Q: What kind of activities does the TSE Singapore conduct?

A: Japan Exchange Group (JPX) currently has overseas offices in New York, London, Singapore, Hong Kong, and Beijing. At present, Singapore is the only location that holds a branch license. In 2015, the office was reorganized from a representative office focused on institutional research to a base focused on business operations. It acquired a business license to deepen ties with fast-growing Asian investors and issuers. The branch operates with a team of five: three people from Tokyo, including myself, and two local staff members.”

We have two main activities. The first is attracting overseas investors to the Japanese market. It is a form of investor relations (IR) activity for the entire Japanese market. It covers a very broad area, ranging from the Middle East to Asia and Australia. The other main activity is attracting initial public offering (IPO) candidates, primarily from Asia. This activity includes operational support for the “TSE Asia Startup Hub,” a support program launched two years ago.

The Shift Away from the Idea That Avoiding Japanese Stocks Was the Right Choice

Q: Do you think the perspective of overseas investors toward the Japanese market is changing?

A: It is clearly changing. Japanese stocks have strengthened their upward trend since around 2023. As Japan moved from deflation to inflation, investors in London and New York who had long monitored the Japanese market were the first to allocate funds. Currently, investors who had long stayed away from Japanese stock investment, as well as entirely new investors, are turning their attention to the Japanese market.

In retrospect, Japanese stocks performed poorly for a long time. For global investors, not holding them was the right choice. Meanwhile, many investors now see a clearly positive structural change in Japan. This comes amid China’s economic slowdown and increasing uncertainty in the U.S. economy.

Q: Specifically, are there changes in how overseas investors are investing in the Japanese market?

A: In the spring of 2024, I visited a sovereign wealth fund (SWF) in the Middle East. This investor holds total assets under management (AUM) of JPY80 tn, but their weighting of Japan-related investments was only 0.01% at that time. I spent three days explaining Japan’s current situation, structural changes, and outlook with the cooperation of securities firms, banks, and government agencies. Following this, in the summer of 2024, the fund announced it would raise its Japanese stock weighting to the MSCI average. Even for major investors like an SWF, it was normal not to hold Japanese stocks until two years ago.

In fact, this situation persists. There are still many investors around the world who do not hold Japanese stocks. Many investors question Japan’s economic outlook, citing the declining working-age population due to low birth rates and an aging society. When we provide comprehensive information on what is happening in Japan’s macro environment and the structural changes taking place—whether they are transient or long-term—they change their perspective on the Japanese market and begin taking action.

Since 2023, Japanese stocks have strengthened their upward trend. Many newcomers have rushed to enter the Japanese market so as not to miss out on profit opportunities. However, because they are unfamiliar with Japan’s structure and actual conditions, many tend to allocate funds only to a few globally well-known large corporations. Recent governance reforms have created the impression that constructive dialogue with overseas investors is expanding. However, as their understanding of Japan deepens, their scrutiny of listed companies intensifies. Japanese companies are now facing a critical moment that tests whether they have fundamentally transformed into entities capable of generating profits even in an inflationary economy.

Listing on the Japanese Market Becomes a Viable Option for Asian Startups

Q: Have you noticed any changes while working to attract startups, particularly in Asia?

A: A change is occurring where overseas startups are aiming for listing on the Japanese market.
Hong Kong was once the center of fundraising for startups in Asia. The shift in Hong Kong’s geopolitical standing following the COVID-19 pandemic has made startups hesitant to list there. Meanwhile, it is generally perceived that local markets like Singapore and Indonesia lack sufficient liquidity to be viable options for fundraising.”

Consequently, there is a growing understanding that listing on the Japanese market—where favorable valuations can be expected backed by abundant liquidity—is rational, even if it entails costs such as translation. Another major reason is that Japan’s economic and social structures have begun to turn toward the global market after the pandemic. This makes it easier to establish business collaborations with Japanese companies.

Q: Is listing on the Japanese market the ultimate goal for Asian startups?

A: An IPO is one of the important steps in a company’s growth process; it is not the final goal.
The essence lies in Asian startups expanding business collaborations with Japanese companies. Their services and products will then support economic growth in both Japan and Asia. Many startups in Asia differ in nature from those in the U.S. that focus on cutting-edge technology. In Asia, there are many valuable startups that serve as regional platformers with business networks across the region. Asia’s economic growth over the past decade has been remarkable.

The middle class with a strong appetite for consumption is growing, and purchasing power is rising. Prices in major cities are now even higher than those in Japan. There is also a wealth of talented young individuals who have studied in Europe and the U.S. Japanese companies turning their attention back to Asia will likely discover unexpected new business opportunities and talent pools. From that perspective, we are working to create touchpoints between Asian IPO candidates and the Japanese companies that could become their business partners.

Q: Are there any challenges in attracting Asian startups?

A: The issue is “human resources.” Since the end of the bubble economy, the number of foreign companies in the Japanese market has decreased. This has led to a significant decline in human resources within securities firms and auditing firms capable of handling foreign clients. Companies will not proactively allocate resources unless this field becomes a viable business. Therefore, we must create successful cases while the current favorable environment persists.

Japan possesses high technological capabilities and abundant risk capital. Meanwhile, Asia has a large pool of young talent and rapidly growing markets. If Japan’s risk capital is supplied to Asian startups, creating a framework that contributes to innovation and economic development in both regions, Asia will become a beneficial “corridor” of mutual complementarity.

Q: Do you also support Japanese growth companies in Asia?

A: We are making steady efforts in that challenge. From a global perspective, companies listed on the Growth Market in Japan are essentially “micro-caps” that fall outside the scope of many investors. Nevertheless, some executives are highly motivated to expand their businesses overseas and actively communicate with foreign investors. We are conducting experimental initiatives to bring such executives together and facilitate communication with overseas investors.

In Singapore and Hong Kong, a new class of investors known as “Family Office” is gaining presence. Because they can make quick decisions and take risks, they invest in companies at the pre-large-scale stage. They have the potential to become partners for growth companies that are difficult for typical institutional investors to reach.

We want to raise awareness among overseas investors of executives with similarly high levels of awareness and a desire to proactively engage with investors. Our goal is to convey the positive changes occurring in Japanese companies to the world. We intend to build a healthy ecosystem by resolving mismatches between investors and companies.

Q: After observing Japanese markets and companies from overseas—primarily Singapore—for five years, what do you feel is necessary?

A: It is globalization in the truest sense. I feel that the globalization of Japanese companies and investors is still a work in progress. I hope the market will be filled with players who understand global events and their future implications and who can move seamlessly across borders, including in communication.

In Japan, contact with other countries is expanding rapidly, including through inbound tourism. Globally, there is an increasing awareness of nationalism in both economic and security terms. Now more than ever, each of us is required to possess a global mindset. Only when we have a proper global mindset will Japan be in a position to be evaluated fairly by the world.

（Reported on Merch 9, 2026）