Welcome to the one hundred thirty-second edition of the Japan FinTech Observer.

What a difference a year makes!

After last year's LDP leadership election, which Ishiba won in a run-off against Takaichi, the TOPIX sold off -3.5% and the Japanese Yen strengthened from ¥146 to below ¥142 to the US Dollar. This year, after Takaichi beat Koizumi in a run-off, the TOPIX strengthened about 3.25%, and the Japanese Yen weakened from ¥147.5 to over ¥150. We have published a background note on Takaichi, as well as an audio overview, both titled "The Takaichi Doctrine."

For those who are keeping track, October 1 marked the half-way point of Bank of Japan Governor Ueda's five-year term. So, although Takaichi commented just last week, "My view is that the government is responsible for setting the direction of fiscal and monetary policy, while specific monetary policy means fall under the responsibility of the BOJ," Ueda's job is safe. Regardless, the consensus is shifting towards an October rate hike, with our friends at Goldman Sachs sticking to their January prediction.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: 21st Financial Technology has reached an agreement for a capital and business alliance with Payment for; Orico leads Indonesia-based Honest's growth round, Mizuho provides debt financing; MUFG to establish equity fund to invest in Japanese growth companies; UNLEASH Capital Partners has announced the final close of its first fund at INR 300 crores

• Insurance: the future Mitsui Sumitomo Insurance Group; establishment of Sompo Wellbeing; Athene announces block reinsurance transaction with Sony Life; Japan Post Insurance at Snowflake World Tour Tokyo

• Banking: strategic regional bank consolidation in Chiba prefecture; Mitsubishi UFJ Financial Group is in advanced talks to acquire a 20% stake in Shriram Finance

• Payments: Sumitomo Mitsui Card takes controlling stake in V Point

• Capital Markets: Nomura's Global Markets franchise

• Asset Management: Sakana AI will partner with Daiwa Securities in its first alliance with a securities firm, building a "Total Asset Consulting Platform"

• Digital Assets: Nomura's Laser Digital is seeking regulatory approval to offer crypto trading services to institutional clients in Japan; gumi's ¥5.7 Billion bet on a blockchain future; the DCC's report on a fully on-chain settled, tokenized MMF in Japan; SBI Crypto hacked; SBI Ripple Asia has signed a basic agreement with Tobu Top Tours to realize a new payment platform

• The Last Word: FinTech Next Door

The Global Financial Centres Index (GFCI), published semi-annually by Z/Yen Group and the China Development Institute, stands as a premier benchmark for assessing the competitiveness of the world's major financial hubs. The 38th edition, dated September 2025, offers a timely and data-rich perspective on the shifting dynamics of global finance. By combining quantitative instrumental factors with thousands of assessments from financial professionals worldwide, the GFCI provides a nuanced ranking that influences policy, investment, and strategic business decisions.

This analysis delves into the performance of Japan's financial centres within the GFCI 38. It begins by establishing the broader global context, identifying the dominant players and overarching trends. It then narrows the focus to the fiercely competitive Asia-Pacific region, where Japan's cities vie for prominence against established leaders and rapidly emerging contenders. Finally, the report provides a detailed, city-specific examination of Tokyo, Osaka, and the promising associate centre of Fukuoka. The findings reveal a nation on a distinct upward trajectory, with Tokyo making a significant return to the top 15 and Osaka showing steady progress. However, the data also highlights persistent challenges related to international perception and the need to cultivate a more dynamic and diversified financial ecosystem to secure a leading role in the future of global finance.

This blog post has also been converted into an audio overview.

• 21st Financial Technology has reached an agreement for a capital and business alliance with Payment for, a leading Japanese payment software service provider; this partnership will strengthen the service integration between both companies and accelerate the deployment of 21st FinTech services in the Asian market, while also providing robust support for the business expansion of Payment for's merchants; SMBC Nikko was the financial advisor to 21st FinTech; TMI Associates and Anderson Mori & Tomotsune were the legal advisors to 21st FinTech; CTBC Bank, Mizuho Bank, and MUFG Bank provided funding to complete this transaction

• Orico leads Indonesia-based Honest's growth round, Mizuho provides debt financing: Honest, Indonesia's fastest-growing credit card issuer, has closed an oversubscribed growth round led by Orico, bringing the company's total equity funding to $100 million; the round saw continued backing from XYZ Venture Capital, SV Pacific Ventures, and Village Global, alongside new participation from other leading U.S. investors, including Gilgamesh Ventures; Honest also secured $40 million in debt financing from Mizuho Bank.

New funds

• MUFG to establish equity fund to invest in Japanese growth companies: Mitsubishi UFJ Financial Group, MUFG Bank, and Mitsubishi UFJ Trust and Banking Corporation (MUTB) have announced that they would establish an equity fund to principally invest in middle and later-stage startups (growth companies) in Japan; the investment team will be led by a Chief Investment Officer to be appointed through external recruitment and will start fund management with LP investments from MUFG Bank and MUTB; additionally, MUFG plans to invite LP investments from Japanese and international investors, envisioning a total fund size of 50 billion yen

• UNLEASH Capital Partners has announced the final close of its first fund at INR 300 crores, which was oversubscribed against the initial target; the fund, co-general partnered by Natsuki Sugai and Gojo & Company, is poised to invest in innovative early-stage startups revolutionizing the financial ecosystem in India; the fund attracted approximately 35 Japanese Limited Partners; this significant backing from Japanese investors underscores a shared mission to extend financial inclusion and build the future of finance in emerging markets

• The future Mitsui Sumitomo Insurance Group: Mitsui Sumitomo Insurance (MSI) and Aioi Nissay Dowa Insurance (ADI), the core non-life insurance companies of MS&AD Insurance Group Holdings, are progressing with merger discussions as announced on March 28, 2025; now, decisions have been made regarding changes to the company name and related details, as well as the corporate overview of the new company resulting from the merger, subject to the approval of shareholders' meetings and relevant authorities

• Establishment of Sompo Wellbeing: Sompo Holdings has established Sompo Wellbeing, a new company that will alleviate the three concerns of health, nursing care, and retirement finances, which arise from the declining birthrate and aging population, and will provide services that support balancing work with nursing care; by working to alleviate these social challenges with a sense of speed and with fresh ideas that go beyond existing frameworks, Sompo Wellbeing aims to realize a society where people think positively about aging

• Athene announces block reinsurance transaction with Sony Life: Athene, the leading retirement services company and subsidiary of Apollo Global Management, has announced that it intends to enter a block reinsurance transaction with Sony Life Insurance, a top-rated Japanese insurer; as part of this transaction, Athene will reinsure an in-force block of U.S. dollar denominated whole life insurance policies and will enter into an agreement with leading reinsurer Swiss Re to retrocede all mortality risk associated with the block; the transaction was announced on the day that the spun-out Sony Financial, of which Sony Life constitutes the largest business, started trading on the Tokyo Stock Exchange; Sony Financial stated that the impact of the Reinsurance on its consolidated earnings had been factored into the full-year consolidated earnings forecast for the fiscal year ending March 31, 2026 announced the same day in the “Financial Results, etc. of Sony Financial Group Inc. in connection with Listing on Tokyo Stock Exchange Prime Market.”

• Strategic regional bank consolidation in Chiba prefecture: The Chiba Bank and The Chiba Kogyo Bank have jointly declared their resolution to pursue a management consolidation; this strategic move, formalized through the signing of a Memorandum of Understanding, aims to establish a new bank holding company that will serve as the wholly-owning parent of both institutions; the consolidation, planned to be effective on or around April 1, 2027, is a forward-looking response to the evolving economic landscape, increasing complexity of customer needs, and the intensifying competition within the financial services industry; the core philosophy of this consolidation is to strengthen regional financial capabilities through a "Two Brands of Trust and Respect" model, preserving the unique identities and operational autonomy of each bank while creating powerful synergies to better serve the customers and communities of Chiba Prefecture and the greater Tokyo metropolitan area

• Mitsubishi UFJ Financial Group is in advanced talks to acquire a 20% stake in Shriram Finance Limited for ₹23,200 crore ($2.6 billion), potentially the largest FDI in an Indian NBFC; the investment would be via a primary issuance, with MUFG open to a larger stake over time. Shriram Finance, India’s second-largest NBFC, has ₹2.72 lakh crore AUM and a strong retail lending presence

• Sumitomo Mitsui Card takes controlling stake in V Point: Sumitomo Mitsui Financial Group, Sumitomo Mitsui Card Company, Culture Convenience Club, and CCCMK Holdings have reached an agreement regarding the capital restructuring of CCCMKHD, which operates "V Point"; Sumitomo Mitsui Card will acquire additional shares of CCCMKHD, making CCCMKHD a subsidiary of Sumitomo Mitsui Card; also, through CCCMKHD's acquisition of some of its treasury shares from CCC, the capital structure of CCCMKHD will change from the current "Sumitomo Mitsui Card 20%: Sumitomo Mitsui Financial Group 20%: CCC 60%" to "Sumitomo Mitsui Card 55%: Sumitomo Mitsui Financial Group 25%: CCC 20%"; this capital restructuring is scheduled to be executed by the end of March 2026; furthermore, CCCMKHD's company name will be changed to "V Point Marketing"

• The Bank of Japan has published a paper on the "Circulation Status of the New Series of Bank of Japan Notes", which were introduced in mid-2024

• Nomura's Head of Global Markets Rig Karkhanis provided an overview of the franchise, and its ambitions for 2030; we have also told the story in an audio overview

• Apollo Global Management has updated its "Outlook for Japan"

• The Financial Services Agency has published the latest edition of "Trends in High-Speed Trading"

• The Ministry of Finance has published its "JGB Newsletter September 2025"

• Sakana AI will partner with Daiwa Securities in its first alliance with a securities firm; this collaboration brings together Daiwa Securities Group’s deep industry knowledge with Sakana AI’s cutting-edge AI technology; Daiwa has long focused on a client-first approach to asset management, looking at a customer’s total financial picture; together, the two companies will use digital innovation to create groundbreaking new value; the partners will jointly build and roll out a “Total Asset Consulting Platform”; powered by Sakana AI’s own AI models, the platform is designed to maximize asset value for every client; the goal is to offer a new level of personalized, high-quality financial services to everyone, from new investors to high-net-worth individuals

• Japan’s largest bank is recruiting more new graduates and experienced specialists as it seeks a bigger piece of the country’s growing wealth management market; MUFG is planning to increase annual hiring to about 40 new graduates for its business catering to the rich from April next year, according to Yutaka Miyashita, head of the lender’s commercial banking and wealth management business group; that compares with around five hires a year recently

• Nomura is planning to grow its presence in Japan’s fast-growing digital asset market; its subsidiary, Laser Digital, is seeking regulatory approval to offer crypto trading services to institutional clients; CEO Jez Mohideen confirmed that Laser is in talks with the FSA, showing Nomura’s confidence in the country’s growing crypto ecosystem; Laser Digital, set up in 2022, provides services from asset management to venture capital; it already holds a full crypto license in Dubai; expanding into Japan would allow Laser Digital to offer broker-dealer services to traditional financial institutions and local crypto companies, including digital asset exchanges

• Gumi's ¥5.7 Billion bet on a blockchain future: gumi, a name long synonymous with Japan's vibrant mobile gaming industry, has signaled one of the most decisive strategic shifts in its history; the company last week announced a landmark capital raise of approximately ¥5.7 billion (roughly $38 million USD) through the issuance of stock acquisition rights; this is not, however, a typical funding round to bolster the gaming pipeline; instead, it represents a calculated, high-stakes concentration of capital into the volatile yet potentially lucrative world of blockchain technology and crypto assets; by directing the entirety of these funds toward repaying a crypto-related loan and dramatically expanding its holdings of Bitcoin and XRP, gumi is leveraging its stable gaming foundation to transform itself into a formidable player in the digital asset space; this move, executed in deep partnership with financial titan SBI Group, is a bold declaration of intent: the future of gumi, as its leadership sees it, is inextricably linked to blockchain; an in-depth analysis of the deal's structure, the strategic rationale, and the intricate relationship with its partners reveals a company undertaking a calculated gamble that could redefine its very identity

• The DCC's report on a fully on-chain settled, tokenized MMF in Japan: The Digital Asset Co-Creation Consortium (DCC) has unveiled a detailed blueprint for launching a fully on-chain settled, tokenized Money Market Fund (MMF), aiming to bridge Japan's established financial markets with the rapidly expanding global digital asset ecosystem; the report, authored by the DCC's "On-Chain Settled Security Token (ST) Working Group", provides a candid and exhaustive analysis of the opportunities and the significant legal hurdles involved in creating a Japanese equivalent to successful global products like BlackRock's BUIDL fund; the DCC, a 315-member organization spearheaded by digital asset platform provider Progmat, represents a formidable cross-section of Japan's financial and technology industries, including major banks, securities firms, asset managers, and tech consultants; their report signals a concerted effort by Japan's financial incumbents to move beyond nascent, retail-focused security tokens and build institutional-grade infrastructure for what it terms "on-chain finance"

The Seoul FinTech Week 2025 Conference took place on Monday, September 29, 2025, and was live streamed via YouTube. We summarize our key takeaways, as well as some of the insights gathered from the individual sessions in this post.

Top 10 Takeaways from Seoul FinTech Week 2025

1. AI is the Undisputed Core of Future Finance: The central theme of the conference, "FinTech Innovation Led by AI," was consistently reinforced. AI is no longer a niche technology but the fundamental driver of efficiency, personalization, and new business models across all financial sectors.

2. Data Sovereignty is Korea's Strategic Advantage: While Korea may lag in foundational AI model development, its unique strength lies in the vast, high-quality data held by its dominant domestic tech platforms (e.g., Naver, Kakao). This "data sovereignty" is a critical asset for developing competitive, localized AI financial services.

3. Seoul is Solidifying its Position as a Global FinTech Hub: The city has achieved its highest-ever ranking (8th globally in FinTech) through deliberate policy, investment in infrastructure like the Seoul FinTech Lab, and a focus on talent cultivation.

4. The Rise of "AI Agents" and "Agentic Enterprises": The vision for AI is moving beyond simple automation or generation. The future lies in autonomous AI agents that can perform complex, multi-step tasks, augmenting human employees and fundamentally changing how financial organizations operate.

5. Regulation is Shifting Towards "Responsible Innovation": Regulators like the Financial Supervisory Service (FSS) are moving from a prohibitive stance to creating enabling frameworks. Through sandboxes, unified guidelines, and risk-based approaches, the goal is to foster innovation while managing new risks.

6. Hyper-Personalization is Blurring the Lines Between Finance and Daily Life: Companies like Naver Pay are leveraging AI and vast data ecosystems to integrate financial services seamlessly into users' everyday activities, from house-hunting with natural language to managing health as an "asset."

7. Stablecoins and Digital Assets are the Next Major Frontier: There is a strong consensus that stablecoins will be pivotal for the future of payments, remittances, and the digital economy. Governments across Asia are actively developing legal frameworks to support and regulate their issuance.

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