How Japan's Asset Management Revolution is Reshaping Foreign Investment

Japan’s reforms, strategic sectors and cross-border partnerships are making the country a more attractive destination for long-term foreign capital.

• Japan’s roadmap targets ¥370 trillion ($2.3 trillion) of public-private investment by 2040 across 17 strategic sectors and 62 priority technology areas, including AI, semiconductors, energy and biotechnology.
• Mizuho identifies four investment areas with the clearest opportunities: resources, energy security and the green transition at ¥29 trillion, digital and cybersecurity at ¥55 trillion, semiconductors and AI at more than ¥100 trillion, and drug discovery and advanced medical care at ¥64 trillion.
• Nomura Asset Management says investor sentiment improved after the 2022 reforms because regulators, the Tokyo Stock Exchange, investors and companies now work more collaboratively, while Japanese corporate governance has caught up with Western standards.
• Nomura manages about £16 billion ($21 billion) in private assets and views private markets as social infrastructure supporting infrastructure, innovation and business transformation through patient capital.
• Deloitte cites a government target of ¥60 trillion in inbound investment this year, rising to ¥120 trillion by 2030, while L&G points to £500 billion ($662 billion) moving into UK pension buyouts over the next decade as a source of demand for international partnerships.

Takeaway: Foreign investors should assess Japan through sector-specific industrial strengths, private-market opportunities and local partnerships, while recognising that the case relies on the execution of reforms and long-term capital deployment.