign banks that used to attract a lot of Japanese retail investors to enter foreign currency deposits are probably finding it much harder with next to no interest rate differential. Perhaps some of these banks will exit the Japanese market in due course as business gets harder.

If there are to be new entrants, they are likely to be in the corporate and institutional space I suppose.

12 ( +13 / -1 )

Only possible candidate is Tokyo.  Agree the costs as well as the ridiculous regulatory regime make Tokyo an unattractive prospect for foreign financial institutions.  Only attraction is the size of the Japanese economy.  And pool of capital.  Even there the local banks have an unfair advantage.

That is a great photo at the top of the article.

6 ( +9 / -3 )

why would foreign companies want to set up in Japan , when regulations and Japanese litigation put unfair practices against any company competing with the Japanese rivals, never going to happen

16 ( +20 / -4 )

I wonder why most Majority of the APAC head office is in Singapore?? Especially Information Technology? Where did all the good IT jobs go to they went to Singapore and left Tokyo.

6 ( +8 / -2 )

With extortionate corporate tax and an extraordinarily large amount of red tape and bureaucracy in Japan what would attract foreign businesses to move here?!

16 ( +17 / -1 )

Japan missed the financial boat decades ago in the 80s & then the early 90s after that as other have already said foreign banks etc were scaling down or leaving.

I dont see Japan having any success with this ""new"" idea

12 ( +12 / -0 )

Race to boost financial hub status intensifies among Japanese cities

That will become meaningless race, try to race with Singapore instead domestically among themselves.

8 ( +8 / -0 )

In the age of telework does it matter?

4 ( +6 / -2 )

Japan would need to overturn its entire culture to succeed in this. As others have pointed out above, the bureaucratic opacity in a language culturally attuned to obfuscation and imprecision and documentation in a script virtually unknown out side the islands are alone sufficient reason not to risk the investment. Add in the unjust legal system that has recently been subject to the glare of international scrutiny and the technologically backwardness of most Japanese business, administrative and financial structures and it becomes a no hoper.

Singapore has all the geographic advantages without any of the above problems, is renownedly business friendly and has a population fluent in English to boot.

This makes me sound anti-Japanese, which I am not, but the relative advantages and disadvantages on the ground are evident and not in Japan’s favour. They have been evident since the 90’s and should have been dealt with long ago, but haven’t. Way too late now alas.

16 ( +16 / -0 )

In the age of telework does it matter?

Strictly business, for the most part it doesn't . Geography actually lost relevance long long time ago. Even if everything goes well on the tax front all i see is small offices with bilingual Japanese employees handling accounting. But then again technically that too might fit the definition of a financial hub.

For people to come and spend their earnings here you will need normal food, schools, entertainment , gambling and legal system inline with western values.

As is it feela a bit N.Korea-ish. There is the Nissan situation , there is the Bitcoin bloke situation

It is a good idea, I am just not that optimistic

2 ( +3 / -1 )

It's easy to set up a company or business here, but the challenge is running one, and the behaviour of banks and financial services agencies is one of the major obstacles to your operation. The National Tax Agency is the only one that operates digitally and actually helps businesses.

The paperwork required to support a simple bank transfer in and out of the country is ridiculous, while the interrogation of why you need to do it would make the Stasi envious. After ten minutes at the bank for a millon yen transfer, you feel like a criminal; yet the banks themselves launder and lose billions without a single question.

No-one in their right mind would set up a financial services company here!

10 ( +10 / -0 )

Citibank, got the boot after various improprieties. Including their oft glossed over penchant for money laundering. And tendency to overcharge. Why invite a gang of thieves?

-7 ( +1 / -8 )

Good luck tempting new foreign companies and employees when you have proven again and again throughout the Corona crisis that foreigners are not wanted and liable to be locked out of the country and their livelihood at a moment's notice.

And that's before all the other considerations that are the reason why Japan isn't already a financial hub and Singapore is - timezone, language barriers spoken and written, archaic working culture, regulation, bureaucracy... the list goes on.

11 ( +11 / -0 )

Citibank. Now there's only one Japanese which accepts foreign checks.

1 ( +3 / -2 )

It’s very simple. You give me investment money and all hubs will grow. Or, you don’t give me it and all the three hubs will continue sinking into a nothing. You do understand that, don’t you? lol

2 ( +3 / -1 )

I really wish Japan would focus on domestic issues as a priority instead of wanting to look big in the eyes of the world all the time. All you hear is "We want to make (Japanese city/location) the hub of Asia/world" and then the people in the region, if not the nation as a whole, suffer while they attempt in vain to accomplish it.

4 ( +5 / -1 )

Financial services companies have been delisting from the TSE and leaving Japan for decades due to government regulation, a tilted playing field, and the difficulty finding local staff competent in English. This move might have worked before the bubble (created by the government's inability or unwillingness to curb property speculation) burst. Thinking that foreign brokerages and banks are going to make Japan their base at this point is ludicrous - the same kind of thinking that sees gambling casinos where foreign tourists are fleeced as a way to end the economic morass the LDP has brought us for the past 30 years.

7 ( +7 / -0 )

People ask why foreign businesses would set up here in Tokyo. However, if you go to downtown Tokyo, you'll see the offices of lots of foreign companies. There must be good reasons to be here.

-2 ( +1 / -3 )

@kaerimashita

I fully agree that Tokyo is the most prominent candidate here. And about the language barrier issues, I was there last December on vacation, and I saw a lot more English around the city that I could’ve ever expected, and I’ve been into Japanese culture for like 20 years, and I was still shocked.

And you’re right on another thing, that is a great photo at the beginning of the article. Just another reason why Tokyo’s a very attractive candidate, considering that you have that look out the office windows there. A picturesque scene indeed.

-5 ( +0 / -5 )

It seems that for once I am not the most critical voice here.

But I am impressed one person here could complete an international transfer in 10 min at a Japanese bank. I am lucky if I get out in an hour and that after the privilege of paying, now, 8000 yen, for someone to push a key on their keyboard. And that happens everytime as everytime they act like they never seen me before and this is the first time I or them make an international transfer.

I like a good laugh but considering making Japan a financial centre is too sad to be funny

5 ( +5 / -0 )

@Oxycodin

I wonder why most Majority of the APAC head office is in Singapore?? Especially Information Technology? Where did all the good IT jobs go to they went to Singapore and left Tokyo.

Well I don’t know why the IT jobs went there, but ask for jobs in general, there’s one reason why Singapore it’s such a prominent city in that regard, in the APAC region. One place actually.

The Straight of Malacca

0 ( +0 / -0 )

After months of making foreign residents and businesses feel they are not welcome, they expect new businesses to set up here? That is without the poor English skills and the awful Japanese businesses practices to negotiate.

3 ( +3 / -0 )

@smithinjapan

I really wish Japan would focus on domestic issues as a priority instead of wanting to look big in the eyes of the world all the time. All you hear is "We want to make (Japanese city/location) the hub of Asia/world" and then the people in the region, if not the nation as a whole, suffer while they attempt in vain to accomplish it.

You know, I very much agree with your sentiment and what you’re saying. I mean, just their overall issues regarding the workplace, as well as all the pressure being put on students, is reason enough to back off on this one and focus on those two issues alone. I mean yes, there have been significant improvements as of late. But still, from all that I’ve heard, it’s still a fairly big problem.

2 ( +2 / -0 )

Are they for real? After the Ghosn 'incident', where Nissan executives were treated, let's say differently, I mean kindly, I'm sure in New York,Hong Kong,London and Singapore, all those CEOs are queueing up to come to Tokyo and work with their Japanese policemen, I mean colleagues, sorry. And Suga knows how attractive the 50% inheritance tax on foreign assets really is. Sure, Tokyo is going to be the next big Asian financial centre, just because of the nice view from your office window. Why don't they start from the basic: teach kids English and scrap katakana, maybe they will all stop saying hotto, itsu, etc. What do you need Katakana for in 2020? Imagine how long would it take to come to a decision on a matter like that? I would say about 200 years and they would most likely replace with something suspiciously similar.

1 ( +2 / -1 )

Talking about Suga: apparently is not very keen on answering questions, see Reportes sans frontiers website for more on him and his friend Abe. Japan ranks 66 on the world press freedom index. Suga should answer those journalists question instead of talking about making Japan a financial hub... oh sorry and scrap the 72h pre flight test for non Japanese only !!! It is blatant discrimination !!! Still waiting for your CEOS to come, are you?

1 ( +1 / -0 )

Japan will need to overhaul it's culture of how they think about foreigners.

I graduated from a Japanese uni,I speak fluent Japanese,have lived here for many years but Japanese people still avoid me like a plague.Getting services at Japanese companies is still a nightmare.Even making real Japanese friends is not easy.When I need to consult,the only people I can rely on are other foreigners.

Jobs for foreigners in Japan are very limited.Just call a Japanese company and try and get a job there.even if you have the qualifications,the fact that you have a foreign name rules you out.

4 ( +4 / -0 )

With the greatest respect, Fukuoka must be a complete non-starter. With few direct flights to Europe from Kansai, even Osaka will be struggling. You would think a hub airport would be a bare minimum. That leaves only Tokyo.

Tokyo does have things going for it, international schools, lots of Michelin restaurants, good access to great skiing and other outdoor pursuits (golf etc), and the potential (at least) to commute on the shink from Karuizawa, which Bill Gates liked enough to build a department store-sized house. Lots of other questions will remain though over how open the market is, what the administration and regulators can offer, availability of English-speaking support staff and service providers who understand international clients, etc. etc. Since the advantages I've mentioned apply to lifestyle and the disadvantages apply to running a business, even Tokyo strikes me as highly unlikely.

0 ( +1 / -1 )

@Ken:

recently someone I met, an IT guy from India married to a Japanese lady, told me that knowing kanji is a curse for anyone who wants to find a job in Japan. Do you know what? I believe that now! You are too 'kuwashii' and a clear threat to their machinations and plots. I mean, are you being serious? Getting a job in a Japanese corporation for an expat is like trying to infiltrate the Mossad, try that :) They will never give away a precious permanent position to a non Japanese, until 2035 that is, when apparently there won't be too many available individuals of pure enough race to fill all the jobs openings. At that time Suga, still the PM, will most likely come out with another brilliant idea, a speech made in English, but translated for the press using Katakana characters.

1 ( +3 / -2 )

@Bigotryisinnate

Very true what your friend from India told you.

As a foreigner,knowing too much deep Japanese,you become a threat to their jobs.When I write my resume,they don't believe I did that on my own.

2 ( +3 / -1 )

@Ken

my advice to you is to seek employment with an international firm here in Japan, there are lots of jobs available for native Japanese speakers. If your level is high enough, you should be able to land one of those jobs. At the end of the day what they need is someone who can read and write kanji, not necessarily a Japanese national. Good luck with that!

1 ( +1 / -0 )

@robert maes -  I am impressed one person here could complete an international transfer in 10 min at a Japanese bank.

He didn't!

It took the usual 60-70 minutes, even with the pre-filled 'terebi madoguchi application system', but after 10 minutes I felt like a criminal!

2 ( +2 / -0 )

Japan first and foremost must invest in tech infrastructure. Finance and tech go hand in hand today. How can a country be a finance hub without ironclad secure and reliable tech infrastructure?

1 ( +1 / -0 )

Hahaa, good luck Japan, you’re not exactly attractive.

1 ( +1 / -0 )

The other global financial capitals are very harsh, if not impossible, for middle-income people to live in terms of affordability. That's no coincidence. When the bankers move in say, say hello to exorbitant housing prices, in addition to a host of other problems the financial sector inflicts on a society.

2 ( +2 / -0 )

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