Japan is waking up to the true value of having a top financial centre – when will China?

Name: Japan’s new PM Yoshihide Suga inherits economic woes, Tokyo Olympics challenge
Uploaded: 2020-12-13T07:15:17.000Z
Duration: 2 min 11 s
Description: Japan’s new PM Yoshihide Suga inherits economic woes, Tokyo Olympics challenge

The launch of FinCity.Tokyo is a sign that Japan realises a financial centre is a means to better deploy national wealth, such as its household savings, the largest in the world. China can take a leaf out of its book

Reading Time:3 minutes

Why you can trust SCMP

Pedestrians in the Shibuya shopping district in Tokyo on February 24, 2020. Finance has traditionally been looked down on in Japan. Photo: Reuters

Anthony Rowley

Published: 3:15pm, 13 Dec 2020Updated: 7:48am, 14 Dec 2020

Analysts have long speculated as to which Asian financial centre – Hong Kong, Tokyo, Singapore (and, more recently, Shanghai or Shenzhen) – would emerge on top. This theoretical debate is becoming more real as Japan begins to realise what the true value of a financial centre is, beyond being a symbol of prestige.

This realisation has dawned suddenly and clearly, and has implications for other countries such as China.

A financial centre is not just about earning revenue (and creating employment) by providing services such as foreign exchange and securities trading, or other offshore activities. It is about the need to deploy domestic financial assets more effectively at home and abroad.

This is why the FinCity.Tokyo organisation, launched by the Tokyo metropolitan government together with 42 Japanese and foreign financial institutions and other organisations, is more than just another whimsical foray.

Its core aim is not so much about boosting Tokyo as a financial centre per se, as about the training of Japanese in the science (or art) of fund management. And that is not because fund management, including investment banking, is viewed as a glamorous profession.

02:11

Japan’s new PM Yoshihide Suga inherits economic woes, Tokyo Olympics challenge

Japan has some 1,900 trillion yen (US$18 trillion) in household savings, the largest in the world. But as experts such as analyst Jesper Koll notes, Japan is not good at managing these vast assets.