[Blog Post 2 of 2 Parts] 26 Useful Insights I Gathered from “Japan on the Move Toward an International Financial Hub” Webinar (28 images)
~ Tuesday, November 1, 2022 Blog Post ~
In this second component of my two-part blog post, I enumerated my learnings from the educational “Japan on the Move Toward an International Financial Hub” webinar I participated in last Wednesday, October 19, 2022.
The resource people in this event, including the Tokyo Stock Exchange’s chief executive officer and Tokyo’s mayor, were very informative and clear about their plans for the city. I suggest the webinar’s organizer — Nikkei Asia — conduct more personal finance and international finance-themed webinars like that recent event.
I gathered the following helpful insights from the enlightening webinar which I find enriching in terms of my international finance and personal finance knowledge. I will apply these salient learnings in my writing career and personal finance life. I uploaded the 28 images from the event after my discussion below:
1. Japan’s incumbent Prime Minister Fumio Kishida visited London and New York’s stock exchanges lately. He intends to revive Japan as an international financial hub.
2. Being today’s third largest economy, Japan needs domestic and international investments to become an international financial center.
The country’s administrators are mindful of China’s economy now being 3/4 the size of the United States’ economy and is about to overtake the latter in 2030, thanks to excess capital and employment.
3. Japan eyes becoming more sustainable growth-oriented, focusing on investment and prosperity.
4. Japan’s 3 Investment Areas:
[a] PEOPLE — This area involves wage increases, human resource investment, employee skills improvement, vocational training, and re-skilling.
[b] SCIENCE, TECHNOLOGY, AND INNOVATION — The Japanese Government has allocated 10 trillion yen to develop research and development in universities and engage in financial growth strategies.
[c] STARTUPS — The Japanese Government has a five-year plan for startups and intends to make the country Asia’s startup hub.
5. Under Prime Minister Fumio Kishida’s New Capitalism program, a new form of financial market will be established. Finance will be mobilized and investments will be used to solve social issues. These elements are essential in building an international financial center that attracts money and people.
6. The Kishida Administration intends to quadruple investment to trillions of Japanese yen by 2030. Its asset-based income-doubling plan encourages the Japanese people to participate in the financial markets via investments. This agenda enables long-term asset-building for people’s retirement.
Moreover, under the government’s plan, financial service providers will place the customers and beneficiaries’ interests first. Financial literacy will be boosted via the delivery of financial education to the people from a neutral standpoint.
7. The Japanese Government has eased the country’s borders. It hopes many foreign tourists will visit Japan to boost its tourism and economy which are essential in the country’s intent to become an international financial center.
8. Social impact investment, green transformation, and transitional markets are components of Japan becoming an global financial hub.
9. The Tokyo Stock Exchange’s chief executive officer affirmed that his group is making the financial and capital markets of Japan more attractive. They vie for a sustainable society and support households’ effort in improving their asset formation and financial literacy, similar to the 401K plan in the United States.
10. The Tokyo Stock Exchange’s CEO cited that his team and the Japanese Government aim for sustainable financial growth and spread of financial and economic education among the public.
11. The Tokyo Stock Exchange is strengthening information disclosure in English to attract more foreign companies to enlist in the bourse.
12. The Tokyo Stock Exchange launched financial products, including exchange-traded funds or ETFs. It is increasingly issuing green bonds as Environmental, Social, and Governance or ESG investing continues to be the among world’s mega trends.
13. The Tokyo Stock Exchange will strengthen financial education for the people and encourage the latter to shift from saving to investing.
Furthermore, it has a money lab that provides financial and economic education for all generations. It aims for a smooth functioning of money management methods and convenience for a wide range of investors.
14. The Tokyo Stock Exchange Director and Executive Vice President Yasuyuki Konuma is mindful of global inflation and rising interest rates. He also noted of Japan’s surging cost of living, the plummeting Japanese yen, the Japanese economy’s poor state, and an inactive market.
Konuma said they continue to reorganize the TSE, which includes moving toward English-based disclosures and away from Japanese. This step has resulted in an increasing number of foreign firms coming to the Japanese bourse in the initial public offering or IPO stage.
15. The Tokyo Stock Exchange collaborates with the New York Stock Exchange and other large bourses in terms of financial products, regulation, financial technology, sustainability, and other developments.
It also boosted its links with its Asian counterparts as young generations in the region have emerged with remarkable missions in their budding startups that promote innovations.
16. Konuma remarked that Tokyo’s financial markets need to be trusted. He cited that the Tokyo Stock Exchange will ensure stable infrastructure; a solid foundation; diversified participating investors; participation of international, domestic, and institutional investors; developed financial assets; and investors from all generations becoming shareholders of Japan. All of these aspects will make Tokyo more enticing to the world.
17. Domestic and overseas investors injecting capital in Japan’s securities market will facilitate the creation of an international financial center in Tokyo.
18. Environmental, Social, and Governance or ESG investing, also known as impact investing, and sustainable finance are among the key features of Japan becoming an international financial center. They will benefit investors in the country by creating value and solutions.
Furthermore, the themes of Carbon Zero, green finance, green transformation, decarbonization, carbon neutrality, and the shift from crude oil are salient attributes of Japan becoming a global financial hub.
19. One example of a company supporting these campaigns is Daiwa Asset Management Company Limited, which offers sustainable financial products and aids clients in building assets based on ESG concepts.
Additionally, this firm encourages the people not to be fearful and to invest their funds for the long-term to get high returns.
The Daiwa Asset Management Company Limited noted that Generation Z consumers have high consciousness and a great interest in green funds and investments, which are sustainable and lead to something of value left for the future generations.
20. Mizuho Bank aims clients to engage in highly sophisticated investments and designed a retirement benefit system involving ESG investment funds towards a sustainable society.
The major Japanese financial institution cited that ESG is about environmental and social contribution, decarbonization, and shared value returns and it is a long journey. Human capital investment and corporate returns are in a trade-off. Sustainability and returns must be realized at the same time.
21. Tokyo aims to achieve decarbonization and energy security in an integrated manner. It will help in the resolution of the global climate crisis via the Tokyo Green Finance Initiative.
Green finance involves corporate finance, lease, insurance, green bonds, ESG bonds, and social bonds.
22. Tokyo will also focus on clean energy and move away from fossil fuel usage, issuing Tokyo Green Bonds and sustainability-linked loans to financial firms.
23. The digitalization of finance and support for financial technology are components of Japan becoming an international financial center.
24. Through online seminars, overseas visits, and expositions, the Japanese Government will promote Tokyo further worldwide as a likely financial center that can contribute in sustainable economic development and decarbonization globally.
25. Kabuto-cho, Japan’s main financial district, will undergo transformation and will involve the invitation of foreign capital and startups to elist in the Tokyo Stock Exchange. Regulations will be eased for new entrants.
26. Terence James O’Neill, Baron O’Neill of Gatley, is a British economist best known for coining BRICs — the acronym that stands for Brazil, Russia, India, and China, which are the four once rapidly developing countries that were thought to challenge the global economic power of the developed G7 economies.
He is the former chairman of Goldman Sachs Asset Management. O’Neill advised the Japanese Government to be realistic in its aim for Japan to become a global financial center. He also cited that Japan should identify what it can perform that truly makes it stand out and makes people think it has A CUTTING EDGE IN INVESTMENT AND BUSINESS.
