Headlines this week belong to SMBC Group, which begins a new Medium-Term Plan with the fiscal year ending March 2027, the details of which will be published shortly. In the meantime, a Nikkei interview with SMFG President Toru Nakashima revealed some of the key targets for the group. MUFG's current MTP ends in March 2027, while Mizuho applies a rolling plan.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Financial AI agent 'Terminal X' sees 40x growth as DG Daiwa Ventures backs Series A; SMBC Group to acquire 10% stake in AI specialist ExaWizards to drive financial DX and product innovation; Japan Post Insurance takes minority stake in KKR-backed broker Hoken Minaoshi Hompo; ITFOR taps into inbound tourism boom with stake in WAmazing; AI-driven succession platform Micronity secures JPY 2.2bn seed round to modernize Japan’s software legacy; Cool Japan Fund bets USD 12m on InsurTech firm PolicyStreet to drive Southeast Asian demand for Japanese goods

• Insurance: InsurTech disruptor justInCaseTechnologies achieves 35% conversion boost with new AI sales recovery tool

• Banking: SMBC Group unveils decade-defining vision, pledges JPY 1trn tech blitz to chase 15% ROTE; Mizuho's new ‘Agent Factory’ aims to mass-produce AI agents, slashing development time by 70%; Mitsubishi breaks ground as first Japanese firm to adopt J.P. Morgan’s Kinexys blockchain for global treasury; SMBC to divest MANUBANK commercial unit to Bank of Hope to focus on investment banking

• Payments: Japan’s cashless transition surges to 58%, METI overhauls metrics to target 80% long-term goal; Sumitomo Mitsui Card takes controlling stake in rebranded V Point Marketing; DeCurret DCP, GMO Aozora Net Bank and ABeam Consulting enter the FSA FinTech Sandbox; DGFT targets cross-border growth, bridging Korean sellers and Japanese consumers via new payment alliance

• Capital Markets: Japan’s brokerage war - Rakuten lowers entry barriers, Webull eyes quant traders, and Woodstock cracks the onboarding code; Daiwa Securities Group unveils PoC results for quantum-resistant cryptography

• Digital Assets: Cryptact launches CLI for developers and AI agents

• The Last Word: The good old bank passbook will not die

Venture Capital & Private Markets

• Financial AI agent 'Terminal X' sees 40x growth as DG Daiwa Ventures backs Series A: Tokyo-based venture capital firm DG Daiwa Ventures (DGDV) has participated in a Series A investment for Project Pluto, a New York-based startup developing an advanced artificial intelligence agent tailored specifically for institutional investors; Project Pluto is the creator of "Terminal X," an AI Financial Agent designed to help asset managers, private equity firms, and investment banks navigate the massive amounts of unstructured data that dominate the financial industry

• SMBC Group to acquire 10% stake in AI specialist ExaWizards to drive financial DX and product innovation: SMBC Group has entered into a strategic capital and business alliance with ExaWizards, a prominent AI solution provider; under the terms of the agreement, SMFG will acquire a 10% voting stake in ExaWizards through a third-party allotment of shares; the deal, valued at approximately 5.395 billion yen (approx. $35.6 million USD), underscores a deepening trend of "mega-banks" integrating advanced artificial intelligence into their core operations to combat labor shortages and modernize customer services; SMFG will purchase 9,550,000 common shares of ExaWizards at a price of 565 yen per share; the transaction is scheduled for completion with a payment deadline of April 16, 2026; following the issuance, SMFG will become a significant shareholder in the AI firm

• Japan Post Insurance takes minority stake in KKR-backed broker Hoken Minaoshi Hompo: Japan Post Insurance has acquired a minority stake in Hoken Minaoshi Hompo Group (HMHG) with a view to bolster its distribution capabilities and deepen its relationship with global private equity; HMHG, a prominent Japanese insurance distributor, has been a portfolio company of KKR since its acquisition by the private equity giant in 2025; KKR will retain its position as the majority shareholder following this transaction

• ITFOR taps into inbound tourism boom with stake in WAmazing: ITFOR (TSE: 4743), a leading provider of credit screening and debt management systems, has completed an investment in WAmazing, a Tokyo-based startup specializing in inbound tourism and "Tax-Free as a Service" (TFaaS); the investment, executed through a third-party allotment of new shares, signals ITFOR’s intent to bridge the gap between high-tech tourism platforms and Japan’s regional economies

• AI-driven succession platform Micronity secures JPY 2.2bn seed round to modernize Japan’s software legacy: Micronity, a Tokyo-based startup specializing in an AI-driven "business succession platform," has raised 2.2 billion JPY (approximately $14.5 million USD) in a seed funding round; the capital injection, led by domestic venture capital firms including Mitsubishi UFJ Innovation Partners (MUIP) and various individual investors, aims to accelerate the company’s mission to preserve and revitalize Japan’s niche software industry through automation; founded in April 2025, Micronity has demonstrated explosive early growth, reporting an Annual Recurring Revenue (ARR) of 2.5 billion JPY within its first year of operation; to date, the company has already completed the acquisition and succession of five software firms

• Cool Japan Fund bets USD 12m on InsurTech firm PolicyStreet to drive Southeast Asian demand for Japanese goods: the Cool Japan Fund (CJF) has made an investment of up to $12 million in Polisea, the Singapore-based InsurTech firm behind the "PolicyStreet" platform; the move is designed to bolster the digital infrastructure supporting Japanese exports across Southeast Asia, with a primary focus on the Malaysian market; PolicyStreet, founded in 2016, has emerged as a regional leader by integrating "embedded insurance" directly into major e-commerce and automotive retail platforms; by partnering with over 40 insurance providers—including life, non-life, and Takaful (Islamic insurance) operators—the company allows consumers to purchase protection plans seamlessly at the point of sale

New Funds

• NSSK hits JPY 250bn hard cap for fourth Japan fund amid surging investor demand: Nippon Sangyo Suishin Kiko (NSSK) has successfully reached the final close of its Series IV Funds, hitting its hard cap of JPY 250 billion (approximately USD 1.7 billion); the fundraise underscores a significant appetite for Japanese private equity, with the vehicle finishing more than two times oversubscribed; the fundraising process was notably swift, reaching substantial allocation within just four months of its launch; according to the firm, the demand was driven by a diverse mix of global and domestic LPs, including sovereign wealth funds, pension funds, and family offices; Singapore-based Thrive Alternatives acted as the exclusive advisor for the raise

• Sumitomo Corporation accelerates venture strategy with new JPY 10bn fund: Sumitomo Corporation is doubling down on its domestic startup ecosystem with its venture capital arm, Sumisho Venture Partners (SVP), establishing a new ¥10 billion-scale fund and transitioning its Japanese corporate venture capital (CVC) activities to a dedicated fund-based structure; the new fund, which includes existing investments currently under management, is designed to modernize Sumitomo’s approach to the increasingly competitive Japanese venture landscape; by moving to a fund structure, SVP aims to extend its investment horizon to a medium-to-long-term perspective; more importantly, the firm signaled its intent to take a more aggressive role in the market, citing plans to increase investment amounts per deal and seek out "lead investor" status, which will allow for more active involvement in the management of portfolio companies

• Novastar Ventures hits USD 147m final close for third fund as Japanese capital backs African ClimateTech: Novastar Ventures, a prominent fixture in the African venture capital landscape, has completed the final close of its "Africa People and Planet Fund III" at $147 million; while the total falls short of the firm’s initial $200 million target—reflecting a broader global tightening in private equity and venture fundraising—the vehicle still represents a robust 40% expansion over its predecessor fund; since its inception in 2014, Novastar has grown its assets under management (AUM) to over $200 million; this latest capital injection signals a deepening of the firm’s commitment to climate-related and sustainable technologies, moving beyond its traditional strongholds in East and West Africa

Profile

• Z Venture Capital - Strategy of a JPY 185bn CVC: Z Venture Capital (ZVC), a corporate venture capital firm backed by LINE Yahoo, manages 185 billion yen across its funds and aims to support entrepreneurs with global ambitions; the firm recently launched a 30-billion-yen fund that targets startups at every stage, from seed to late-stage growth, within the IT and tech sectors; notably, ZVC can finalize small-scale seed investments of up to 30 million yen in as little as two weeks, providing exceptional speed for a corporate backer; beyond financial capital, the firm serves as a strategic bridge, offering portfolio companies unique access to the vast ecosystems of SoftBank, LINE, and Yahoo Japan; through initiatives like the Hive Shibuya coworking space and networking events, they foster a collaborative environment designed to help new platforms reach massive scale; their current investment focus has expanded to include cutting-edge fields like AI, robotics, and space technology on a global scale

Insurance

• Dai-ichi Life Holdings turns into Daiichi Life Group

• InsurTech disruptor justInCaseTechnologies achieves 35% conversion boost with new AI sales recovery tool: Tokyo-based InsurTech pioneer justInCaseTechnologies has launched its "joinsure AI Insurance Sales Enablement Series"; the new generative AI-powered suite is designed specifically to tackle the industry's most persistent challenge: high customer drop-off rates during the digital application process; the new solution has already delivered a significant impact during its pilot phase; working with early adopters Kansai Electric Power and UCS, the company reported conversion rate (CVR) increases of up to 35% compared to pre-implementation levels

Banking

• SMBC Group unveils decade-defining vision, pledges JPY 1trn tech blitz to chase 15% ROTE: Sumitomo Mitsui Financial Group (SMBC Group) has signaled a bold acceleration in its trajectory, unveiling a new corporate vision and a high-stakes three-year management plan aimed at catapulting the Japanese megabank into the top tier of global financial institutions; at the heart of the new Medium-Term Management Plan is an ambitious profitability target; SMBC Group is aiming for a Return on Tangible Equity (ROTE) of approximately 15%; this target is a clear shot across the bow of its international peers, as the group seeks to align its capital efficiency with the major financial powerhouses of the U.S. and Europe

• Mizuho's new ‘Agent Factory’ aims to mass-produce AI agents, slashing development time by 70%: Mizuho Financial Group has launched its "Agent Factory," a strategic initiative designed to transition the bank from the experimental phase of AI creation to a high-speed, industrial-scale production model; by standardizing the development and deployment of autonomous AI agents, Mizuho aims to reduce development cycles from weeks to just a few days, targeting the eventual deployment of thousands of agents across the group

• Mitsubishi breaks ground as first Japanese firm to adopt J.P. Morgan’s Kinexys blockchain for global treasury: Mitsubishi Corporation has become the first major firm in the country to integrate J.P. Morgan’s Kinexys Digital Payments into its global treasury operations; the move marks a pivotal shift toward blockchain-based cash management, allowing the conglomerate to manage intragroup U.S. dollar liquidity with unprecedented speed and automation; the implementation centers on the use of Blockchain Deposit Accounts across Mitsubishi’s primary financial hubs in New York, London, and Singapore; by utilizing "Programmable Payments"—a system governed by "if-this-then-that" logic—the company can now automate fund transfers between subsidiaries; crucially, these transactions operate on-chain 24/7, bypassing the traditional constraints of banking holidays and regional cut-off times

• SMBC to divest MANUBANK commercial unit to Bank of Hope to focus on investment banking: SMBC Group has reached a definitive agreement to sell the commercial banking business of its California-based subsidiary, SMBC MANUBANK, to Bank of Hope; the move marks a significant shift for the Japanese megabank as it narrows its focus within the Americas; the transaction involves the transfer of the principal assets, liabilities, and customer relationships of MANUBANK’s commercial unit to Los Angeles-based Bank of Hope; financial terms of the deal were not disclosed, though SMBC confirmed the divestiture will not impact its consolidated earnings forecast for the fiscal year ending March 2026

Payments

• Japan’s cashless transition surges to 58%, METI overhauls metrics to target 80% long-term goal: Japan’s march toward a cashless society reached a significant milestone in 2025, with the Ministry of Economy, Trade and Industry (METI) reporting that cashless payments now account for 58.0% of total consumer spending; total transaction value hit a record 162.7 trillion yen, fueled by a diversifying landscape of digital payment methods and a robust post-pandemic shift in consumer behavior

• Sumitomo Mitsui Card takes controlling stake in rebranded V Point Marketing: SMBC Group and its subsidiary, Sumitomo Mitsui Card Company (SMCC), have officially completed the consolidation of V Point Marketing, taking control of one of the leading players in Japan’s competitive loyalty program and data marketing landscape; the move follows a strategic agreement first announced in October 2025; effective March 31, 2026, SMCC increased its stake in the entity formerly known as CCCMK Holdings, transitioning it into a consolidated subsidiary; to mark the new era of ownership, the entity was rebranded as V Point Marketing as of April 1, 2026

• As the 14th project overall for the FSA's FinTech Hub since 2017, DeCurret DCP, GMO Aozora Net Bank and ABeam Consulting will verify the practical utility and feasibility of interbank settlements associated with remittances using tokenized deposits between customers of different banks; they will test methods using interbank deposit accounts and methods using stablecoins, while also organizing relevant legal points; the experiment will run from April 2026 until further notice

• DGFT targets cross-border growth, bridging Korean sellers and Japanese consumers via new payment alliance: DG Financial Technology (DGFT) has officially launched a strategic initiative to bolster South Korean cross-border e-commerce (EC) by providing critical payment infrastructure for merchants targeting the Japanese market; through a partnership with Eximbay, a leading South Korean global payment service provider, DGFT will now offer PayPay’s online payment services to merchants utilizing the "Cafe24" e-commerce platform

Economics

• In their latest monthly "Capital Markets Strategy", MUFG analyst report that the market sees a slightly higher probability of multiple rate hikes as of March 31, compared with the pre-war February 27 reading; however, the 9 bps differential is significantly smaller than the impact on the Fed forecast, which has changed by 54 bps

• IMF Executive Board concludes 2026 Article IV Consultation with Japan: the Japanese economy has displayed impressive resilience in the face of global shocks and output is growing above potential; domestic demand has been robust and unemployment remains low; after three decades of near-zero inflation, prices grew faster than the BOJ’s target for over three and a half years before moderating in January; while nominal wages are rising at a historic pace, there are persistent concerns about the cost of living as high inflation erodes household purchasing power

Capital Markets

• In the Equity Capital Markets (ECM) league table for the past fiscal year, Wall Street banks have gained a bigger share of Japan offerings, according to Bloomberg, making up half of the top ten players

• Japan’s brokerage war - Rakuten lowers entry barriers, Webull eyes quant traders, and Woodstock cracks the onboarding code: the Japanese brokerage landscape is facing ever tighter competition this spring as major players and nimble FinTechs roll out new features aimed at capturing a broader range of retail and sophisticated investors; from lowering the cost of entry for ETFs to leveraging government digital ID infrastructure for lightning-fast onboarding, here is the latest from the front lines of the industry

• Daiwa Securities Group unveils PoC results for quantum-resistant cryptography: Daiwa Securities Group, in collaboration with several industry heavyweights, has announced the successful completion of a Proof of Concept (PoC) for Post-Quantum Cryptography (PQC) within its online services; the initiative—a joint effort between Daiwa Securities, Daiwa Institute of Research (DIR), NEC Corporation, F5 Networks Japan, and DigiCert Japan—aims to bolster the security of internet communications against the eventual capability of quantum computers to crack traditional public-key encryption

• Smartstream identifies a "Governance Gap: Mitigating the Operational Risk of 'Manual Pockets' in Japan's Post-Trade Landscape"

Green Finance

• GSG Impact has published "Current State and Challenges of Impact Investing in Japan": this report presents the current state and challenges of impact investing in Japan with the purpose of sharing information effectively for promoting it; the project has been published under the supervision of the GSG Impact JAPAN National Partner every year since 2016; based on the questionnaire survey results, the main part of the report illustrates the investment balance (i.e., assets under management (AUM)) and where investments have been made in Japanʼs impact investing market, along with organizationsʼ efforts and how the issues are perceived; this report also presents domestic and international trends in impact investing identified in desk research

• The Sustainability Standards Board of Japan has published the latest version of the “Comparison between SSBJ Standards and ISSB Standards”

• A recently published research paper evaluates "Strategic imperatives: green bond integration and digital economic infrastructure for Japan's energy transition"

Digital Assets

• Cryptact launches CLI for developers and AI agents: pafin Inc. has released a command-line interface (CLI) for cryptact, its industry-leading crypto tax platform; the tool is designed to integrate cryptact’s profit-and-loss calculation engine directly into developer environments and automated AI workflows

The Last Word: The good old bank passbook will not die

Shohei Ohtani has signed on as a brand ambassador for Japan Post Bank. My mother-in-law is crushed - she claims that every third TV commercial already features Ohtani, and even for the most die-hard fan, that is too much of a good thing.

But give the guy a break. He will not see any of the Dodgers money until the end of his contract (saving him $$$ in state taxes as a non-resident at that time), so one has to get some cash flow to pay for that private jet, etc.

However, seriously, all the Japan Post Bank marketing department could come up with is to show Ohtani with a passbook? As a legal document in Japan, it requires the bank to pay an annual stamp duty (200 yen if I am not mistaken), so most institutions are trying to wean their customers off it, not advertise it further in a multi-million branding deal.

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With the Japanese fiscal year coming to an end, we wish everyone who is taking up new responsibilities, or joining a new company on April 1, all the best for the next stage of their careers!

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Startale Group secures USD 63m Series A as Sony and SBI Group signal strong support for web3 infrastructure; GMO Venture Partners joins USD 20m Series B round for Indian InsurTech leader Plum; SoftBank secures massive USD 40bn bridge facility to fuel aggressive OpenAI expansion; SBI Ventures Europe and Speedinvest forge 50/50 joint venture to bridge Japanese and European startup ecosystems

• Insurance: Berkshire Hathaway subsidiary NICO takes strategic stake in Tokio Marine in major reinsurance and M&A alliance; Japan’s insurance crackdown - mega-agencies face new compliance hammer in 2026

• Banking: the formation of Chiba Financial Group; banking on the "Golden Route" - Shizuoka Financial Group and Bank of Nagoya unveil JPY 22trn integration plan; Nanto Bank taps IBM and Money Forward X to bridge the gap between accounting and banking

• Payments: OKI and Hitachi to integrate ATM businesses

• Capital Markets: the Financial Times reported that a full takeover of Jefferies by SMBC Group is in the works; Okasan Securities throws in the towel, transfers online business to SBI Securities; Daiwa Connect and GMO Aozora Net Bank launch joint initiative for corporate banking and workplace investing

• Asset Management: MUFG to merge eSmart Securities and WealthNavi in bold move to dominate AI-native Wealth Management

• Digital Assets: BITPOINT forms quad-party alliance to integrate DVT for institutional Ethereum staking

• The Last Word: Tokyo Returns into the Top Ten Global Financial Centers

Venture Capital & Private Markets

• Startale Group secures USD 63m Series A as Sony and SBI Group signal strong support for web3 infrastructure: Startale Group has successfully closed its Series A funding round, raising a total of $63 million to accelerate the development of its vertically integrated blockchain ecosystem; the final tally was reached following a significant $50 million second-close investment from the Japanese financial titan SBI Group, complementing an initial $13 million injection from the Sony Innovation Fund earlier this year; the capital infusion indicates strong support for the Singapore-based firm as it seeks to bridge the gap between traditional finance and the onchain economy; Startale, led by CEO Sota Watanabe, intends to use the funds to build out a comprehensive technology stack that spans Ethereum Layer 2 networks, stablecoin issuance, and consumer-facing applications

• GMO Venture Partners joins USD 20m Series B round for Indian InsurTech leader Plum: Plum, the Bengaluru-based health insurance and employee benefits platform, has successfully secured $20 million (approximately ₹193 crore) in a Series B funding round; while the round was led by Peak XV Partners, a significant highlight of this latest capital injection is the participation of GMO Venture Partners, who joins the company's cap table as a new strategic investor; existing backer Tanglin Venture Partners also participated in the round, which follows Plum’s transition into a period of sustained financial health; the company recently reported EBITDA and cash flow profitability for the full fiscal year 2025, recording revenues in the neighborhood of ₹700 million

• SoftBank secures massive USD 40bn bridge facility to fuel aggressive OpenAI expansion: SoftBank Group has signaled a return to its high-octane investment roots, having secured a staggering $40 billion bridge loan to bankroll its deepening partnership with ChatGPT-maker OpenAI; the unsecured facility, which matures in March 2027, represents a significant escalation in Chairman Masayoshi Son’s quest to dominate the generative AI landscape; the loan was arranged through a syndicate of top-tier global lenders, including JPMorgan Chase, Goldman Sachs, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and MUFG Bank; according to company filings, the primary driver for the capital raise is a $30 billion follow-on investment in OpenAI via SoftBank’s Vision Fund 2; this move solidifies SBG’s position as a cornerstone backer of the AI pioneer, which remains at the center of a global arms race for large language model supremacy

New Funds

• SBI Ventures Europe and Speedinvest forge 50/50 joint venture to bridge Japanese and European startup ecosystems: SBI Holdings and Vienna-based venture capital firm Speedinvest GmbH have established a strategic partnership and a new 50/50 joint venture (JV) with a view to deepen capital ties between Asia and Europe; the joint venture, formed specifically between Speedinvest and SBI’s wholly owned subsidiary, SBI Ventures Europe, is designed to serve as a high-velocity bridge for cross-border investment; by combining SBI Group’s global financial network with Speedinvest’s specialized pan-European platform, the two firms aim to streamline capital flows between Japan and Europe’s burgeoning tech sectors

Insurance

• Berkshire Hathaway subsidiary NICO takes strategic stake in Tokio Marine in major reinsurance and M&A alliance: Tokio Marine Holdings announced a comprehensive strategic partnership with National Indemnity Company (NICO), the core reinsurance arm of Berkshire Hathaway, allowing Warren Buffett to significantly expand his footprint in the Japanese financial sector; the alliance centers on a multi-billion dollar equity investment, a deep integration of reinsurance operations, and a commitment to joint global M&A ventures; under the terms of the agreement, NICO will acquire a 2.49% ownership stake in Tokio Marine through a third-party allotment of 48,207,200 treasury shares; the shares are priced at 5,962 yen each, representing a total transaction value of approximately 287.4 billion yen ($1.9 billion USD)

• Japan’s insurance crackdown - mega-agencies face new compliance hammer in 2026: the regulatory fog surrounding Japan’s insurance sector is finally clearing, and for the nation’s largest multi-agent players, the forecast is heavy oversight; following a series of structural scandals that rocked the non-life insurance industry, the Financial Services Agency has unveiled a sweeping set of amendments to the Insurance Business Act and its accompanying Cabinet Office Ordinances; the message is clear: the era of "self-regulation" for large-scale agencies is over; we offer a breakdown of the new regulatory landscape, scheduled to take full effect on June 1, 2026

Banking

• The formation of Chiba Financial Group: in September 2025, The Chiba Bank and The Chiba Kogyo Bank have jointly declared their resolution to pursue a management consolidation; formalized at the time through the signing of a Memorandum of Understanding, the move aims to establish a new bank holding company that will serve as the wholly-owning parent of both institutions; to that extent, the Consolidation Agreement has been executed this past week; 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

• Banking on the "Golden Route" - Shizuoka Financial Group and Bank of Nagoya unveil JPY 22trn integration plan: Shizuoka Financial Group and The Bank of Nagoya have signed a Memorandum of Understanding to pursue a full-scale business integration; the deal, which aims to create a "top-tier" regional powerhouse, is structured as a share exchange that would see Shizuoka FG become the wholly-owning parent company of The Bank of Nagoya; if approved by shareholders and regulators, the integration is scheduled to take effect on April 1, 2028

• Nanto Bank taps IBM and Money Forward X to bridge the gap between accounting and banking: following the recent announcement to engage with Infcurion in the face of the 2027 promissory note phase-out, Nara-based Nanto Bank continues to push forward the modernization of its banking stack by entering into a three-way collaboration with Money Forward X and IBM Japan to develop an integrated digital platform for corporate clients; the "Integrated Digital Channel," scheduled for launch in Autumn 2027, aims to unify accounting workflows with financial transactions into a single, seamless ecosystem

• Midori Yamaguchi writes about "Preventive Debt Restructuring in Japan", published in the March issue of "The Diiigest", a publication of the International Insolvency Institute

Payments

• OKI and Hitachi to integrate ATM businesses: in a move to consolidate their footprint in the financial hardware market, Oki Electric Industry (OKI) and Hitachi have entered a definitive agreement to integrate their automated teller machine (ATM) and automated equipment businesses; the deal, structured as a joint venture, aims to combat the headwinds of a global shift toward cashless payments while leveraging new opportunities in digital banking infrastructure; under the terms of the "Integration Agreement," OKI will transfer its development and production arms for automated equipment to Hitachi Channel Solutions (HCS), a wholly owned subsidiary of Hitachi; following an absorption-type split, OKI will acquire a controlling interest in the entity; the resulting joint venture will be owned 60% by OKI and 40% by Hitachi

• Alongside the MoneyX conference, Coinpost and collaborators have published "Japan's Stablecoin Vision: Building the next financial infrastructure"

Economics

• "Sanaenomics" meets geopolitical strife - why Japanese yields are bracing for a steep climb: the Japanese bond market is entering a period of renewed volatility as a "perfect storm" of domestic policy shifts and Middle Eastern geopolitical tensions pushes interest rates toward new highs; according to a fresh analysis from Sony Financial Group, the era of low rates is facing its most significant challenge yet, with the 10-year JGB yield recently breaching the 2.3% mark

• The Bank of Japan has published "Changes in Perceptions about Monetary Policy: Estimating the Policy Reaction Function Using Market Survey Data": the authors of this Bank of Japan Working Paper estimate the policy reaction function of monetary policy as perceived by Japan's market participants, using market survey data; their results suggest that the perceptions of monetary policy among private agents are state-dependent, and that the macroeconomic stability and the effectiveness of monetary policy may vary over time

• BOJ IMES has published "Decomposing Loan Rate Dispersion in the Interbank Market": using transaction-level data, the authors documented dispersion in uncollateralized overnight loan rates even during periods of low interest rates in Japan

• Alexis Stenfors has published "Navigating the Japanese Markets with TONA Futures": this paper examines the interaction between Japan’s monetary policy normalization and geopolitical uncertainty through the lens of Tokyo Overnight Average (TONA)-indexed instruments

• In their "Weekly Market View" for March 27, Standard Chartered analysts evaluate "How might Japan's "Shunto" spring wage negotiation results and inflation affect the Bank of Japan's rate path, the JPY, and Japan equities?" (see chart below)

Capital Markets

• The Financial Times reported that a full takeover of Jefferies by SMBC Group is in the works; our last reporting on the matter covered SMBC Group and Jefferies launching a Wholesale Japanese Equities Joint Venture; Jefferies reported mildly disappointing results for its fiscal first quarter (ending in February) last week, and is currently under investigation by the German financial regulator for its role in Unicredit's attempt to take over Commerzbank, so SMBC's timing might just be right

• Okasan Securities throws in the towel, transfers online business to SBI Securities: SBI Securities and Okasan Securities have entered into an absorption-type split agreement; under the terms of the deal, Okasan Securities will transfer a significant portion of its "Okasan Online" business to SBI Securities, the industry leader; the transfer, scheduled to take effect on October 13, 2026, marks a deepening of the existing partnership between the SBI and Okasan groups, who have previously collaborated in the asset management sector

• Daiwa Connect and GMO Aozora Net Bank launch joint initiative for corporate banking and workplace investing: Daiwa Connect Securities and GMO Aozora Net Bank have entered into a partnership to cross-promote corporate accounts and "Workplace NISA" services; the collaboration aims to realize synergies between two major FinTech players: Daiwa Connect, a smartphone-native brokerage under the Daiwa Securities Group umbrella, and GMO Aozora Net Bank, a digital bank known for its "Technology Bank" positioning and a corporate client base exceeding 200,000 accounts

• Japan Exchange Group has published the "Status of Efforts to Lower Investment Units": following the publication of the “Report on the Study Group on Small-Size Investments” (April 2025), the Tokyo Stock Exchange has been steadily implementing various initiatives outlined in the report as part of its action plan; going forward, TSE will continue to update these initiatives based on feedback from listed companies and investors

Asset Management

• The latest Bank of Japan Flow of Funds Survey, for the period ending December 31, 2025, shows household assets increasing to JPY 2,351 trillion, of which 48.5% are being held as currency and deposits - please update your pitch deck to capture the "tansu yokin" and move them into more productive investments accordingly

• MUFG to merge eSmart Securities and WealthNavi in bold move to dominate AI-native Wealth Management: MUFG has announced a major strategic overhaul of its retail financial services, centered on the launch of a new digital-first entity created through the merger of Mitsubishi UFJ eSmart Securities and robo-advisor pioneer WealthNavi; the move marks the next phase of MUFG’s "Emutto" brand strategy; the Japanese banking giant aims to create a seamless, "AI-native" ecosystem that integrates banking and asset management to capture a broader share of the digital-savvy retail market

• Nature-positive investment - a strategic implementation framework for asset owners: a recently published report by Pensions for Purpose in collaboration with MUFG First Sentier investigates how global asset owners are integrating nature and biodiversity into their investment processes; while the financial sector has historically focused on climate change, this research highlights a growing shift toward recognizing biological loss as a systemic financial risk; based on interviews with twenty institutional investors, the text outlines the adoption of frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) to map dependencies and impacts

Digital Assets

• BITPOINT forms quad-party alliance to integrate DVT for institutional Ethereum staking: BITPOINT Japan, a subsidiary of the SBI Group, has entered into a landmark four-party strategic partnership to integrate Distributed Validator Technology (DVT) into its Ethereum management infrastructure for corporate clients; the alliance sees SSV Labs, the developers of the world’s largest DVT protocol "SSV Network," joining an existing collaboration between BITPOINT, IT consulting firm Def consulting, and staking infrastructure provider P2P.org; the partnership centers on the "Ethereum Treasury Strategy" spearheaded by Def consulting; under this framework, Def consulting incorporates Ethereum (ETH) into its balance sheet to enhance long-term corporate value; while BITPOINT provides the trading and storage foundation and P2P.org manages validator operations, the addition of SSV Labs introduces a layer of decentralization previously unavailable to the Japanese corporate market

• Samsung Securities has covered Hyperithm, a premier digital asset manager based in Tokyo and Seoul, which is active in quant trading and venture investments, in a dedicated report

The Last Word: Tokyo Returns into the Top Ten Global Financial Centers

The latest release of the Global Financial Centres Index (GFCI 39) has sent a clear signal to the markets: Tokyo is back in the elite circle. Tokyo has surged five places to reclaim its position in the world’s top 10, officially landing at 10th place globally.

This comeback comes at the expense of American heavyweights Chicago and Los Angeles, both of which were pushed out of the top tier by the Japanese capital and a rising Dubai. While the overall index saw a general cooling of ratings across nearly all jurisdictions—with Tokyo’s own rating slipping by 5 points to 739—its relative competitiveness has outpaced its peers.

Tokyo’s return to form is anchored by its powerhouse performance in core industry sectors. The city is now ranked 4th in the world for both Banking and Trading, trailing only the "Big Three" (New York, London, and Hong Kong/Singapore). It also holds strong top-10 positions in Professional Services and Government & Regulatory sub-indices.

Market analysts point to Tokyo’s "Reputational Advantage" as a key driver of this ascent. With a reputational score of 798 against its quantitative rating of 739, the city enjoys a "reputational advantage" of 59 points, suggesting that international professionals view the city more favorably than the raw data alone might indicate. Furthermore, in an era of heightened geopolitical volatility, Tokyo is categorized in the report as a "Stable Centre," characterized by low sensitivity to instrumental factor changes and consistent assessment scores.

Looking ahead, the outlook for the Japanese capital remains bullish. Tokyo appears on the "Future Prospects" shortlist of centers likely to become more significant over the next three years, and its FinTech sector is also on the move, climbing three spots to rank 15th globally.

As the Asia/Pacific region continues to consolidate its influence—now boasting six of the world’s top 10 hubs—Tokyo’s resurgence proves that the old guard of the East still has the momentum to challenge the global status quo.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

This edition also marks our three year anniversary, 156 weeks of uninterrupted service! Thank you for spending your time with us 🙏 That was fun, let's do it all over again 💪

No snarky comments this week due to the celebratory mood, although a pat-standing BOJ, the Takaichi/Trump summit, and some folks sweeping Epstein involvement in Japan under the carpet (yes, you there, with the chain that has just been rebranded) provide ample opportunity - I will try hard to restrain myself.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Kyoto University’s venture arm launches JPY 20 Billion Fund III to scale deep-tech "patient capital"; Tokyo FinTech firm "Funds" debuts in South Korea with Baree Mobility Investment launch; Mitsubishi UFJ Capital, Mizuho Capital, and SMBC Venture Capital participate in Orbital Lasers' Series A; JAFCO Asia rebrands as JIF Capital, signaling new era of independence in pan-asian venture capital

• Banking: Money Forward charges Into 2026 with strategic acquisitions and aggressive AI deployment; inside MUFG’s blueprint for enterprise AI-driven development; transitioning to AI-driven financial intelligence with Snowflake and QUICK; NCR Voyix divests Japanese banking unit to NTT DATA in pivot toward Retail and Restaurant Tech

• Payments: transitioning to Japan’s new real-time payment architecture; SBI VC Trade breaks new ground with Japan’s first licensed USDC lending service; Digital Garage Group to launch hybrid payment solution aimed at solving the "subscription friction" dilemma; Infcurion bolsters B2B payment ecosystem via strategic alliance with Credit Saison; PayPay and SMBC Group launch mutual point exchange

• Capital Markets: Woodstock has been featured in The Japan Times

• Asset Management: can low-cost giants become true ‘flagship’ funds

• Digital Assets: SBI and Megabanks successfully test regulated, KYC-compliant liquidity pools

• The Last Word: Regional Growth

Venture Capital & Private Markets

• Kyoto University’s venture arm launches JPY 20 Billion Fund III to scale deep-tech "patient capital": Kyoto University Innovation Capital (Kyoto iCAP) has established its third flagship investment vehicle, the Innovation Kyoto 2026 Investment Limited Partnership (KYOTO-iCAP Fund III); managed by Kyoto iCAP as the general partner under the leadership of Representative Director Ko Kusumi, the new fund scales the university’s commitment to commercializing high-level academic research; with a target committed capital of JPY 20 billion, the fund follows the successful deployment of Fund I (2016) and Fund II (2021); Bank of Kyoto, The Senshu Ikeda Bank, Sumitomo Mitsui Trust Bank, and Nippon Life Insurance Company are among the LPs

• Tokyo FinTech firm "Funds" debuts in South Korea with Baree Mobility Investment launch: Funds Inc., the operator of the fixed-yield investment platform "Funds," has launched its first South Korean-linked vehicle: the Baree Mobility EC Fund No. 1; this marks a significant milestone for the Tokyo-based FinTech firm as it accelerates its push to become a premier global platform for growth-stage investment and financing; the borrower for this inaugural Korean fund is Baree Inc., a Seoul-based mobility-tech company that operates "REITWAGEN," a specialized e-commerce and financial solutions platform for the motorcycle industry

• Mitsubishi UFJ Capital, Mizuho Capital, and SMBC Venture Capital participate in Orbital Lasers' Series A: Orbital Lasers, a rising Japanese powerhouse in space optics, has successfully raised 3.02 billion yen (approx. 20 million USD) in a Series A funding round; the capital was raised through a combination of third-party allotment of shares and J-KISS stock acquisition rights; this latest infusion brings the company’s total cumulative equity funding to 3.92 billion yen, marking a significant milestone for the startup, which spun out from satellite giant SKY Perfect JSAT just over two years ago, in January 2024

• JAFCO Asia rebrands as JIF Capital, signaling new era of independence in pan-asian venture capital: JAFCO Investment (Asia Pacific), a long-standing fixture in the regional private equity landscape, has officially rebranded as JIF Capital; the move marks the firm's formal transition into an independent venture and growth investment platform following its acquisition by Bee Alternatives Management; while the name is new, the firm’s leadership is signaling a "business as usual" approach for its limited partners and portfolio companies; headquartered in Singapore, JIF Capital confirmed that its internal regional structure, country leadership, and investment philosophy will remain unchanged

Banking

• Money Forward charges Into 2026 with strategic acquisitions and aggressive AI deployment: Money Forward is demonstrating a dual-pronged strategy in the face of challenging software company valuations: an aggressive horizontal expansion into the enterprise market via strategic acquisitions paired with a deep, vertical integration of AI agents to revolutionize both its internal development and its client-facing product suite; by consolidating its hold on back-office operations while simultaneously "dogfooding" cutting-edge AI coding tools, Money Forward is positioning itself as an AI-native ecosystem designed to navigate the increasingly complex regulatory and operational demands of the Japanese business world

• Inside MUFG’s blueprint for enterprise AI-driven development: in the hyper-competitive theater of global finance, the traditional software development lifecycle is undergoing a brutal reassessment; for years, the industry relied on "human-wave tactics"—vast cohorts of software engineers engaged in the linear translation of requirements into syntax; today, Mitsubishi UFJ Information Technology (MUIT), the digital engine room for the MUFG group, views this model as a legacy liability; to remain relevant in a digitized market, MUIT is spearheading a transition toward "AI-Driven Development"; this is a fundamental shift in capital allocation, moving away from manual OpEx toward the orchestration of high-leverage AI coding agents

• Transitioning to AI-driven financial intelligence with Snowflake and QUICK: legacy data fragmentation is a strategic liability that imposes an "intelligence tax" on every executive decision; in the current financial landscape, the volume of data has scaled beyond human cognitive limits, rendering traditional "data hoarding" obsolete; to maintain a competitive edge, organizations must pivot to a model of "active intelligence," where data is not a static archival asset but a dynamic catalyst for immediate, high-stakes action; the objective is the realization of a unified intelligence environment—a frictionless ecosystem where the historical boundaries between structured market data and unstructured global sentiment are eradicated; by collapsing the distance between raw data ingestion and executive insight, firms can transform their decision-making from a reactive posture to a proactive, predictive one; this roadmap serves as the definitive blueprint for navigating this transition, utilizing the Snowflake and QUICK partnership - as discussed in a recent webinar hosted by the companies - to move from months of speculative engineering to minutes of verified insight

• NCR Voyix divests Japanese banking unit to NTT DATA in pivot toward Retail and Restaurant Tech: NCR Voyix has reached a definitive agreement to sell its Japanese bank technology solutions business to Tokyo-based IT giant NTT DATA, further streamlining its global portfolio; the transaction, which includes the operations of NCR Commerce Japan, is expected to close by the end of 2026; while financial terms were not immediately disclosed, the divestiture marks a significant step in NCR Voyix’s ongoing effort to shed non-core assets and sharpen its focus on its primary retail and restaurant software segments; the Japanese unit being offloaded provides mission-critical infrastructure to financial institutions, including specialized solutions for foreign exchange, lending, video tellers, and network management; under the terms of the deal, NTT DATA—a $30 billion leader in global technology services—will integrate these specialized services into its own expansive financial IT portfolio

Payments

• Transitioning to Japan’s new real-time payment architecture: the global financial landscape is currently undergoing a foundational transition toward Fast Payment Systems (FPS) that operate 24/7/365 with near-instantaneous settlement; in this environment, modernizing payment infrastructure is a prerequisite for maintaining national economic competitiveness; as international trade and digital services accelerate, the ability to move liquidity across borders and between institutions with speed and data transparency has become the baseline for the modern economy; for Japan, the transition to a New Settlement System (NSS) is critical to ensuring that its domestic financial ecosystem can interface seamlessly with an increasingly integrated global market; since its second generation, the Zengin System has been updated every eight years; this implied the eighth generation was scheduled for November 2027, and the ninth generation for 2035. However, towards the end of 2024 the eighth generation had been postponed until 2028, and the discussions since have now led to the concept of a "New Settlement System (NSS)" to be implemented by 2030

• SBI VC Trade breaks new ground with Japan’s first licensed USDC lending service: SBI VC Trade has launched Japan’s first licensed stablecoin lending service, marking a significant milestone in the integration of US dollar-pegged digital assets into the Japanese regulated financial ecosystem; to celebrate the launch, the firm is offering an aggressive introductory annual yield of 10% for a 12-week term; following the initial campaign, SBI VC Trade expects to maintain a standard annual yield of approximately 5%, a figure that comfortably outpaces traditional US dollar denominated fixed-term deposits currently offered by domestic banks

• Digital Garage Group to launch hybrid payment solution aimed at solving the "subscription friction" dilemma: DG Financial Technology (DGFT) and its subsidiary SCORE have announced the upcoming launch of "Score Atokara Card" to optimize the burgeoning subscription-based e-commerce market; scheduled for a June 2026 rollout, the service aims to bridge the gap between high-conversion "Buy Now, Pay Later" (BNPL) methods and the high lifetime value (LTV) associated with credit card payments

• Infcurion bolsters B2B payment ecosystem via strategic alliance with Credit Saison: Tokyo-based FinTech leader Infcurion has announced a significant expansion of its “Winvoice” platform by entering into a strategic partnership with Credit Saison, one of Japan’s largest credit card issuers, to integrate American Express brand cards into its service ecosystem; users of Infcurion’s "Winvoice" platform can now utilize American Express cards issued by Credit Saison for invoice settlements; this integration is a direct response to growing market demand for diversified payment options within the business-to-business sector; by broadening its brand portfolio, Infcurion aims to enhance user convenience and sharpen its competitive edge in the high-growth B2B transaction market

• PayPay and SMBC Group launch mutual point exchange: PayPay Corporation, Sumitomo Mitsui Card (SMCC), and CCCMK Holdings announced the launch of a mutual point-exchange program; users will be able to convert "PayPay Points" and "V Points" at a 1:1 ratio, effectively bridging two of the country’s largest consumer ecosystems in a move set to reshape the competitive landscape of Japan’s digital loyalty and payment sectors

• How AI and stablecoins are rewiring global finance: the global financial landscape is undergoing a rigorous restructuring as stablecoins evolve from speculative "safe havens" for crypto-traders into the standardized settlement layer for the real-world economy; as we have progressed through the 2024–2025 cycle, these assets are being integrated into core economic infrastructure, shifting the focus from retail volatility to institutional capital efficiency and cross-border settlement; this post serves as an event report for a webinar hosted by Fracton Ventures and SurfAI

Economics

• Bank of Japan March 2026 Monetary Policy Meeting: the Bank of Japan’s March Monetary Policy Meeting took place against a backdrop of heightened market volatility, and the proceedings underscored the increasing tension between the "look-through" approach to temporary price shocks and the mounting fear of being caught behind the curve as external geopolitical pressures mount; in an 8-1 majority vote, the Policy Board voted to maintain the uncollateralized overnight call rate at approximately 0.75%; also, here is the official "Statement on Monetary Policy"

• Middle East tensions pose new threat to real wages: rapidly escalating tensions in the Middle East are sending shockwaves through global energy markets, raising a critical question for Japan's macroeconomic trajectory; according to a new report from the Itochu Research Institute, if West Texas Intermediate (WTI) crude stubbornly remains near the $100-per-barrel mark, Japanese consumers will face a steep penalty at the pump; the surge could push retail gasoline prices up by nearly 30 yen per liter, applying a direct 0.5% upward pressure on the nation’s Consumer Price Index (CPI); however, Tokyo is stepping in to soften the blow; the government’s move to reinstate gasoline subsidies is projected to suppress this inflationary spike by roughly 0.2 percentage points; provided the geopolitical premium on oil dissipates by the second half of the year, Itochu maintains its forecast that Japan’s real wages will remain in positive territory for 2026; but if oil prices remain higher for longer, the risk of real wages plunging back into the red—and dragging the broader economy down with them—rises significantly

• Brookings' Mireya Solís comments on "Late-breaking shocks and shifting goalposts: Takaichi's highwire Washington visit"

• Oil Risk and Summit Stakes: Moody's Global Economy Unwrapped sits down with David Boling, Principal at The Asia Group, to unpack what Japan is walking into as Prime Minister Takaichi heads to Washington and conflict in the Middle East rattles energy markets; oil supply chains are under strain, the yen wobbles, and U.S. President Donald Trump shows no sign of easing his tariff instincts; Japan clearly has its work cut out; can Tokyo still lean on old alliances and familiar playbooks in a world that feels more fractured and transactional; Boling walks through the risks and what Japan needs to get right

• CaixaBank sees Japan at the dawn of a new cycle

Capital Markets

• Woodstock has been featured in The Japan Times: Tokyo startup betting free trades and small lots will draw young investors; Woodstock recently introduced a zero-fee, around-the-clock U.S. equity trading service; while Japanese online brokers have competed fiercely to cut fees, the discounts are typically limited to domestic equities; a number of Japanese players, including SBI Securities and Rakuten Securities, charge fees of roughly 0.45% to 0.5% of the total trade for U.S. equity transactions

• The Ministry of Finance has issued its "JGB Newsletter" for March 2026

• The NLI Research Institute has published its "Investor Trading Trends" for February 2026

Asset Management

• Can low-cost giants become true ‘flagship’ funds: for decades, the Japanese investment trust market has chased the "trillion-yen" milestone as the ultimate mark of success; but a new report from Morningstar suggests that while Japan is finally seeing the birth of 10-trillion-yen behemoths, the industry is still struggling to cultivate "true" flagship funds that mirror the longevity and philosophical depth of their American counterparts

Digital Assets

• SBI and Megabanks successfully test regulated, KYC-compliant liquidity pools: SBI VC Trade has released the results of a pioneering proof-of-concept aimed at bringing institutional-grade compliance to Decentralized Finance; the experiment, conducted under the auspices of the Financial Services Agency’s "FinTech Proof-of-Concept Hub," marks a significant step toward a "permissioned" DeFi ecosystem where regulated financial institutions can participate in Automated Market Makers (AMMs) without sacrificing Anti-Money Laundering (AML) standards; key participants in the "DeFi Study Group" included a "who’s who" of Japanese finance, including Sony Bank, Daiwa Securities, Nomura Holdings, bitbank, Mizuho Trust & Banking, Sumitomo Mitsui Trust Bank, and Mitsubishi UFJ Trust and Banking

The Last Word: Regional Growth

There are some good reasons to establish your business outside of the Tokyo metropolitan area, but growth certainly is not one of them.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

2026 was supposed to be the year marked by real wages turning positive again, after four years of decline. Meanwhile, JR East upped its fare by 10% (on my Mitaka to Shinjuku commute), the attack on Iran is being felt immediately at the pump, and will come through - with some delay - in logistics costs, etc., and the yen keeps weakening. It is an admission of "Poor Japan" if entrance fees are moving towards a two-tier system, charging more for foreigners (who enjoy "Cheap Japan"), something we have personally only observed in emerging markets to date.

Help is on the way, though (is it?). The summit between King Trump and Prime Minister Takaichi is scheduled for March 19, 2026, the same day the Bank of Japan will conclude its Monetary Policy Meeting. Since CPI estimates have been raised over the past week to the 2% range (from a core CPI of 1.6% pre-war in the case of Goldman Sachs, for example), Governor Ueda would have ample room to raise the policy rate, but there is little doubt that the geopolitical and macro-economic situation will see him stand pat once more. Which really leaves us with the question whether Takaichi will be gifted a pair of shoes (google "Rubio Florsheim" if you scratch your head at my German humor).

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Akari Hosho secures funding from Mizuho and SMBC to scale guarantor services for Japan’s single seniors; Mitsubishi UFJ Capital and Sony back semiconductor firm LENZO in 500M JPY capital injection; SBI Holdings co-leads funding in Saudi Sharia-compliant microfinance startup Muhlah; Resona Bank backs Cross Capital’s global startup fund; Metaplanet launches JPY 4bn Bitcoin venture arm, targets stablecoin issuer JPYC in inaugural deal; GMO targets JPY 10bn for 8th venture fund, pivots focus to AI-driven FinTech; Global Brain partners with Techstars for USD 200m cross-border VC fund; former Incubate Fund Iinvestor Misuzu Matsumoto launches Oikaze Ventures with focus on early-stage bootstrapped founders

• Insurance: Clemens Philippi has been appointed Executive Officer and Chief Strategy Officer of MS&AD Insurance Group, while continuing as CEO of MSIG Asia until further notice

• Banking: MUFG deepens Indian footprint with State Bank of India alliance; Norinchukin Bank teams Up with CBRE in push for higher-yielding property investments; CCI Group expands ‘BankWill’ core banking system with AWS integration and flexible licensing; BOJ puts bond losses and real estate risks in the crosshairs for fiscal 2026 bank exams

• Payments: Bank of Japan restructures CBDC approach amid scaling hurdles, bank protections, and global ideological divides; the ASEAN+3 blueprint for the digital financial frontier; Fast Accounting and DeCurret slash B2B payment workloads by 75% in digital currency PoC; new blockchain audit tool aims to bring JPYC stablecoin to Japanese enterprises and municipalities; Nanto Bank selects Infcurion’s "Winvoice" ahead of 2027 promissory note phase-out; DG Financial Technology integrates AI with QR payments in push to modernize unmanned retail; Digital Garage targets merchant data with 2026 POS integration

• Capital Markets: several papers on equity & fixed income markets, and economics

• The Last Word: The Silver Wealth Tsunami

Venture Capital & Private Markets

• Akari Hosho secures funding from Mizuho and SMBC to scale guarantor services for Japan’s single seniors: Akari Hosho, an Osaka-based startup specializing in lifelong support and legal guarantor services for the elderly, has successfully closed a new funding round to accelerate its nationwide expansion; the capital was raised through a third-party allotment of shares, drawing in new investors SMBC Venture Capital, Mizuho Capital, and Mirai Door, alongside follow-on investment from existing backer Incubate Fund; the equity round is complemented by debt financing from Mizuho Bank; financial terms of the deal were not disclosed

• Mitsubishi UFJ Capital and Sony back semiconductor firm LENZO in 500M JPY capital injection: capitalizing on the surging global demand for energy-efficient computing infrastructure, Japanese semiconductor startup LENZO has successfully closed a 500 million JPY seed funding round; the capital injection features backing from a heavyweight consortium of high-profile domestic investors: Incubate Fund, Sony Innovation Fund, and Mitsubishi UFJ Capital; the raise highlights a growing appetite among Japanese institutional and corporate venture arms to fund homegrown deep-tech solutions capable of competing in the global semiconductor market; the Nara-based firm plans to use the fresh capital to transition its proprietary Coarse-Grained Linear Array (CGLA) architecture from the advanced design phase into physical silicon production

• SBI Holdings co-leads funding in Saudi Sharia-compliant microfinance startup: SBI Holdings is accelerating its expansion into the Middle East, co-leading an investment in the Saudi Arabian digital microfinance startup Muhlah Zamaniyah for Finance; executing the deal through a subsidiary, SBI partnered with Riyadh-based startup studio BIM Ventures as co-lead investors; the financial terms of the investment were not disclosed; Muhlah, which was incubated and spun out of BIM Ventures' startup creation program, is a fully digitized personal microfinance platform; licensed by the Saudi Central Bank (SAMA), the FinTech firm allows users to complete the entire lending process—from application to the execution of funds—entirely online

• Resona Bank backs Cross Capital’s global startup fund: Singapore-based investment firm Cross Capital is advancing toward the final close of its debut Fund of Funds, having secured new capital commitments from Resona Bank and packaging giant Toyo Seikan Group; the newly formed partnerships bring the total number of corporate Limited Partners in the Cross Capital I Limited Partnership to seven, signaling strong domestic appetite for structured access to global innovation

• Metaplanet launches JPY 4bn Bitcoin venture arm, targets stablecoin issuer JPYC in inaugural deal: Metaplanet is aggressively expanding its footprint in the digital asset space, launching a new wholly-owned venture subsidiary alongside its first major strategic investment; in a dual announcement, the Tokyo-listed company revealed the creation of Metaplanet Ventures, a dedicated investment arm armed with an expected ¥4 billion ($26.5 million) mandate over the next two to three years; the capital, which will be funded by cash flow from Metaplanet’s ongoing Bitcoin income operations, is aimed at funding, incubating, and scaling Japan's domestic Bitcoin financial infrastructure; wasting no time, the newly minted subsidiary has already signed a Letter of Intent for its inaugural deal: an investment of up to ¥400 million in the Series B financing round of JPYC Inc., Japan’s leading issuer of yen-denominated stablecoins; the transaction is slated to close in April

New Funds

• GMO targets JPY 10bn for 8th venture fund, pivots focus to AI-driven FinTech: GMO Internet Group has established its eighth venture capital fund, aiming to raise up to 10 billion yen to invest in startups operating at the intersection of artificial intelligence and financial technology; the new vehicle, officially named GMO Fintech Fund 8, will be managed by the group’s consolidated venture capital arm, GMO VenturePartners (GMO-VP); the fund is slated for a launch on April 1, 2026, with an initial capital base of 6.4 billion yen; this includes a cornerstone commitment of 2 billion yen directly from the GMO Internet Group parent company; because this investment exceeds 10% of the parent company’s capital, the new fund will be classified as a specified subsidiary of the group

• Global Brain partners with Techstars for USD 200m cross-border VC fund: Tokyo-based venture capital firm Global Brain Corporation has entered into a comprehensive strategic partnership with leading US-based accelerator Techstars; at the center of the alliance is the planned formation of a joint venture capital fund targeting $200 million (approximately ¥30 billion) in assets under management (AUM); according to the companies, the fund will aggressively pursue direct investments into early-stage companies within Techstars’ expansive portfolio and alumni network

• Former Incubate Fund Iinvestor Misuzu Matsumoto launches Oikaze Ventures with focus on early-stage bootstrapped founders: the Japanese venture capital landscape has a new player aimed at the market's earliest stages; Oikaze Ventures, headquartered in Tokyo’s Minato Ward, announced the official launch of its operations and the establishment of its inaugural vehicle, Oikaze Ventures Fund I; helmed by General Partner Misuzu Matsumoto, the firm is hyper-focused on the pre-seed and seed stages; living up to its name—Oikaze translates to "tailwind" in Japanese—the firm’s stated mission is to serve as the "first tailwind for entrepreneurs," providing rigorous, hands-on support while prioritizing founder vision during the critical early days of business creation

Other

• FUNDINNO reports revenue dip in first earnings as public company: in the high-stakes arena of private equity and venture capital, timing is everything; for FUNDINNO (TSE Growth: 462A), Japan’s premier digital platform for unlisted equities, the timing of mega-deals has resulted in a sluggish first quarter for the fiscal year ending October 2026; in its earnings presentation released on March 13, 2026, FUNDINNO reported Q1 operating revenue of 410 million yen, representing a year-over-year decline; operating profit also slipped into negative territory, registering a loss of 181 million yen; yet, the tone of FUNDINNO CEO Yuki Shibahara during the earnings call was anything but panicked; the company maintained a fiercely bullish full-year forecast, projecting operating revenue to surge 55.6% to 3.89 billion yen, with operating profit expected to skyrocket 430.1% to 1.13 billion yen

Insurance

• Clemens Philippi has been appointed Executive Officer and Chief Strategy Officer of MS&AD Insurance Group, while continuing as CEO of MSIG Asia until further notice

Banking

• MUFG deepens Indian footprint with State Bank of India alliance: Mitsubishi UFJ Financial Group has entered into a strategic partnership with the State Bank of India, India’s largest commercial lender, in a move designed to bridge two of Asia’s largest economies; the agreement aims to facilitate cross-border expansion for both Japanese and Indian corporations; the tie-up is structured to leverage SBI’s massive domestic footprint—spanning over 23,000 branches and commanding total assets of INR 71.6 trillion (JPY 124.5 trillion) as of December 2025—alongside MUFG’s established global network and cross-border financing expertise

• Norinchukin Bank teams Up with CBRE in push for higher-yielding property investments: global commercial real estate giant CBRE and Japanese institutional heavyweight The Norinchukin Bank have inked a strategic partnership to hunt for higher-yielding property investments; the basic agreement centers on a joint investment program designed to capitalize on "value-add" real estate opportunities across the Japanese market. The alliance pairs Norinchukin’s massive capital pool with CBRE’s deep operational and asset management expertise.

• CCI Group expands ‘BankWill’ core banking system with AWS integration and flexible licensing: CC Innovation, a subsidiary of the newly rebranded CCI Group, announced a significant strategic expansion for its upcoming next-generation core banking system, "BankWill"; slated for launch in January 2027, the platform will now incorporate Amazon Web Services (AWS) into its multi-cloud infrastructure and introduce flexible purchasing models, stepping away from its original strict Software-as-a-Service (SaaS) framework; the move is designed to address the diverse management challenges, IT strategies, and operational needs of Japan's regional financial institutions

• BOJ puts bond losses and real estate risks in the crosshairs for fiscal 2026 bank exams: in its newly released "On-Site Examination Policy for Fiscal 2026," the Bank of Japan outlined its supervisory roadmap for the coming year; while acknowledging that the Japanese financial system remains fundamentally sound and well-capitalized, the BOJ highlighted mounting vulnerabilities tied to paper losses on domestic bonds, aggressive real estate lending in major cities, and structural threats to regional banks; the policy document reveals a central bank addressing the complex realities of a tightening monetary environment, demographic decline, and rapid technological shifts

Payments

Policy

• Bank of Japan restructures CBDC approach amid scaling hurdles, bank protections, and global ideological divides: on February 2, 2026, the BOJ’s Payment and Settlement Systems Department convened the 10th gathering of the Liaison and Coordination Committee on Central Bank Digital Currency, for which the minutes have been published last week; the meeting marked the end of the initiative's exploratory phase and the beginning of a highly targeted, consolidated approach aimed at integrating a digital yen into the broader, rapidly evolving web of tokenized finance, stablecoins, and legacy banking systems

• The ASEAN+3 blueprint for the digital financial frontier: Osaka recently played host to a joint seminar convened by the ASEAN+3 Macroeconomic Research Office (AMRO) and the International Monetary Fund, a strategic summit of the region’s most influential financial architects; central bankers, senior policy makers, and private sector experts gathered to confront the dualities of digitized money, seeking a path that balances "transformative potential" with the immutable requirements of national stability

Stablecoins & Tokenized Deposits

• Fast Accounting and DeCurret slash B2B payment workloads by 75% in digital currency PoC: a consortium of four domestic technology and financial firms has successfully completed a Proof of Concept aimed at fully automating B2B invoice payments; by bridging the international e-invoicing standard "Peppol" with the bank-backed digital currency "DCJPY," the initiative targets a long-sought goal in corporate accounting: the complete elimination of missed and erroneous bank transfers; the joint venture, comprising Fast Accounting, GMO Aozora Net Bank, Internet Initiative Japan, and DeCurret DCP, tackles the notoriously inefficient legacy processes of corporate billing; according to the consortium, the recent trial successfully reduced the personnel required for billing and payment reconciliation by approximately 75%, demonstrating massive potential for digital transformation in corporate finance

• New blockchain audit tool aims to bring JPYC stablecoin to Japanese enterprises and municipalities: Tokyo-based software developer Asteria Corporation (TSE: 3853) has partnered with blockchain engineering firm Angoya to launch "JPYC Explorer," a specialized audit-support tool for the Japanese yen-pegged stablecoin, JPYC; slated for release on April 1, 2026, the new platform targets a critical bottleneck in the institutional adoption of digital assets: the ability to conduct rigorous, compliant accounting audits on blockchain transactions; while JPYC—issued by JPYC Inc. since October 2025—has garnered attention for facilitating fast, low-cost domestic and cross-border settlements, listed companies and local municipalities have hesitated to adopt it due to the technical complexities of on-chain auditing

"Traditional" Payments

• Nanto Bank selects Infcurion’s "Winvoice" ahead of 2027 promissory note phase-out: financial technology firm Infcurion announced that its B2B payment platform, "Winvoice," has been adopted by Nara-based Nanto Bank in a move designed to buffer regional businesses against looming regulatory shifts in corporate settlements; the partnership marks the first instance of a Japanese regional bank utilizing the Winvoice platform to build and deploy its own white-labeled invoice card payment service

• DG Financial Technology integrates AI with QR payments in push to modernize unmanned retail: Digital Garage and its payment processing subsidiary DG Financial Technology have launched "Cloud Pay Business," the next-generation digital transformation solution that merges DGFT’s patented QR-code payment architecture with artificial intelligence, with an initial rollout targeting Japan's amusement and arcade industry; beyond mere transaction processing, the platform leverages AI to offer advanced business management tools, including inventory control, demand forecasting, and data-driven marketing support

• Digital Garage targets merchant data with 2026 POS integration: Digital Garage Group and its subsidiary DG Financial Technology (DGFT) have launched a comprehensive new payment platform to accelerate digital transformation (DX) for brick-and-mortar retailers; the system will be anchored by the upcoming release of a next-generation smart payment terminal, developed in deep collaboration with retail technology giant Toshiba Tec Corporation; scheduled to hit the Japanese market in April 2026, the hardware foundation of the platform relies on the "N750P/N750" terminals manufactured by Newland NPT; DGFT and TD Payment Corporation—a Toshiba Tec subsidiary—have equipped these terminals with payment applications heavily optimized for domestic merchants; crucially, the devices will natively integrate with Toshiba Tec’s widely used POS systems, offering seamless multi-payment capabilities

Capital Markets

• Nomura issued its quarterly "Outlook for FY25-26 Corporate Earnings", as well as its "Individual Investor Survey" for March 2026

• Amundi has published "Reform and reflation: unlocking Japanese equity upside"

• Kambiz Homayounfar explains "Why Dark Pools Fail", a dynamic model of liquidity, adverse selection, and fee design in Japan's PTS ecosystem

• The Bank of Japan Institute for Monetary and Economic Studies has published "Determinants of Liquidity in the JGB Market"

• Amova Asset Management comments on "Japan's output gap"

The Last Word: The Silver Wealth Tsunami

Japan has sailed into uncharted demographic waters. As the nation grapples with what demographers are grimly calling the "multi-death era," the Japanese financial sector is facing a slow-motion crisis that threatens to freeze trillions of yen in household wealth.

With the nation's elderly population swelling—and living longer than ever before—the intersection of cognitive decline and asset management has become one of the most pressing macroeconomic risks of the decade. Left unchecked, the "salting away" or freezing of assets owned by seniors suffering from dementia could severely throttle capital liquidity and economic vitality.

Yet, a new consensus is emerging in Tokyo's financial districts. According to a landmark Spring 2026 report out of the Japan Research Institute's "Cross Finance Future Tech" series, the solution lies not in replacing human advisors with algorithms, but in a uniquely Japanese "hybrid model." By fusing cutting-edge neurotechnology, AI-driven digital health, and the traditional, high-touch trust of local bank tellers, Japan is attempting to engineer a global blueprint for managing the wealth of a super-aging society.

Here is how the world’s oldest major economy is rewriting the rules of wealth management.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

I started compiling this edition on Monday morning, while listening to Lloyd Blankfein's "Streetwise" in the background. It just so happened that his memoirs reached the point of the Lehman collapse, the day after which the Dow dropped by around 4.4%. I kept writing, and then took a look at the Nikkei, which was down a little more than 7% at that point. Are you kidding me, worse than the Lehman shock? The Nikkei recovered a bit, and closed down approximately 5%, so I guess we are fine. I hope you are, at least.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Tokyo-based XTech Ventures closes JPY 13bn Fund III, expanding focus to Space, Defense, and Deep Tech; Japan Airlines internalizes VC operations with launch of Silicon Valley subsidiary and $50M tech fund; new PE fund targets 'Internal Succession' to save Japan’s aging SMEs

• Insurance: Nippon Life to launch 'Pitaho' insurance, tying benefits to actual treatment costs amid rising medical expenses

• Banking: MUFG and AlbaCore team up to target European infrastructure debt gap with new platform; the ascendance of the Hokkoku Digital Banking Overdraft; beyond document generation, MUFG integrates Sakana AI for corporate credit approvals; Mizuho’s custom AI matches GPT-5.2 accuracy on Wall Street speed, keeps bank data strictly on-premise

• Payments: Sony Bank advances web3 ecosystem strategy via stablecoin alliance with JPYC; beyond the hype, mega-banks and exchanges clash with regulatory hurdles in Japan’s stablecoin push; Toys“R”Us Japan deploys Forter’s AI platform, achieving zero fraud and slashing cart abandonment rates; JCB and Resona target 2028 for commercial rollout of world’s first ultra-wideband payment system; NetStars reaches profitability, see record transaction volume and cost efficiency drive first full-year surplus since listing

• Capital Markets: PayPay announced terms for its IPO, planning to raise $1.0 billion by offering 55 million ADSs at a price range of $17 to $20

• Digital Assets: SMBC Nikko partners with Nethermind to bridge TradFi and DeFi via Agentic AI; beyond prime real estate, how Japan is rewiring its capital markets with tokenized assets; Vlightup unveils XRPL-based settlement platform, aiming to eliminate the ‘last friction’ in global trade finance; MoneyX 2026, orchestrating the on-chain revolution in global finance

• The Last Word: Pay & Pension Gender Gap

Venture Capital & Private Markets

• Tokyo-based XTech Ventures closes JPY 13bn Fund III, expanding focus to Space, Defense, and Deep Tech: XTech Ventures, a Tokyo-based venture capital firm, has successfully closed its third flagship fund at approximately 13 billion yen ($86 million); the new vehicle, formally named XTech 3rd Investment Partnership, will maintain the firm’s focus on seed and early-stage startups while aggressively expanding its mandate into national-interest sectors such as defense, aerospace, and energy infrastructure

• Japan Airlines internalizes VC operations with launch of Silicon Valley subsidiary and $50M tech fund: Japan Airlines is restructuring its approach to corporate venture capital, announcing the launch of Japan Airlines Ventures (JALV), a wholly-owned subsidiary based in the United States; the move signals a strategic pivot for the carrier, making it the first airline in Asia to transition from a joint-venture investment model to a fully in-house CVC structure

• New PE fund targets 'Internal Succession' to save Japan’s aging SMEs: a consortium of Japan’s leading corporate and financial titans has launched a new private equity fund designed to rescue small and medium-sized enterprises (SMEs) from the country's looming demographic crisis; trading house ITOCHU Corporation, alongside Nomura Holdings and Sumitomo Mitsui Trust Bank, have established the "Team Succession Platform Investment Limited Partnership"; the fund focuses on a highly specific but growing niche: bankrolling internal business successions

Insurance

• Nippon Life to launch 'Pitaho' insurance, tying benefits to actual treatment costs amid rising medical expenses: Nippon Life Insurance Company has announced the upcoming launch of "Treatment Support Insurance 'Pitaho'," a new addition to its flexible Nissay Mirai no Katachi lineup; set to hit the market on April 2, 2026, the new product aims to tackle the unpredictability of modern healthcare costs by linking insurance payouts directly to the national medical remuneration point system; the development of Pitaho comes in response to the increasing financial strain on patients in Japan; according to data cited by Nippon Life, approximately 30% of hospitalized individuals now face out-of-pocket expenses exceeding 200,000 yen upon admission

Banking

• MUFG and AlbaCore team up to target European infrastructure debt gap with new platform: Japanese banking giant Mitsubishi UFJ Financial Group has deepened its integration with London-based credit specialist AlbaCore Capital Group, unveiling a joint platform designed to capture the growing institutional demand for European and UK infrastructure debt; the strategic partnership will see the launch of dedicated investment-grade and high-yield strategies; the move aims to marry MUFG’s dominance in global project finance origination with AlbaCore’s expertise in private credit management and deal execution

• The ascendance of the Hokkoku Digital Banking Overdraft: within the contemporary Japanese financial landscape, digital transformation has become a fundamental survival mechanism for the regional banking sector; the Hokkoku Digital Banking Overdraft service represents this shift, moving beyond incremental product improvement to redefine how regional financial institutions facilitate capital velocity for local enterprises; as a core extension of the "Hokkoku Digital Banking" ecosystem, this service holds the distinction of being the inaugural initiative of its kind among Japanese regional banks; this evolution provides the institutional framework necessary to sustain the digital-native financial solutions required by today’s corporations and sole proprietors

• Beyond document generation, MUFG integrates Sakana AI for corporate credit approvals: Sakana AI and Mitsubishi UFJ Bank announced that their co-developed "AI Loan Expert" system is advancing to a real-world testing phase following a successful six-month proof of concept; the project, a cornerstone of the comprehensive partnership announced by the two firms in 2025, aims to overhaul the bank’s traditional credit approval (ringi) process; having confirmed the system's operational viability at select pilot locations, MUFG is now preparing for a phased rollout across its nationwide network of branches

• Mizuho’s custom AI matches GPT-5.2 accuracy on Wall Street speed, keeps bank data strictly on-premise: Mizuho Financial Group has successfully developed a proprietary, finance-specific Large Language Model capable of delivering highly accurate, sub-second responses without relying on prolonged AI reasoning processes; crucially, the new model operates entirely within Mizuho’s secure, on-premise network, allowing the bank to process highly confidential data with the sophistication of advanced general-purpose models like GPT-5.2, but without the security risks of transmitting data to external APIs

Payments

• Sony Bank advances web3 ecosystem strategy via stablecoin alliance with JPYC: Sony Bank has signed a Memorandum of Understanding with JPYC Inc., the issuer of the yen-pegged stablecoin "JPYC"; the alliance aims to seamlessly integrate stablecoin payments with Sony Bank’s traditional banking infrastructure and entertainment services, marking a significant step in the mainstream adoption of web3 technologies in Japan; BlockBloom, Sony Bank’s wholly-owned Web3 subsidiary, will play a central role in executing this initiative, leveraging its specialized blockchain expertise to bridge the two entities

• Beyond the hype, mega-banks and exchanges clash with regulatory hurdles in Japan’s stablecoin push: as Japan cements its position as a global frontrunner in digital asset regulation, the domestic financial sector is pivoting from theoretical discussions to the practical realities of stablecoin deployment; in a panel discussion hosted at SBI R3 Japan's "Bridging TradFi and Web3" event during Japan FinTech Week, moderator Yusuke Ikunaga of SBI R3 Japan pulled back the curtain on the nation’s stablecoin ambitions with heavyweights from Sumitomo Mitsui Banking Corporation (Hiromitsu Shimoirisa) and crypto exchange SBI VC Trade (Tomohiko Kondo), revealing a landscape brimming with corporate demand but temporarily bottlenecked by stringent regulatory speed limits; the session offered a rare, dual-lens perspective on the market: SMBC detailing the institutional, issuance-side infrastructure, and SBI VC Trade providing a boots-on-the-ground look at domestic circulation and retail adoption

• Toys“R”Us Japan deploys Forter’s AI platform, achieving zero fraud and slashing cart abandonment rates: Toys“R”Us Japan has successfully integrated AI-driven fraud prevention technology from New York-based Forter, a move that has effectively eradicated fraudulent transactions while recovering lost sales tied to checkout friction; following a one-month operational period, the retailer reported zero instances of e-commerce fraud alongside a highly streamlined customer payment experience

• JCB and Resona target 2028 for commercial rollout of world’s first ultra-wideband payment system: Japanese credit major JCB and banking group Resona Holdings have announced the launch of a full-scale project to commercialize Ultra-Wideband (UWB) payment technology; the partnership aims to supersede current Near Field Communication (NFC) and QR code standards by introducing a "hands-free" payment ecosystem; under the proposed timeline, the companies intend to begin small-scale commercial operations in 2027, with a full market rollout targeted for 2028

• NetStars reaches profitability, see record transaction volume and cost efficiency drive first full-year surplus since listing: NetStars announced its consolidated financial results for the fiscal year ended December 31, 2025, achieving its first full year of profitability since its public listing; driven by a surge in domestic cashless adoption and rigorous technological cost controls, the company outperformed its own forecasts across all key profit metrics; the payment gateway provider reported that Gross Payment Volume (GPV) shattered historical records, exceeding 2.1 trillion yen, a 33.2% increase year-over-year; this scale, combined with the successful deployment of AI-driven infrastructure, allowed NetStars to demonstrate significant operating leverage, proving that its business model has successfully transitioned from a high-burn growth phase to a sustainable, profitable expansion phase

Economics

• Japan’s proposed "Zero Tax" on food unlikely to spark consumer boom, think tank warns: following a historic election victory, Japan's ruling party is accelerating discussions to temporarily slash the consumption tax on food to zero; but a new research note by the Itochu Research Institute warns that the highly anticipated policy may fail to deliver meaningful economic stimulus—and will end up disproportionately benefiting wealthy households over the working class; according to Deputy Principal Researcher Sota Takano, the proposed two-year tax holiday on essential groceries will do little to move the needle on macroeconomic growth; while it will offer a slight cooling effect on inflation, the actual savings for the average household will be notably modest, prompting economists to suggest that targeted cash handouts would yield a much higher return on government investment

• The Bank of Japan has published a working paper on "Understanding Post-Pandemic Inflation in Japan and the U.S.: A Narrative Sign Restriction Approach"

• Bank of Japan Governor Ueda delivered his opening remarks at the FIN/SUM 2026

Capital Markets

• PayPay announced terms for its IPO, planning to raise $1.0 billion by offering 55 million ADSs at a price range of $17 to $20:  cornerstone investors Qatar Holding, Visa, and Abu Dhabi Investment Authority (ADIA) have indicated on $220 million of the IPO, or 21.6% of the deal in total; at the midpoint of the proposed range, PayPay would command a market cap of $12.4 billion; less than a month ago, news reports suggested PayPay had planned to raise money at a valuation of more than $19.6 billion; while PayPay is keeping its float relatively low at 8.2% of shares outstanding, the $1 billion deal size would still represent the largest US IPO from a Japanese issuer on record, above 2016's Line, which completed a dual listing that raised $722 million in the US and $427 million in Japan; FT Partners have also published a company profile

• UBS sees "Oil prices in the driving seat" for the USD/JPY exchange rate

• Standard Chartered has been asked, "Is the Japanese Yen still a safe-haven currency?"

• Zurich Insurance takes on "The Widowmaker": for decades, betting on rising Japanese Government Bond (JGB) yields was called the ‘widowmaker’ trade; Japan’s enormous public debt-to-GDP ratio led many to see JGBs as an obvious "short"; no such luck: yields moved lower and lower... until recently; JGB yields have surged higher; Zurich analyzes the implications of higher bond yields for the economy and financial markets

• The Ministry of Finance has published its "JGB Newsletter" for February 2026

Digital Assets

• SMBC Nikko partners with Nethermind to bridge TradFi and DeFi via Agentic AI: SMBC Nikko Securities has entered into a strategic collaboration with blockchain infrastructure firm Nethermind, aiming to prototype a secure, compliant gateway for Japanese investors to access Decentralized Finance (DeFi) markets, utilizing advanced "agentic AI" to manage trading and risk; the initiative marks a pivotal step for one of Japan’s leading securities firms, signaling a commitment to active infrastructure development; according to the announcement, the collaboration will focus on building tools that allow secure interaction with Automated Market Makers (AMMs); the project places a heavy emphasis on operational robustness and user safeguards, seeking to mitigate the unique risks associated with decentralized environments

• Beyond prime real estate, how Japan is rewiring its capital markets with tokenized assets: Japan’s security token market is quietly undergoing a massive transformation; what began as a niche experiment in digitizing prime Tokyo real estate has ballooned into a market exceeding 130 billion yen, drawing in major financial institutions and retail investors alike; however, as the market matures, industry leaders are warning that outdated regulations and fragmented settlement infrastructure could bottleneck the next phase of growth; in a panel discussion hosted at SBI R3 Japan's "Bridging TradFi and Web3" event during Japan FinTech Week, Takahiro Saito of Daiwa Securities and Tatsuya Saito of blockchain infrastructure provider Progmat laid out the bull case for Real World Assets (RWAs), while issuing a stark call for regulatory reform

• Vlightup unveils XRPL-based settlement platform, aiming to eliminate the ‘last friction’ in global trade finance: Vlightup, a Tokyo-based FinTech firm, has officially launched a "Next-Generation Trade Finance Global Settlement Platform" built on the XRP Ledger (XRPL); the new service aims to synchronize information and fund movement in Letter of Credit (LC) transactions, targeting what the company describes as the "last friction" in trade digitalization: the delay between document verification and actual payment execution; while the digitization of global trade documents—such as electronic Bills of Lading (eB/L) and electronic Letters of Credit (eLC)—has accelerated over the past decade, Vlightup argues that the settlement layer remains archaic

• MoneyX 2026, orchestrating the on-chain revolution in global finance: the MoneyX 2026 conference has signaled a definitive shift from blockchain experimentation to a high-velocity era of implementation; as global finance navigates the transition to an on-chain operating system, we identified ten imperatives discussed at MoneyX that define the strategic landscape

The Last Word: Pay & Pension Gender Gap

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

Thank you for your patience (again), we are just a little bit conference'd out, and there are still a few days to go in Japan FinTech Week(s). For us, the highlights during the first week were JPYC's funding round, Progmat's migration to Avalanche, and SBI/Startale's expected launch of JPYSC. More to come from FIN/SUM this week.

Here is what we are going to cover:

• Venture Capital & Private Markets: JPYC secures JPY 1.78bn in Series B first close to cement status as Japan’s default stablecoin infrastructure; Citi aggressively expands AI footprint with new infrastructure banking unit and strategic stake in Japan’s Sakana AI

• Insurance: Sompo Holdings has successfully completed the acquisition of Aspen Insurance Group announced in September 2025

• Banking: Rakuten revives FinTech consolidation plan to combat rising rates and intensifying competition (and nukes Rakuten Bank's stock); Mizuho Bank discloses loss of storage media at subcontractor, data of over 48,000 customers potentially at risk; GMO Aozora Net Bank deploys AI for third-party management, enhances risk governance with "Lens RM"; Zero energy renovation (Zenobe) & portfolio valuation for real estate assets; Fujitsu overhauls Financial DX suite, targets JPY 200bn in revenue by 2030

• Payments: SBI Holdings and Startale unveil JPYSC, a trust bank-backed stablecoin for the enterprise sector; MoneyX: The AI agent economy and why LINE & JPYC are betting on stablecoins for the future of payments

• Capital Markets: Woodstock brings “Robinhood Moment” to Japan with Zero-Fee, 24-Hour US stock trading launch; from failed AI startup to FinTech unicorn, Alpaca becomes the AWS of global investing; BBVA, Spain’s second-largest bank, plans to start a brokerage business in Japan as part of the firm’s global expansion drive

• Asset Management: Stefanie Drews, currently President & CEO of Amova Asset Management, has been appointed to the position of Executive Officer of its parent company, Sumitomo Mitsui Trust Group

• Digital Assets: Progmat pivots to public chain, migrates JPY 440bn in security token assets to Avalanche; MoneyX: Circle and Binance debate the path to a multi-currency crypto market; global divergence, a strategic comparison of US and Japanese blockchain regulatory trajectories

• The Last Word: The Rising Sun in a Crowded Field

Venture Capital & Private Markets

• JPYC secures JPY 1.78bn in Series B first close to cement status as Japan’s default stablecoin infrastructure: JPYC Inc., the issuer of the Japanese Yen-pegged stablecoin "JPYC," has completed the first close of its Series B funding round, raising a total of 1.78 billion yen (approx. $11.8 million USD); the round was led by Asteria Corporation, with participation from a diverse consortium of strategic investors including JR West Innovations, bitFlyer Holdings, and regional banking venture arms; this capital injection serves as confirmation for the Tokyo-based fintech firm's strategy as it transitions from a proof-of-concept phase to full-scale implementation; following its registration as a Funds Transfer Service Provider in August 2025 and the issuance of the new regulatory-compliant JPYC in October 2025, the company is positioning itself as the de facto standard for digital yen circulation

• Citi aggressively expands AI footprint with new infrastructure banking unit and strategic stake in Japan’s Sakana AI: Citigroup has launched a dual-pronged expansion into the artificial intelligence sector, announcing the formation of a dedicated AI infrastructure banking team alongside a landmark strategic investment in Tokyo-based developer Sakana AI; the moves, disclosed in consecutive announcements this past week, underscore the bank’s intent to capture a significant share of the burgeoning AI economy, both by financing the capital-intensive hardware build-out and by integrating next-generation software into its own global financial services

Not FinTech

• Z Venture Capital participated in RLWRLD's $26 million “Seed 2” funding round: the developer of physical AI and robotics foundation models has raised approximately $41 million since its inception; the Seoul-based company is banking on a strategy of training its software intelligence directly within live industrial environments rather than traditional laboratories

• Mega banks participate in Bluefield Energy's 660 million yen seed funding round: the financing will accelerate the development of the company’s cloud-based energy management systems and expand its aggregation business for decentralized solar power plants; the round was led by XTech Ventures, with significant participation from the venture capital arms of Japan’s major financial institutions, including SMBC Venture Capital, Mitsubishi UFJ Capital, and Mizuho Capital; the total figure combines third-party allotment equity financing of 610 million yen and debt financing from MUFG Bank and the Japan Finance Corporation

Insurance

• Sompo Holdings has successfully completed the acquisition of Aspen Insurance Group announced in September 2025; a subsidiary of Sompo Holdings acquired 100% of the issued Class A ordinary shares of Aspen

Banking

• Rakuten revives FinTech consolidation plan to combat rising rates and intensifying competition: Rakuten Group and its banking unit, Rakuten Bank, have agreed to reopen negotiations regarding the reorganization of their financial technology businesses, less than two years after shelving a similar proposal; the companies have executed a Memorandum of Understanding to integrate Rakuten Bank, Rakuten Card, and Rakuten Securities into a unified group structure; the target effective date for the reorganization is set for October 2026

• Mizuho Bank discloses loss of storage media at subcontractor, data of over 48,000 customers potentially at risk: Mizuho Bank announced that a storage medium containing sensitive customer information has been lost at one of its third-party system development subcontractors; according to the bank’s disclosure, the missing media was part of a dedicated terminal used in a development environment for overseas systems; the loss occurred at a "secondary subcontractor" responsible for system development; while the bank is investigating the possibility of unauthorized removal, the storage device has not yet been located

• GMO Aozora Net Bank deploys AI for third-party management, enhances risk governance with "Lens RM": Lens, a provider of governance and risk management solutions, has deployed its third-party management cloud solution, "Lens RM," at GMO Aozora Net Bank; by incorporating artificial intelligence into the increasingly complex risk assessment process associated with expanding startup transactions and its Banking-as-a-Service (BaaS) business, the bank aims to achieve both operational efficiency and strengthened governance

• Zero energy renovation (Zenobe) & portfolio valuation for real estate assets: to achieve carbon neutrality by 2050, Japanese financial institutions are promoting "Zero Energy Renovation (Zenobe) Finance" to upgrade the environmental performance of aging building stocks; this requires a collaborative effort by major banks to address economic hurdles and technical constraints that currently prevent owners from retrofitting older properties; financial institutions aim to move beyond rigid statutory lifespans by developing evidence-based screening and "connoisseurship" to evaluate a building's true green potential; market data suggests a growing "green premium," where tenants are increasingly willing to pay higher rents for sustainable, energy-efficient office spaces; ultimately, the initiative seeks to establish a new investment ecosystem where decarbonization efforts are directly reflected in real estate valuations and asset liquidity; successful implementation requires standardized CO2 disclosure and the widespread adoption of energy certifications to foster trust among global investors

• Fujitsu overhauls Financial DX suite, targets JPY 200bn in revenue by 2030: Fujitsu is doubling down on its digital transformation strategy for the financial sector, announcing a major reorganization of its "Uvance for Finance" portfolio; the Japanese technology giant aims to generate 200 billion yen in sales from this business segment by the fiscal year ending March 2030, betting heavily on generative AI to modernize legacy systems across banking, insurance, and securities; the expanded roadmap, originally established in mid-2025, now encompasses the entire financial spectrum—including credit and leasing—and is structured around seven core offerings; Fujitsu’s strategy pivots away from bespoke legacy maintenance toward "Fit-to-Standard" cloud services driven by automation

Payments

• SBI Holdings and Startale unveil JPYSC, a trust bank-backed stablecoin for the enterprise sector: SBI Holdings and Startale Group officially unveiled "JPYSC" with a view to bridge traditional banking with the burgeoning Web3 economy, branding it as the first Japanese Yen stablecoin backed by a trust bank; the strategic alliance positions JPYSC as a fully regulated digital asset designed for institutional adoption; according to the companies, the stablecoin will be issued by Shinsei Trust & Banking as a "Type III Electronic Payment Instrument"; this specific classification places the asset strictly under Japan’s rigorous regulatory framework, ensuring adherence to financial laws required for high-volume corporate and cross-border settlements

• MoneyX: The AI agent economy and why LINE & JPYC are betting on stablecoins for the future of payments: LINE NEXT announced the integration of the yen-denominated stablecoin JPYC into its upcoming Web3 wallet, "Unify", in order to accelerate the mainstream adoption of cryptocurrency in Japan; the announcement, made during the WebX conference, signals a transition from experimental blockchain projects to tangible implementations, leveraging the ubiquitous LINE messaging app to bridge the gap between retail users and the digital economy

Economics

• Apollo has published an analysis of the volume of crude oil through the Strait of Hormuz, by destination, as shown in the chart above, with Japan having the fourth largest dependency

• The Bank of Japan has published "Supply Constraints and Inflation Dynamics": this paper analyzes the impact of supply constraints on inflation dynamics and its mechanisms from both empirical and theoretical perspectives; it also examines recent changes in the relationship between supply constraints and inflation dynamics, as well as measures to mitigate the effects of supply constraints on inflation

Capital Markets

• Woodstock brings “Robinhood Moment” to Japan with Zero-Fee, 24-Hour US stock trading launch: Woodstock has completed a sweeping overhaul of its service model, introducing 24-hour trading capability and completely eliminating transaction fees for US stocks; the announcement was made during a media briefing held in Tokyo, where Woodstock CEO Brian Yun outlined the company’s aggressive strategy to capture the burgeoning interest in US equities among Japan’s "smartphone-native" Generation Z

• From failed AI startup to FinTech unicorn, Alpaca becomes the AWS of global investing: Alpaca, the API-first stock brokerage platform that powers hundreds of FinTech applications worldwide, has officially secured its Series D funding, pushing the company’s valuation past the coveted $1 billion mark; however, for Co-founder and CTO Hitoshi Harada, the "unicorn" label—once a rarity in the startup world—is less a destination than a mile marker; speaking recently at a Tokyo FinTech Meetup on the company’s trajectory, Harada outlined Alpaca’s evolution from a struggling deep-learning startup into a critical infrastructure provider for the global financial ecosystem

• BBVA, Spain’s second-largest bank, plans to start a brokerage business in Japan as part of the firm’s global expansion drive: the lender, based in the city of Bilbao in Spain, aims to establish a local securities subsidiary in Japan by the end of the year, subject to approval by the FSA; that would make it the first Spanish firm to operate a brokerage house in Japan

• Why Japanese stocks could keep rallying: Goldman Sachs Research’s Bruce Kirk discusses the implications of Japan’s recent snap election and the implications for the equity market and foreign investors

Asset Management

• Stefanie Drews, currently President & CEO of Amova Asset Management (formerly Nikko Asset Management), has been appointed to the position of Executive Officer of its parent company, Sumitomo Mitsui Trust Group, with the added title of Global Asset Management Officer, effective April 1, 2026; her role at Amova will not change, where she will continue as CEO; Drews has also recently appeared on Cathy Wood's ARK Invest podcast, under the title "Leading With Purpose: Personal, Professional And Planet"

Digital Assets

• Progmat pivots to public chain, migrates JPY 440bn in security token assets to Avalanche: Progmat has entered into a strategic partnership with Ava Labs (Avalanche) and blockchain interoperability startup Datachain, aiming to accelerate the "financial on-chain" ecosystem by migrating Progmat’s Security Token (ST) platform from a private ledger to the Avalanche public blockchain ecosystem; Progmat, which holds the top market share in Japan for security tokens, revealed it will transition its "Progmat ST" issuance and management infrastructure from the enterprise-focused "Corda 5" private ledger to "Avalanche L1" (formerly known as Subnets)

• MoneyX: Circle and Binance debate the path to a multi-currency crypto market: while the global stablecoin market has swelled to $300 billion following the U.S. enactment of the "Genius Act" in 2025, the sector remains overwhelmingly tethered to the Greenback; speaking at the MoneyX/WebX conference, executives from Circle Internet Group and Binance debated the path toward a truly multi-currency digital financial system, even as U.S. dollar-denominated assets continue to command 99% of the market; in a panel titled "The Future of Cross-Border Payments," moderated by Nikkei’s Takehiko Koyanagi, the industry leaders outlined divergent yet complementary strategies to bridge the gap between crypto-native trading and real-world utility

• Global divergence, a strategic comparison of US and Japanese blockchain regulatory trajectories: at a Japan Blockchain Association webinar, Startale Group's Sota Watanabe and Kengo Masuyama discussed the evolving landscape of blockchain regulation in both Japan and the United States; the speakers highlight how US legislative drafts, such as the Lummis-Gillibrand and Clarity Acts, are moving toward a tiered system that distinguishes between securities and network tokens; they emphasize that Japan’s regulatory direction is shifting from a focus on payments to investor protection, potentially reclassifying crypto assets under the Financial Instruments and Exchange Act; to ensure Japan remains competitive, the Japan Blockchain Association has established an On-chain Subcommittee to advocate for practical rules for DeFi and stablecoins; the discussion concludes that clear legal frameworks are essential for encouraging traditional financial institutions to adopt on-chain technology without stifling innovation

The Last Word: The Rising Sun in a Crowded Field: Japan’s Entrepreneurial Standing and the Asian Competitive Edge

In an era defined by intensifying geopolitical fragmentation and the relentless march of technological disruption, a nation’s entrepreneurial health is a critical indicator of national resilience and survival.

For Japan, the stakes are heightened by a deepening demographic depletion that threatens traditional industrial output. To remain relevant, Japan must transition from a reliance on legacy corporate structures to a dynamic ecosystem of agile, new ventures.

This analysis utilizes the Global Entrepreneurship Monitor (GEM) 2025/2026 report as its "ground truth," relying on the Adult Population Survey (APS) to capture the lived experience of the populace and the National Expert Survey (NES) to evaluate the structural integrity of the entrepreneurial framework.

The metrics covered reveal that while Japan remains an upper-income anchor, it faces significant structural fault lines that risk ceding its innovative edge to more aggressive regional peers. Read it here.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

Happy birthday to Emperor Naruhito 🎂

It's conference week again! If you would like to meet, you will most likely find us at the N.Avenue conference, the Credit Saison Blockchain Summit, the Yield Summit, and MoneyX. If you are coming to Tokyo for Japan FinTech Week, have an awesome stay!

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Yuimedi secures JPY 400m to streamline medical data infrastructure with AI; SIGQ secures JPY 123m in Pre-Series A funding led by Mizuho and SMBC; NTT DOCOMO Ventures backs Bastion to bolster regulated stablecoin infrastructure; HiJoJo Partners secures JPY 1bn in Series B1, completes “mega-bank trifecta” with SMBC backing

• Insurance: Sompo Holdings lifts full-year outlook to record high as 3Q profit surges 47% on underwriting improvements; InsurTech Profile - OdysseyAI

• Banking: MUFG Bank taps Uzabase’s Speeda to power AI-driven "Proposal Data Lake" for Corporate Banking; Hokkoku Bank integrates core lending functions into proprietary 'IBPlatform' to automate operations; Yamato Credit Finance partners with Moneytree to digitize SME factoring

• Payments: Digital Garage, JCB, and Resona launch in-store stablecoin payment trial; Nudge launches "Entertainment x Fintech Consortium" with 36 major firms; Rakuten advances FinTech strategy with launch of AI-powered spending assistant on "Card Lite" app; Link Processing and Epos Card forge alliance to digitize B2B payments, targeting SME liquidity with new invoice-to-card service

• Economics: IMF backs further BOJ rate hikes to 1.5%, urges caution on proposed consumption tax holiday; JGB market shifts focus to ‘Sanaenomics’ reality, two BOJ hikes seen in 2026; Japan corporate bankruptcies hit 13-year January high as wage hikes and inflation squeeze SME

• Digital Assets: Japan’s financial giants unite for ‘native’ security token pilot; SBI Holdings breaks new ground with JPY 10bn security token bond, debuts as first listing on ODX’s ‘START’ platform; SBI Digital Markets taps global music royalties boom with record USD 30m IP-backed bond; Metaplanet CEO fires back at critics, defending bitcoin treasury strategy and financial transparency

• The Last Word: The Evolution of Alternative Data and AI Integration

Venture Capital & Private Markets

• Yuimedi secures JPY 400m to streamline medical data infrastructure with AI: Yuimedi, a health-tech startup specializing in the standardization and utilization of medical data, has raised 400 million yen (approx. $2.6 million) in a fresh funding round; the capital injection is aimed at accelerating the deployment of its AI-driven data infrastructure and expanding its footprint in both the Japanese and U.S. markets; the round was led by DG Daiwa Ventures, with significant new participation from Sumitomo Mitsui Trust Bank, HearstLab, and SMBC Venture Capital; existing investors Chiba Dojo, Incubate Fund, and D4V also participated, signaling continued confidence from early backers

• SIGQ secures JPY 123m in Pre-Series A funding led by Mizuho and SMBC: SIGQ, a developer of autonomous AI solutions for IT operations, has raised a total of 123 million yen (approx. USD $820,000) in the first close of its Pre-Series A funding round; the financing will accelerate the Go-to-Market (GTM) strategy for its flagship product, "Incident Lake," specifically targeting the enterprise sector; the round represents a hybrid financing structure comprising 93 million yen in equity via J-KISS stock acquisition rights and 30 million yen in debt financing; the equity portion was backed by major banking venture capital firms Mizuho Capital and SMBC Venture Capital; they were joined by a syndicate of nine angel investors, including current and former executives from leading Japanese tech growth companies such as PLAID, Money Forward, and PKSHA Technology

• NTT DOCOMO Ventures backs Bastion to bolster regulated stablecoin infrastructure: NTT DOCOMO Ventures, the investment arm of Japan’s leading mobile operator, has made a strategic investment in Bastion Platforms, a New York-based provider of regulated stablecoin infrastructure; the deal signals the telecommunications giant's deepening interest in integrating digital asset technologies into enterprise finance and consumer payments; as global financial institutions increasingly look to stablecoins for efficient cross-border value transfer, Bastion has positioned itself as a compliance-first solution for the enterprise sector

• HiJoJo Partners secures JPY 1bn in Series B1, completes “mega-bank trifecta” with SMBC backing: HiJoJo Partners, an independent asset management firm specializing in democratizing access to global unicorn investments for Japanese investors, has completed its Series B1 funding round; the firm raised approximately 1 billion yen via a third-party allotment, bringing its cumulative equity financing since inception to roughly 2.8 billion yen; this latest capital injection is strategically significant, marking a consolidation of support from Japan's traditional financial heavyweights; with the participation of SMBC Venture Capital in this round, HiJoJo Partners has now established capital ties with group entities representing all three of Japan’s “mega-banks”—Mizuho Financial Group, Mitsubishi UFJ Financial Group, and now Sumitomo Mitsui Financial Group

Other

• IPO-grade corporate governance policy framework: for this article, we have applied the recently updated "Preparation Guidebook for Initial Public Offerings (IPOs)", published by the Japanese Institute of Certified Public Accountants (JICPA), to generate an IPO-grade corporate governance policy framework that startups need to complete before conducting an accounting audit

Insurance

• Sompo Holdings lifts full-year outlook to record high as 3Q profit surges 47% on underwriting improvements: Sompo Holdings delivered a robust set of third-quarter results for fiscal year 2025, posting a sharp increase in profitability driven by improved underwriting margins in its domestic property and casualty (P&C) business and sustained growth in overseas operations; buoyed by lower-than-expected natural catastrophe losses and strong investment returns, the insurer has revised its full-year adjusted consolidated profit guidance upward by ¥40.0 billion to a record-breaking ¥480.0 billion

• InsurTech Profile - OdysseyAI: the intersection of generative artificial intelligence and highly regulated financial services represents one of the most critical and heavily contested growth vectors in the contemporary global enterprise software market; within this rapidly evolving paradigm, OdysseyAI, a specialized technology enterprise established in 2024 and headquartered in Tokyo, Japan, has emerged as a deeply focused entity operating at the nexus of artificial intelligence and insurance compliance; operating from its corporate headquarters situated in the Shibuya district of Tokyo, the firm explicitly positions itself as the architect and developer of Japan’s inaugural "Agentic AI" platform engineered specifically for the distinct operational and regulatory requirements of the domestic insurance sector

Banking

• MUFG Bank taps Uzabase’s Speeda to power AI-driven "Proposal Data Lake" for Corporate Banking: in a move to accelerate digital transformation within its corporate banking division, Mitsubishi UFJ Bank has secured an agreement with business intelligence platform Speeda, operated by Uzabase; the partnership involves the integration of Speeda’s proprietary economic data into MUFG Bank’s newly constructed "Proposal Data Lake," a system designed to streamline and elevate the creation of client proposals through artificial intelligence

• Hokkoku Bank integrates core lending functions into proprietary 'IBPlatform' to automate operations: Hokkoku Bank has announced the full-scale launch of integrated loan approval and execution capabilities within its proprietary "IBPlatform," marking a significant step in the regional lender’s digital transformation strategy; moving beyond the platform's initial scope as a Customer Relationship Management tool, the new update integrates directly with the bank's core banking system; this expansion allows for the seamless consolidation of sales, administrative, and accounting processes that were previously siloed

• Yamato Credit Finance partners with Moneytree to digitize SME factoring: Yamato Credit Finance, the financial subsidiary of the Yamato Transport group, has adopted the "Moneytree Verify" solution for its two-party factoring services; the integration marks a significant shift in the non-bank lending sector, moving away from static, paper-based credit assessments toward real-time, data-driven monitoring

Payments

• Digital Garage, JCB, and Resona launch in-store stablecoin payment trial: a consortium led by Digital Garage, alongside payment heavyweight JCB and Resona Holdings, announced the commencement of a proof-of-concept for stablecoin payments in physical stores, a move towards bridging decentralized finance (DeFi) with traditional retail infrastructure; starting February 24, 2026, the pilot program will test the viability of using cryptocurrency for everyday transactions at a brick-and-mortar location in Shibuya, utilizing both US Dollar-pegged (USDC) and Japanese Yen-pegged (JPYC) stablecoins

• Nudge launches "Entertainment x Fintech Consortium" with 36 major firms: Nudge, the Tokyo-based challenger in the credit card and FinTech space, has convened the inaugural meeting of the "Entertainment x Fintech Consortium," marking a significant step toward integrating financial infrastructure with the entertainment sector; the kickoff event gathered 36 leading companies, exceeding the organizer's initial recruitment targets; the consortium represents a strategic effort to foster "open innovation" by dismantling the traditional barriers between finance and the arts

• Rakuten advances FinTech strategy with launch of AI-powered spending assistant on "Card Lite" app: Rakuten Group and its FinTech subsidiary, Rakuten Card, have announced the integration of a proprietary AI agent into the Rakuten Card Lite app; the launch marks the latest step in the company’s "AI-nization" initiative, a strategic push to embed artificial intelligence across its business portfolio to drive growth and user engagement; the new tool, available on both iOS and Android platforms, is designed to leverage robust transaction data to provide a personalized financial overview for cardholders; functioning within the English-language version of the app, the AI agent allows users to query their spending habits through a conversational interface in either English or Japanese

• Link Processing and Epos Card forge alliance to digitize B2B payments, targeting SME liquidity with new invoice-to-card service: Link Processing, a subsidiary of Infcurion, has entered a business alliance with credit card issuer Epos Card to address the liquidity constraints and digital stagnation facing Japan’s small and medium-sized enterprises (SMEs); the partnership will offer a "Corporate Invoice Card Payment" service to Epos Card’s corporate holders, a solution designed to shift traditional bank transfer payments onto credit card networks, thereby extending working capital buffers for businesses

Economics

• IMF backs further BOJ rate hikes to 1.5%, urges caution on proposed consumption tax holiday: the International Monetary Fund has signaled strong support for the Bank of Japan’s ongoing policy normalization, forecasting a path toward a neutral interest rate of 1.5% by 2027, while simultaneously warning Tokyo against eroding fiscal discipline through broad tax cuts; in a press briefing following the 2026 Article IV Consultation, IMF Mission Chief for Japan Rahul Anand described the Japanese economy as showing "impressive resilience" in the face of global uncertainty and trade headwinds

• JGB market shifts focus to ‘Sanaenomics’ reality, two BOJ hikes seen in 2026: after a turbulent start to the year marked by a 27-year high in bond yields, the Japanese government bond market is beginning to stabilize as investors digest the realities of Prime Minister Sanae Takaichi’s resounding election victory; according to a new report from Sony Financial Group, the market has moved past initial fears of unchecked fiscal expansion and is now pricing in a steady ascent in interest rates driven by the administration’s "high-pressure" economic strategy

• Japan corporate bankruptcies hit 13-year January high as wage hikes and inflation squeeze SMEs: according to data provided in the Tokyo Shoko Research report for January 2026, Japanese corporate insolvencies began 2026 on a turbulent note; the total number of bankruptcies in January surged to 887 cases, marking a 5.59% year-on-year increase and the highest level for the month since 2013; while total liabilities dipped slightly by 1.34% to 119.8 billion yen ($780 million), the data reveals a shifting landscape where small and medium-sized enterprises (SMEs) are increasingly buckling under the dual pressures of persistent inflation and increasing labor costs

Digital Assets

• Japan’s financial giants unite for ‘native’ security token pilot: the Financial Services Agency has authorized a landmark pilot program involving the country’s top five financial institutions; the initiative, part of the FSA's "Payment Innovation Project", aims to test the viability of blockchain technology for the settlement of traditional book-entry securities, including government bonds and listed stocks; the pilot brings together a coalition of Japan’s financial heavyweights: Nomura Securities and Daiwa Securities, alongside the three megabanks—Mizuho Financial Group, Mitsubishi UFJ Financial Group (MUFG), and Sumitomo Mitsui Financial Group (SMFG); the collaboration marks a rare unified effort to address the structural inefficiencies of the legacy financial system

• SBI Holdings breaks new ground with JPY 10bn security token bond, debuts as first listing on ODX’s ‘START’ platform: SBI Securities has announced the upcoming sale of SBI Holdings’ inaugural security token bond, a landmark issuance valued at 10 billion yen; dubbed the "SBI START Bond," the offering represents the very first asset to be traded on the "START" proprietary trading system (PTS) operated by the Osaka Digital Exchange; the 3-year unsecured bond marks SBI Holdings' entry into the ST bond market as an issuer; while SBI Securities has been active in the space since executing Japan's first general investor STO in April 2021, this issuance utilizes the "ibet for Fin" blockchain consortium led by BOOSTRY; this infrastructure allows for the digital completion of business processes ranging from issuance to redemption, moving away from the traditional management via the Japan Securities Depository Center (JASDEC)

• SBI Digital Markets taps global music royalties boom with record USD 30m IP-backed bond: SBIDM has cemented its foothold in the burgeoning sector of Real-World Asset securitization, announcing the successful closure of Asia's largest music Intellectual Property deal for 2025; the transaction, valued at US$30 million, involves the issuance of bonds backed by a new music album and a portfolio of performing rights; the deal, finalized in early 2026, represents the Singapore-licensed firm's third commercialization of tokenized assets in a six-month period; it follows SBIDM's recent expansion into alternative asset classes, including a luxury wine RWA project launched in Korea and Thailand last September, and a tokenized money market fund introduced in Europe in May

• Metaplanet CEO fires back at critics, defending bitcoin treasury strategy and financial transparency: in a sharp rebuke aimed at anonymous detractors, Metaplanet CEO Simon Gerovich has issued a comprehensive defense of the company’s Bitcoin accumulation strategy and corporate governance, rejecting claims of opaque disclosure as "inflammatory and factually incorrect"; addressing a wave of recent online criticism, Gerovich emphasized that while it is easy for anonymous accounts to ignite controversy without consequence, Metaplanet remains committed to public accountability; the statement systematically dismantled allegations regarding the company’s disclosures, trading timing, and financial health

The Last Word: The Evolution of Alternative Data and AI Integration

The release of the 4th annual Alternative Data Factbook, produced by the Japan Alternative Data Accelerator Association (JADAA) and SOMPO Institute Plus, confirms that the market has successfully navigated its initial volatility. Survey participants have moved decisively past the "pandemic surge"—a period characterized by reactive, uncritical data acquisition—into a phase of structural and persistent demand. In 2025, the strategic context shifted towards the sophisticated integration of data into institutional workflows. This is a maturation phase where technological synergy, rather than volume alone, dictates market leadership.

The thematic analysis of this year’s findings reveals a critical shift in momentum. While 80% of institutional respondents now possess direct experience with alternative data, the era of "growth at any cost" has ended. The market has transitioned toward "strategic differentiation," where the value of a dataset is measured by its ability to provide a unique edge in an increasingly efficient environment.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published here on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

"AI is killing SaaS", or "software will be abundant and free" are the latest taglines of the AI prophets, after the path to AGI via LLMs has been discredited. Whether or not that will come true, this wave has surely induced a software bear market, and Japan has not been a safe haven. Take a look at Money Forward, for example, which is down about 50% over the past six months at the time of writing, despite the ongoing NIKKEI/TOPIX rally.

A few editions ago we noted that only weeks after SoftBank exerted itself to complete its USD 41bn investment in OpenAI, the greats of the industry were suggesting that ChatGPT’s path to super-intelligence might be a dead end. In their earnings call last week, Softbank's CFO thus was a little less committed to further OpenAI investments, suggesting "nothing has been decided." Keep a bag of popcorn at the ready.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: India’s Olyv secures USD 23m Series B to scale financial inclusion platform, SMBC Asia Rising Fund joins round; Hyperithm backs 'Cork Protocol' in $5.5M Seed Round to bolster on-chain risk management; Credit Saison bets on Brazil’s Zippi in USD 42.3m FIDC expansion to fuel micro-credit boom; the inaugural meeting of the Startup Policy Promotion Subcommittee

• Insurance: Sumitomo Life confirms improper data acquisition by seconded staff; target set to withdraw all agency secondees by March 2026

• Banking: MUFG and Krungsri forge alliance with Philippines DTI and Security Bank to accelerate ASEAN cross-border innovation; Kyndryl & IBM Japan secure deal to unify Yamaguchi FG’s regional banking systems by 2029

• Payments: PayPay has filed Form F-1 for its upcoming Nasdaq IPO; PayPay targets US market in strategic alliance with Visa, eyes California for digital wallet debut; DG Financial Technology ramps up "NESTA" operations, targeting KDDI Group payment infrastructure

• Economics: DBJ's Economic Impact Report - Maximizing the "Silicon Island" resurgence following TSMC’s entry into Kyushu; structural implications of interest rate normalization on household debt archetypes; Japan’s real wages mark fourth year of decline in 2025, but inflation cooling sets stage for 2026 rebound

• Capital Markets: the Securities and Exchange Surveillance Commission conducted a search at the main office of Mizuho Securities; JPX arm taps Snowflake to build industry-wide data hub, targeting 2027 launch

• Asset Management: Nissay Asset Management becomes first Japanese firm to digitize MBS trading with Broadridge platform

• Digital Assets: SBI Holdings targets Coinhako acquisition to expand global digital asset corridor; Standard Chartered taps B2C2 to build "connectivity layer" for institutional crypto trading

• The Last Word: Sustainability of Japanese Government Debt

Venture Capital & Private Markets

• India’s Olyv secures USD 23m Series B to scale financial inclusion platform, SMBC Asia Rising Fund joins round: Olyv, the tech-driven FinTech platform formerly known as SmartCoin, has successfully closed a USD 23 million Series B funding round; the investment was led by The Fundamentum Partnership, with significant participation from the Singapore-based SMBC Asia Rising Fund, the corporate venture capital arm of Sumitomo Mitsui Banking Corporation; the capital injection comes as Olyv continues to consolidate its position in the "Emerging India" segment, targeting young, mobile-first consumers who have historically been underserved by traditional financial institutions

• Hyperithm backs 'Cork Protocol' in $5.5M Seed Round to bolster on-chain risk management: digital asset firm Hyperithm has made a seed investment in Cork Protocol, a platform specializing in on-chain risk management; the investment is part of a larger $5.5 million (approximately 7.7 billion KRW) seed funding round co-led by crypto accelerator a16z CSX and Road Capital; the round also attracted a coalition of prominent global investors and legal firms, including BitGo Ventures, 432 Ventures, and Cooley

• Credit Saison bets on Brazil’s Zippi in USD 42.3m FIDC expansion to fuel micro-credit boom: Zippi, the Brazilian FinTech specializing in working capital for micro-entrepreneurs, has successfully closed the third issuance of its Credit Rights Investment Fund (FIDC), raising BRL 220m (approximately USD 42.3m); the transaction marks a watershed moment for the São Paulo-based firm, not only as its largest single capital injection to date but also for securing its first international backer: the Tokyo-based financial services major, Credit Saison

Other

• The inaugural meeting of the Startup Policy Promotion Subcommittee: the inaugural meeting of the Startup Policy Promotion Subcommittee, held in early February, marked a subtle shift in Japanese industrial policy; while historically the domain of the Ministry of Economy, Trade and Industry (METI), the subcommittee’s establishment under the Japan Growth Strategy Council indicates a direct Prime Ministerial mandate; operationally handled by the National Growth Strategy Bureau within the Cabinet Secretariat, this move is designed to create an alternative pathway to the bureaucracy and move the needle from quantity-based metrics—simply counting new entities—to the creation of "megaliths" capable of driving national GDP

• Evercore has published "Inside the Japanese LP mindset: Norinchukin Zenkyoren Asset Management's view on the future of Japanese alternatives"

Insurance

• Sumitomo Life confirms improper data acquisition by seconded staff; target set to withdraw all agency secondees by March 2026: Sumitomo Life Insurance Company has released the findings of an internal investigation, confirming that employees seconded to independent insurance agencies engaged in the improper acquisition of sensitive business information; the investigation, which spanned operations from April 2022 through October 2025, revealed that seconded staff transmitted proprietary data back to Sumitomo Life’s agency department using inappropriate channels, including personal smartphones and physical transfers of hard copies; according to the report, the breach affected eight agencies and involved the unauthorized transfer of 780 distinct items of information; the leaked data primarily consisted of agency insurance sales records, performance evaluation criteria for sales personnel, and confidential product information regarding other life insurance companies

Banking

• MUFG and Krungsri forge alliance with Philippines DTI and Security Bank to accelerate ASEAN cross-border innovation: Bank of Ayudhya (Krungsri) and its parent company, Mitsubishi UFJ Financial Group, have formalized a four-way strategic partnership with the Philippines’ Department of Trade and Industry (DTI) and Security Bank Corporation; the Memorandum of Understanding, executed in Manila, aims to stimulate the regional digital economy by creating a cross-border corridor for startup capital and market expansion across Japan, Thailand, and the Philippines; the collaboration leverages the balance sheets and networks of Japan’s largest financial group and Thailand’s fifth-largest lender to support the ASEAN startup ecosystem; the initiative is further backed by the banks' respective corporate venture capital arms, MUFG Innovation Partners (MUIP) and Krungsri Finnovate, signaling a concrete channel for equity investment into emerging tech firms

• Kyndryl & IBM Japan secure deal to unify Yamaguchi FG’s regional banking systems by 2029: Kyndryl and IBM Japan have been selected to lead a major modernization of Yamaguchi Financial Group’s core banking systems, a move designed to consolidate the regional lender’s IT operations into a single, unified platform; the modernization effort is targeted for completion by January 2029; according to the agreement, Kyndryl Japan will be responsible for the IT infrastructure domain and foundational management, leveraging artificial intelligence and other advanced technologies to drive the transformation; IBM Japan has been retained to support the business application side of the overhaul; Kyndryl, formerly IBM’s managed IT services business, was spun off by in late 2021

Payments

• PayPay has published Form F-1 for its upcoming Nasdaq IPO

• PayPay targets US market in strategic alliance with Visa, eyes California for digital wallet debut: PayPay Corporation has entered into a strategic partnership agreement with Visa to spearhead its international expansion, beginning with a significant entry into the United States market; the deal outlines a roadmap for PayPay’s first major global venture; the companies plan to establish a new, PayPay-led entity to develop a digital wallet specifically for the U.S. consumer; this new platform will function as a hybrid payment solution, supporting both NFC (contactless) technology and QR code payments; according to the joint statement, the U.S. rollout will initially focus on establishing a merchant network in California; both corporations have committed to contributing capital, technology, and personnel to the venture, with Visa providing additional support through consulting and its managed services programs; the launch is subject to regulatory approvals and licensure

• DG Financial Technology ramps up "NESTA" operations, targeting KDDI Group payment infrastructure: Digital Garage and its payment subsidiary, DG Financial Technology (DGFT), announced the full-scale operational launch of "NESTA," a next-generation payment platform developed in joint partnership with au Financial Service; the system has officially begun handling billing & settlement processing for the telecommunications charges of au and UQ mobile, two of Japan’s primary mobile carriers under the KDDI umbrella

Economics

• DBJ's Economic Impact Report - Maximizing the "Silicon Island" resurgence following TSMC’s entry into Kyushu: the entry of Taiwan Semiconductor Manufacturing Company (TSMC), operating through its subsidiary JASM, is a systemic catalyst for the resurgence of Kyushu’s "Silicon Island"; this transition marks a pivot from the region’s historical identity as a domestic manufacturing base toward its emergence as a high-value node in the global semiconductor value chain; however, data from the Development Bank of Japan (DBJ), published in a January report, suggests that this resurgence is characterized by a "Structural Decoupling": while macro-indicators like capital investment and land prices show exceptional growth, a gap persists in local supplier integration and regional end-user demand; to ensure long-term industrial cluster autonomy, stakeholders must address the disconnect between global manufacturing standards and local industrial capabilities; without strategic intervention, a significant portion of the economic ripple effect will continue to bypass local SMEs

• Structural implications of interest rate normalization on household debt archetypes: the Japanese mortgage market is undergoing a structural pivot as the era of ultra-low interest rates yields to normalization; floating-rate (variable) products continue to dominate the landscape, capturing approximately 84% of new originations; however, the velocity of change is increasing; while variable rates previously sat at a floor of 0.3%–0.4% during the negative interest rate era, current minimums have migrated toward the 0.6%–0.7% range; this shift is accompanied by a significant institutional bifurcation: digital banks and regional banks (particularly those in Kyushu and southern Japan) have spearheaded the move toward 50-year loan terms to preserve affordability; in contrast, mega banks have remained the conservative holdouts, generally maintaining traditional 35-to-40-year ceilings; these innovations are survival mechanisms triggered by a widening chasm between property valuations and stagnant nominal wages

• Japan’s real wages mark fourth year of decline in 2025, but inflation cooling sets stage for 2026 rebound: Japanese real wages contracted for a fourth consecutive year in 2025, though recent data signals that the country’s prolonged struggle with eroding purchasing power may be nearing an end, according to a recent report published by the Itochu Research Institute; monthly labor survey data released by the Ministry of Health, Labour and Welfare showed that inflation-adjusted real wages for the full year of 2025 fell by 1.3%, widening from the 0.3% decline recorded in 2024; while nominal cash earnings grew by 2.3%, this pace slowed compared to the previous year, weighed down by a significant deceleration in bonus growth and persistent inflationary pressure

• The ASEAN+3 Macroeconomic Research Office has published its "Annual Consultation Report" for Japan

Capital Markets

• The Securities and Exchange Surveillance Commission conducted a search at the main office of Mizuho Securities last month on suspicion that an employee had been involved in insider trading; the commission is analyzing materials seized during the search to possibly file a criminal complaint with prosecutors; on Monday, Mizuho Securities said in a statement that the commission's investigation is ongoing and that it will continue to cooperate fully with the investigation

• JPX arm taps Snowflake to build industry-wide data hub, targeting 2027 launch: JPX Market Innovation & Research (JPXI) has initiated a major overhaul of the Japanese securities industry’s digital infrastructure, announcing plans to construct a common cloud-based data platform aimed at eliminating legacy inefficiencies in back-office operations; the project, which leverages technology from data cloud company Snowflake, seeks to replace the sector’s reliance on manual data entry with an automated, standardized system; JPXI aims to open a beta environment in early 2027, with a full service launch projected for the spring

• Nomura’s new global markets strategy: less risk, more return Japan’s top dealer is moving away from risk warehousing, chasing real money clients and going global

• Franklin Templeton has published its "Japan 2026 Outlook"

Asset Management

• Nissay Asset Management becomes first Japanese firm to digitize MBS trading with Broadridge platform: Nissay Asset Management (NAM) has selected Broadridge Financial Solutions to modernize its post-trade operations, becoming the first asset manager in Japan to implement Broadridge’s Mortgage-Backed Securities Trade Assignment Portal (TAP); the announcement signals a shift in the Japanese asset management sector toward digital consolidation, specifically regarding To-Be-Announced (TBA) mortgage-backed securities; NAM will utilize the platform to automate the Assignment of Trade (AOT) process, moving away from legacy manual workflows

Digital Assets

• SBI Holdings targets Coinhako acquisition to expand global digital asset corridor: Japanese financial services giant SBI Holdings is set to significantly expand its footprint in the Southeast Asian crypto market, announcing its intention to acquire a majority stake in Coinhako, a leading Singapore-based digital asset platform; SBI confirmed that its subsidiary, SBI Ventures Asset, has signed a letter of intent with Holdbuild, the operator of the Coinhako Group; the proposed transaction involves both a fresh capital injection into Coinhako and the acquisition of shares from existing shareholders; upon completion, Coinhako is expected to operate as a consolidated subsidiary of the SBI Group

• Standard Chartered taps B2C2 to build "connectivity layer" for institutional crypto trading: Standard Chartered has entered a strategic partnership with digital asset market maker B2C2, a move designed to bridge the gap between traditional banking infrastructure and the cryptocurrency markets for institutional clients; the collaboration aims to integrate Standard Chartered’s extensive global banking and settlement "rails" with B2C2’s deep liquidity across spot and options markets; the initiative targets a sophisticated client base—including asset managers, hedge funds, and family offices—seeking to mitigate the counterparty risks and settlement friction often associated with fiat-to-crypto transactions

The Last Word: Sustainability of Japanese Government Debt

Japan's government debt rose to a record high at the end of last year. The Ministry of Finance says the outstanding government debt stood at 1,342.172 trillion yen, or about 8.6 trillion dollars, at the end of 2025. That is up by about 24.5 trillion yen from a year earlier.

A breakdown shows that government bonds stood at around 1,197.6 trillion yen, short-term financing bills at almost 100.4 trillion yen and borrowings at about 44.1 trillion yen. The government bond figure rose by more than 24 trillion yen.

The debt does not include the issuance of government bonds for the more than 18-trillion-yen supplementary budget that the Diet passed in December last year.

The balance continues to increase due to the accumulation of government bond issuances covering rising social security costs and other spending, as well as a compilation of supplementary budgets each fiscal year.

The government of Prime Minister Takaichi Sanae advocates "responsible and proactive public finances." It says it will lower the ratio of outstanding debt to GDP steadily.

However, Daniel Dowd, Global Head of Investment Research at UBS, explains: "The market’s reaction to Japan’s election result has been swift, and understandably so. With the LDP securing a decisive mandate under PM Takaichi, investors are already asking whether this opens the door to a more activist fiscal stance. JGB yields have pushed higher on the prospect of wider deficits."

"But amid the noise, it’s worth stepping back and looking at the underlying dynamics, because Japan’s debt story is more resilient than one might assume."

"Even with debt-to-GDP around 230%, the real carrying cost of that debt is among the lowest in the world. If inflation settles around 2%, 10-year JGBs at roughly 2.5%, and growth just under 1%, our projections show Japan’s debt ratio could still fall by close to 3 percentage points of GDP per year, even with a primary deficit near 2% of GDP."

"The reason is simple but often overlooked: Japan’s consolidated public sector holds substantial assets. In 2024 alone, pension funds, financial institutions and local governments held domestic equities and foreign bonds worth more than 100% of GDP, generating annual gross returns near 6% over the last decade. In effect, money is coming in faster than it’s going out, despite the high headline debt load."

"None of this removes the need for discipline. But it does mean the debate should be grounded in the full picture, not just the liability side of the balance sheet."

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

The Japanese election completely overshadowed our monumental achievement of the 150th edition of the Japan FinTech Observer, while crossing 15,000 subscriber (on LinkedIn alone, ~20,000 across platforms) 😀 we remain humble, and truly appreciate your spending time with us, thank you 🙏

With regards to Takaichi's resounding victory, we would like to offer the unpopular opinion that it is way too early, and their are too many unknowns to pass judgement. As an example, the braintrust would have it that a Takaichi win implies weakness for the Yen, and higher interest rates. At the time of writing, the Yen has actually strengthened, and rates have held steady. So let us give it a bit more time. For further analysis, we refer to the reports published by MUFG, UBS, and Eastspring. What we do know, however, are a few things:

• Takaichi is heading a party that a mere 18 months ago chose the completely inept Ishiba over her (and Kishida prior); there is lots of reform work to do, even within the LDP, but Takaichi can now draw on ~120 Diet members who owe their representation to her, no matter the fraction alignment; that confers real power

• The budget draft for the coming fiscal year was deemed quite reasonable, although additional spending might come with the "growth plan" to be published mid-year; also, "responsible and proactive public finances", as so often proclaimed by Finance Minister Katayama, require further elaboration

• Japan has a "golden" two to three years ahead of it, during which tax receipts will run ahead of (interest) expenses, providing Takaichi with some room to maneuver; using this room to drive structural change rather than short-term measures (e.g., waiving the consumption tax on food) will be the difficult part

• Last but not least, Japanese voters are less concerned about rules for surnames and same-sex marriage than they are about having a leader who is able to stand up to Trump and Xi; or even more simplified, having a leader at all, compared to Takaichi's two predecessors

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Penguin Securities pushes for expansion in Singapore and Japan; MUFG taps Ex-T. Rowe Price CIO to lead new ¥50 Billion growth fund; SSI Asset Management Company and the Development Bank of Japan launch the $90m Japan Vietnam Capital Fund; SMBC and GoAhead Ventures launch video platform to boost Japanese startups' access to capital

• Banking: quarterly results from Mizuho, MUFG, SBI Holdings, and SBI Shinsei Bank; Credit Saison launches Brazil online bank and instant digital lending in Japan

• Payments: Digital Garage enhances payment aggregation platform via AEON Pay integration; Pacific Meta, supported by KDDI and Progmat, hosted the second Japan Stablecoin Summit

• Capital Markets: Apollo says "The Yen Carry Trade Is Unwinding"; HK-based Boom Group pre-announced the launch of their Japanese brokerage; Nasdaq deepens footprint in Japan as Osaka Exchange selects Eqlipse platform for derivatives overhaul; METI reconvenes panel to clarify takeover guidelines amid shifts in legal and market landscape

• Asset Management: SBI Holdings and Startale target $19 Trillion RWA market with new Layer 1 blockchain "Strium"; Secured Finance taps UBS’s uMINT token for on-chain collateral in partnership with DigiFT; SMBC Nikko establishes dedicated DeFi unit, positioning for 2026 regulatory shift in Japan

• The Last Word: The 2025 Tokyo Financial Award innovation category winners

Venture Capital & Private Markets

• Penguin Securities pushes for expansion in Singapore and Japan: Penguin Securities has completed its Pre-Series A financing round, bringing the Singapore-based group’s cumulative funding to USD 18 million; the announcement signals a continued appetite among investors for infrastructure plays that bridge the gap between the burgeoning digital asset economy and traditional financial markets; the funding round was structured through a third-party allotment of new shares and saw participation from a slate of strategic investors, including the Mint Startup Fund II (managed by Mint Co., Ltd.), the Tokyo University of Science Investment Management Company, Thirdwave Financial, NAKASHIMATO, and UNITED, alongside several individual investors

New Funds

• MUFG taps Ex-T. Rowe Price CIO to lead new ¥50 Billion growth fund: Mitsubishi UFJ Financial Group (MUFG) and its banking subsidiaries have commenced operations of Artemis Ventures, a new general partner entity designed to manage a targeted 50 billion yen ($330 million) equity fund focused on Japan’s mid-to-late-stage startups; the banking giant has appointed Archibald Ciganer—a veteran investor formerly with T. Rowe Price Japan—as Managing Partner to lead the new firm

• SSI Asset Management Company and the Development Bank of Japan launch the $90m Japan Vietnam Capital Fund: the Development Bank of Japan (DBJ) has established a joint investment framework in Vietnam with Saigon Securities (SSI), a leading private securities firm in Vietnam; the launch comes at a pivotal moment for Vietnam’s capital market, as FTSE Russell has upgraded Vietnam to Secondary Emerging Market status and the country marks the 30th anniversary of the State Securities Commission, reflecting significant progress in market standardization, integration, and the enhancement of the quality of the capital market

Other

• SMBC and GoAhead Ventures launch video platform to boost Japanese startups' access to capital: Sumitomo Mitsui Financial Group (SMBC Group) is deepening its engagement with the global venture capital ecosystem, launching a new video pitch platform designed to connect Japanese seed-stage startups with institutional capital; the initiative, launched in collaboration with Silicon Valley-based GoAhead Ventures, aims to democratize access to funding by removing traditional geographical and networking barriers; according to the banking group, the platform is a Japan-adapted version of a system GoAhead currently operates in the United States, which processes over 3,000 applications annually; by digitizing the pitch process, SMBC aims to provide equitable opportunities for entrepreneurs regardless of their location within Japan

Banking

• Quarterly results from Mizuho, MUFG, SBI Holdings, and SBI Shinsei Bank

• Credit Saison launches Brazil online bank and instant digital lending in Japan: in a dual-pronged strategy to combat a saturated domestic market and capitalize on global FinTech adoption, Japanese financial services group Credit Saison has announced a major expansion of its international footprint alongside a targeted new product launch in Japan; the Tokyo-based credit card issuer confirmed this week that it plans to launch a full-scale online banking business in Brazil later this year, while simultaneously rolling out a new digital-first credit card in Japan designed to meet the immediate liquidity needs of consumers facing inflationary pressures

Payments

• Digital Garage enhances payment aggregation platform via AEON Pay integration: DG Financial Technology (DGFT), the payment processing subsidiary of Digital Garage (TSE Prime: 4819), has expanded its unified QR code payment solution, "Cloud Pay," to include support for "AEON Pay"; this integration connects DGFT’s merchant network with the extensive user base of AEON Financial Service; by enabling acceptance of AEON Pay, which reported a membership base exceeding 10.3 million as of November 2025, DGFT aims to significantly broaden the addressable market for its participating merchants

• Pacific Meta, supported by KDDI and Progmat, hosted the second Japan Stablecoin Summit on February 3, 2026; read our event reports on "Outlook for the Domestic Stablecoin Market in 2026", "Stablecoin Use Cases in Japan", "What Impact have Stablecoins had in the World?", and "What is the Biggest Barrier to Stablecoin Adoption?"

• Mori Hamada have published their latest Financial Regulation Newsletter, covering "2025 Amendment to the Payment Services Act - Cross-Border Collection Agency Services"

Economics

• Leika Kihara has published "Rhetoric Analysis: demystifying Bank of Japan Governor Haruhiko Kuroda’s monetary experiment"

• Markus Heckel et al have published "The effectiveness of monetary policy: Evidence from market operation-based monetary policy indices"

Capital Markets

• Apollo says "The Yen Carry Trade Is Unwinding": bank balance sheet data show that yen lending to offshore financial centers and non-bank borrowers remains elevated, suggesting a large stock of yen-funded positions; by contrast, speculative futures positioning has swung sharply, highlighting that carry trades can unwind quickly even as the broader yen-funded footprint remains in place

• HK-based Boom Group pre-announced the launch of their Japanese brokerage: previously part of Monex Group, Monex divested its entire holding in Boom Securities in June 2024 "in order to concentrate and select management resources"

• Nasdaq deepens footprint in Japan as Osaka Exchange selects Eqlipse platform for derivatives overhaul: the Osaka Exchange (OSE)—a subsidiary of the Japan Exchange Group—has selected Nasdaq (NDAQ) to provide the technology backbone for its next-generation derivatives platform; under the agreement, OSE will deploy Nasdaq’s Eqlipse Trading and Market Surveillance platforms; the deal represents a significant modernization effort for the Japanese exchange, designed to improve latency performance and scalability while integrating artificial intelligence to monitor market integrity

• METI reconvenes panel to clarify takeover guidelines amid shifts in legal and market landscape: Japan’s Ministry of Economy, Trade and Industry (METI) is reconvening the Fair Acquisition Study Group, a move aimed at revisiting the country’s corporate takeover framework; the decision comes in response to growing concerns regarding market interpretation of existing rules and follows significant statutory changes to Japan’s financial laws; the ministry originally formulated the "Guidelines for Corporate Takeovers" in August 2023 to foster a fairer M&A environment and enhance corporate value; however, METI officials acknowledged that despite increasing public attention, there is apprehension among stakeholders that the "purpose of the Guidelines may not be sufficiently understood"; the reconvened group aims to bridge this communication gap and ensure the intent of the framework is properly disseminated across the market

Digital Assets

• SBI Holdings and Startale target $19 Trillion RWA market with new Layer 1 blockchain "Strium": Japanese financial services giant SBI Holdings and Web3 infrastructure firm Startale Group have formally unveiled "Strium," a joint venture aimed at establishing a dominant blockchain infrastructure for the Asian capital markets; the project represents the first major deliverable from the strategic partnership the two entities formed in August 2025; Strium is being positioned as an institution-grade Layer 1 blockchain specifically architected for the trading and settlement of tokenized securities and Real-World Assets (RWAs)

• Secured Finance taps UBS’s uMINT token for on-chain collateral in partnership with DigiFT: Secured Finance AG, the Japanese-founded, Swiss-based developer of the Secured Finance DeFi protocol, has integrated tokenized real-world assets (RWAs) into its lending platform, marking a significant step in bridging traditional capital markets with decentralized finance; under the new partnership with DigiFT, a regulated exchange for real-world assets, users can now pledge "uMINT"—UBS Asset Management’s tokenized money market fund—as eligible collateral; this integration allows investors to unlock on-chain liquidity in stablecoins such as USDC and JPYC while maintaining exposure to high-quality, short-duration traditional assets

• SMBC Nikko establishes dedicated DeFi unit, positioning for 2026 regulatory shift in Japan: SMBC Nikko Securities has established a "DeFi Technology Department" to capitalize on Japan’s evolving digital asset landscape; the new division is tasked with spearheading the brokerage’s expansion into decentralized finance (DeFi) and crypto asset services, anticipating major legislative overhauls expected later this year; the creation of the department comes as the Japanese Diet prepares to deliberate revisions to the Financial Instruments and Exchange Act; these proposed changes are expected to reclassify crypto assets as a new category of securities, effectively greenlighting banking group subsidiaries to hold, issue, and trade digital assets for investment purposes; additionally, outlined tax reforms now expected to come into effect in 2028—specifically a shift toward separate taxation for certain crypto assets—are projected to significantly improve the liquidity and attractiveness of the domestic market

The Last Word: The 2025 Tokyo Financial Award innovation category winners

The 2025 Tokyo Financial Award winners—Impact Circle, Clarity AI, Japan Asset Management Platform Group, Myna Wallet, EduCare, and Henry could provide functional components of a broader structural reorganization of the Japanese financial landscape. As the Tokyo Metropolitan Government intensifies its "Global Financial City: Tokyo" initiative, these six innovators provide a comprehensive roadmap for addressing Japan’s most pressing structural challenges: an aging demographic, chronic labor shortages in critical sectors, the activation of a $14 trillion household asset pool, and the digitalization of national identity.

The 2025 cohort reflects a sophisticated integration of artificial intelligence, blockchain-based sovereign identity, and novel credit modeling designed to bridge the gap between financial capital and social utility. By examining their founding histories, venture capital trajectories, and market positioning, it becomes clear that the Tokyo Financial Award has the potential to signal which technologies will define the next decade of Japanese finance.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published here on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

The one hundred-fiftieth edition will arrive in your inbox post the February 8 election.

If you are looking to meet in person this week, you will find us at the Japan Stablecoin Summit No. 2, the JBA Meetup 2026, and the Tokyo Asset Management Forum.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Sony Innovation Fund bets big on infrastructure as Talos secures $1.5 Billion valuation in Series B expansion; Startale Group secures 2 Billion Yen Series A investment from Sony Innovation Fund to accelerate vertical integration of Soneium blockchain ecosystem; enechain secures 5.05 Billion Yen in Series B extension as trading volume tops 3 Trillion Yen; SMBC’s U.S. venture arm expands portfolio with bet on BaaS provider Synctera; Paytner secures 2.7 Billion Yen in non-dilutive debt financing via Mizuho-arranged syndicated loan

• Banking: MUFG Bank deploys LayerX’s AI platform to streamline management of complex financial products; ITFOR accelerates receivables management via PAYSLE integration, digitizing convenience store payments to shorten collection cycles; Sumitomo Mitsui Financial Group's third quarter financial results

• Payments: Omise taps Visa’s token tech to combat fraud and boost approval rates for Thai merchants

• Capital Markets: Nomura's third quarter financial results

• Asset Management: Japan Post Bank consolidates asset management arms; Morningstar's analysis of the NISA market; SBI Global Asset Management third quarter financial results

• Digital Assets: Sumitomo targets stablecoins and trade finance with new blockchain infrastructure division; Laser Digital files for de novo bank in the US

• The Last Word: Startup Ecosystem Notes

Venture Capital & Private Markets

• Sony Innovation Fund bets big on infrastructure as Talos secures $1.5 Billion valuation in Series B expansion: Talos has successfully closed a $45 million extension to its Series B financing, bringing the total round to $150 million; the injection of capital propels the company’s valuation to approximately $1.5 billion, underscoring the market’s appetite for institutional-grade digital asset infrastructure; for the Sony Innovation Fund, joining this round alongside heavyweights like Robinhood Markets, IMC, and QCP is a strategic endorsement of the evolving financial stack; as the convergence of traditional finance and digital assets can be observed, Sony's investment thesis centers on backing the foundational technology that makes this transition seamless, secure, and scalable

• Startale Group secures 2 Billion Yen Series A investment from Sony Innovation Fund to accelerate vertical integration of Soneium blockchain ecosystem: Startale Group has announced the successful first close of its Series A funding round, securing approximately JPY 2bn in additional capital from the Sony Innovation Fund; this latest injection underscores a deepening strategic alliance between the web3 infrastructure firm and the Japanese conglomerate, aimed at establishing a robust global infrastructure where entertainment, intellectual property (IP), and artificial intelligence intersect; this Series A financing builds upon a foundational partnership established during Startale’s seed round in September 2023, which saw an initial ¥500 million investment from Sony; since then, the collaboration has expanded significantly, most notably through the formation of Sony Block Solutions Labs (SBSL), a joint venture developing "Soneium," an Ethereum Layer-2 blockchain

• enechain secures 5.05 Billion Yen in Series B extension as trading volume tops 3 Trillion Yen: enechain Corporation has successfully closed its Series B extension round, raising a total of ¥5.05 billion; the financing was structured through a combination of third-party private placement and additional long-term debt financing (including refinancing) from multiple major banks; Coreline Ventures returned as the lead investor for this round; the capital injection also saw support from major financial partners, including joint venture backing from MUFG Bank and Sumitomo Mitsui Banking Corporation (SMBC)

• SMBC’s U.S. venture arm expands portfolio with bet on BaaS provider Synctera: the SMBC Fin Atlas Beyond Fund, a U.S.-focused corporate venture vehicle operated by Sumitomo Mitsui Banking Corporation in partnership with Fin Capital, has executed its second portfolio investment, backing Banking-as-a-Service (BaaS) platform Synctera; the fund co-led the strategic financing round alongside the National Bank of Canada, signaling continued institutional appetite for infrastructure layers within the FinTech ecosystem

• Paytner secures 2.7 Billion Yen in non-dilutive debt financing via Mizuho-arranged syndicated loan: Paytner, a FinTech firm specializing in factoring services for freelancers, has closed a 2.7 billion yen syndicated loan agreement to fortify the company’s balance sheet without diluting equity, supporting its rapid transaction volume growth; the financing takes the form of a term loan involving a syndicate of major financial institutions; Mizuho Bank served as the arranger, with participation from the UPSIDER BLUE DREAM Growth Fund 2 (a limited liability investment partnership), Fukoku Mutual Life Insurance Company, The Shoko Chukin Bank, and The Yamanashi Chuo Bank

Not FinTech

• SMBC Edge deploys 3 Billion Yen into five startups in initial push to revitalize Japanese innovation: SMBC Edge, a strategic subsidiary of the Sumitomo Mitsui Banking Corporation (SMBC) Group, has executed approximately ¥3 billion in capital investments across five domestic startups; this marks the first major deployment of capital from the “SMBC Edge Fund I, L.P.,” which was established in October 2025 to accelerate the creation of new industries in Japan

• Zettabyte secures Headline Asia backing to target Japan’s booming AI infrastructure market: AI computing firm Zettabyte has secured a strategic investment from venture capital firm Headline Asia to fund its expansion into the burgeoning Japanese AI infrastructure market; the undisclosed capital injection will be used to scale zWARE™, Zettabyte’s proprietary GPU infrastructure software, and advance "TITAN," the company’s dedicated AI data center expansion initiative in Japan; the move capitalizes on a critical new build cycle in Japan's tech sector, which is currently grappling with high enterprise demand for AI compute power and significant constraints on the local power grid

New Funds

• Japan’s ANRI targets 30 Billion Yen for sixth seed fund and unveils balance-sheet pre-seed initiative: ANRI, a Tokyo-based independent venture capital firm, has established "ANRI Fund No. 6," an investment vehicle with a targeted final corpus of 30 billion yen; the firm also disclosed the launch of the "ANRI Pre-Seed Program," a strategic initiative funded directly from the firm’s balance sheet designed to support founders facing high levels of uncertainty; building on the momentum of its predecessor, Fund No. 6 aims to be one of Japan’s largest seed-stage funds; the vehicle will maintain the firm's broad investment mandate, deploying capital across sectors ranging from consumer internet services to life sciences and deep tech

Banking

• Japanese megabanks could increase their net interest margins over the next two years, diverging from a trend across Asia-Pacific, as the nation's central bank is expected to further raise interest rates, according to S&P Global; all four Japan-based lenders among the 25 largest banks by assets in the region are projected to post gains in net interest margin (NIM) in calendar years 2026 and 2027, according to Visible Alpha estimates

• MUFG Bank deploys LayerX’s AI platform to streamline management of complex financial products: Mitsubishi UFJ Bank (MUFG Bank) has adopted LayerX's "Ai Workforce" platform to overhaul operations within its Solution Products Division (SPD); the implementation marks a significant shift toward digitizing the lifecycle of highly specialized financial instruments, from initial proposals through to mid-term management

• Japan's MUFG has seen a surge in interest from Japanese automakers hoping to tap its 20% stake in Indian non-bank lender Shriram Finance Limited to boost sales in the fast-growing Indian market, an MUFG executive said; India has become a major investment focus for MUFG - Japan's largest banking group - and for clients such as Toyota Motor Corporation, with business generated through the Shriram investment potentially lifting profitability across the group, Yasushi Itagaki, head of MUFG's global operations, told Reuters in an interview

• ITFOR accelerates receivables management via PAYSLE integration, digitizing convenience store payments to shorten collection cycles: ITFOR (TSE Prime: 4743), a leading provider of financial IT solutions, has integrated DSK Payment’s electronic barcode solution "PAYSLE" into its automated payment guidance service, "Pay Collect"; companies can now send electronic barcodes directly to a debtor's smartphone via SMS or email; this eliminates the need for physical payment slips, allowing end-users to settle payments immediately at convenience stores

• Sumitomo Mitsui Financial Group's third quarter financial results: Sumitomo Mitsui Financial Group (SMBC Group) continues to demonstrate exceptional momentum as of the third quarter of FY3/2026, benefiting significantly from the normalization of the Japanese macro-financial landscape; the results through December 31, 2025, indicate a robust transition into a higher-interest-rate environment, with top-line growth fueled by domestic margin expansion and disciplined corporate lending; while the headline figures suggest record-breaking pace, a deeper analysis reveals a divergence between core operating performance and bottom-line results propped up by strategic asset divestments

Payments

• Omise taps Visa’s token tech to combat fraud and boost approval rates for Thai merchants: global payments giant Visa and Southeast Asian payment gateway Omise have announced a strategic partnership to fortify Thailand’s digital commerce infrastructure; the collaboration introduces Visa’s Network Token solution to the Thai market, a technological shift aimed at mitigating online fraud while simultaneously increasing transaction approval rates for local merchants; for Omise, Japanese-founded in 2013 and now a dominant player in the APAC region, the integration represents a continued push to provide enterprise-grade infrastructure to merchants in Thailand, Singapore, Malaysia, and Japan

Note

• Having had the opportunity to celebrate Alpaca's unicorn status at the Tokyo FinTech Meetup last week, we highlight Omise as another Japanese-founded, but headquartered outside of Japan unicorn - its latest funding round in 2022, a $120 million Series C+, was executed at a unicorn valuation; the third player in this club is Gojo & Company, which is actually headquartered in Japan, but conducts its social lending business primarily in developing markets (last funding round a Series F in October 2024, valuing the firm at $880 million); according to the NEXT Unicorn Ranking, there is not another domestic FinTech company that comes anywhere near the unicorn level

Capital Markets

• Nomura's third quarter financial results: Nomura Holdings’ third-quarter results for the fiscal year ending March 31, 2026, provide a clear validation of the firm’s "2030 Management Vision"; achieving a Return on Equity (ROE) of 10.3%, the group has now successfully met its 8%–10% target range for the seventh consecutive quarter; the defining metric of this period is the record-breaking pretax income from the four core business segments, which reached Y142.9 billion—the highest level in eighteen and a half years; this performance signals a decisive pivot away from historical reliance on volatile market swings toward a diversified, resilient earnings model

• The Ministry of Finance - Japan has published its "JGB Newsletter January 2026"

• Eastspring sees "Value in Japan amid yen strength and higher yields"

• UBS provides "JPY and JGBs: Facts versus fears"

Asset Management

• Japan Post Bank consolidates asset management arms: Japan Post Bank announced a strategic reorganization of its asset management subsidiaries, resolving to merge JP Asset Management and Japan Post Investment to form a unified entity aimed at bolstering the group’s investment capabilities; the new entity, to be named Japan Post Bank Asset Management, will launch on April 1, 2026, following an absorption-type merger in which JP Asset Management will survive and Japan Post Investment will be dissolved

• Morningstar's analysis of the NISA market: the year 2025, the second following Japan's landmark NISA reforms, saw a massive and steady flow of capital into the market, with total net inflows reaching approximately ¥14.2 trillion; however, this headline figure masks the year's defining characteristic: a profound qualitative shift in how that capital is being allocated. 2025 was the year the Japanese retail investor's behavioral maturity began to catch up with the NISA system's ambitious structural evolution; the two pivotal trends were the strategic expansion of the NISA framework to encompass all generations and a tangible shift in investor behavior towards diversification and long-term discipline; Morningstar's report analyzes these developments by dissecting NISA system amendments and examining detailed 2025 fund flow data to provide a comprehensive outlook for financial professionals

• SBI Global Asset Management third quarter financial results: SBI Global Asset Management (SBIGAM) has delivered a historic quarter, achieving record-breaking financial results and successfully executing key strategic initiatives; these outstanding achievements are the culmination of a consistent, long-term strategy focused on delivering superior value through innovation, scale, and customer trust; the results from this quarter unequivocally validate SBIGAM's strategic direction and operational excellence

Digital Assets

• Sumitomo targets stablecoins and trade finance with new blockchain infrastructure division: Sumitomo Corporation, one of Japan’s leading general trading houses, is deepening its footprint in the digital asset infrastructure space; the conglomerate announced the launch of its Blockchain Node Operation Initiative, a move designed to integrate decentralized technology into its core business lines, ranging from trade finance to energy; in collaboration with its IT subsidiary SCSK, Sumitomo has commenced node operations on major public and enterprise ledgers, including Ethereum, Avalanche, and the Canton Network; by running nodes—the critical infrastructure responsible for validating transactions and maintaining network consensus—Sumitomo is effectively positioning itself as a stakeholder in the governance and security of these ecosystems

• Laser Digital Americas Group Holdings has filed a de novo application to the Office of the Comptroller of the Currency (OCC) to form Laser Digital National Trust Bank (LDNTB), a proposed National Trust Bank focused on digital assets, offering custody and spot trading services; if approved, the charter will position LDNTB to serve institutional customers across the U.S., offering custody of digital assets, integrated with spot trading of crypto and fiat currencies, as well as staking of eligible custodied digital assets; LDNTB will also offer custody of U.S. government securities

• Mori Hamada & Matsumoto's latest Financial Regulation Newsletter covers the "Publication of the Working Group Report on the Crypto-Asset Regulatory Framework" in great detail

The Last Word: Startup Ecosystem Notes

This week, we highlight three startup ecosystem report, of which the StartupBlink "Innovators Business Environment Index" provides a global ranking, Speeda takes a look at the domestic startup funding landscape in 2025, and Yoii projects out into 2026 through a survey of venture capitalists and startup founders.

According to StartupBlink's "Innovators Business Environment Index (IBEI) 2026", Japan has secured a formidable position on the world stage, ranking 8th globally and 2nd in the Asia-Pacific region. This top-tier standing places Japan among the world's most attractive destinations for innovative enterprises. Japan's top-10 position warrants a closer look at the specific factors driving its success and how it navigates the competitive landscape of one of the world's most dynamic economic regions.

According to Speeda's "Japan Startup Finance 2025" report, the Japanese startup ecosystem entered 2025 in a phase of consolidation and strategic re-evaluation. Top-level funding metrics serve as a critical barometer for the health of this ecosystem, reflecting aggregate investor confidence and the overall capacity for innovation. Understanding these macro trends is the first step in identifying the underlying currents shaping capital allocation, from early-stage ventures to mature, scale-up enterprises. The data from 2025 reveals a market characterized by stability at the surface, but with significant shifts occurring in how capital is being deployed.

Yoii has analyzed the 2026 funding landscape for Japanese startups based on a survey of 100 companies and venture capitalists. While both groups agree that 2025 was a difficult year, venture capitalists maintain a more optimistic outlook for the future than entrepreneurs. A significant perception gap exists regarding priorities: startups focus on product development, whereas investors prioritize the competence of the management team. The data suggests an increasing market polarization, where capital is concentrated in high-potential sectors like AI and deep tech. To succeed, startups are encouraged to improve capital efficiency and explore diverse financing methods beyond traditional equity. These insights serve as a strategic guide for navigating a climate of stricter investor selectivity and evolving exit expectations.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published here on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

As widely expected, the Bank of Japan did not change the policy rate at the Monetary Policy Meeting last week. Amir Anvarzadeh of ASYMMETRIC ADVISORS commented on CNBC that the Bank of Japan should raise interest rates by 50 basis points to rescue the Yen, but the window for them to do so has closed and thus they will continue to commit policy errors. The The Wall Street Journal's Aaron Back thinks investors shouldn’t panic over Japan’s bond market turmoil. NRI Group's Tetsuya Inoue issued his latest Financial Market Notes after Ueda's press conference. And later, during the New York trading day, the Yen started a strengthening move that has taken it to the mid-153 level at the time of writing. Is Mrs Watanabe glue do her FX trading screen, taking advantage of these moves?

Lower House elections will take place on February 8. Please show me another country that is able to pull off the logistics for a nationwide poll with two weeks' notice.

The "labor market shortage" has reached a level that actually forces organizations to re-think their processes. Hyakugo Bank discovers that employees are actually "human capital", and why show them the door at 55 years old? Mizuho Securities hires "Devin," an autonomous AI software engineer created by Cognition AI. Fiserv & Sumitomo Mitsui Card, as well as Fujitsu and Mizuho plan to modernize the payments & data infrastructure for SMEs. Keep going!

Literally weeks after SoftBank exerted itself to complete its investment in OpenAI, the greats of the industry are suggesting that ChatGPT's path to super-intelligence might be a dead end. Even Yann LeCun said so, to Gary Marcus' delight. So how much is OpenAI really worth?

Here is what we are going to cover this week:

• Venture Capital & Private Markets: SMBC’s $15m bet on Aerem signals maturity in India’s solar FinTech market; Incubate Fund Asia leads Intellend Technologies' USD 1.2m seed round to build the ‘pipes’ for India’s USD 530bn credit gap

• Insurance: Authlete tapped by MS&AD insurers to overhaul digital identity infrastructure; Japanese insurer Tokio Marine secures minority interest in Igloo

• Banking: Progress in Japan - Hyakugo Bank stops shooting itself in the foot; Forging Resilience - the future of business continuity in Japan's financial sector

• Payments: LINE NEXT taps JPYC for integration into messaging giant’s upcoming stablecoin wallet; Ocean debuts world’s first LINE-integrated tax refund system ahead of Japan’s regulatory overhaul; Xsolla deepens Japanese market penetration via strategic partnership with BNPL giant Paidy; Fiserv and SMCC partner to digitize Japanese SMBs ahead of 2030 cashless goals; Fujitsu and Mizuho target SME efficiency crisis with automated payment and data platform

• Capital Markets: SBI Holdings targets disruption of Japan’s Prime Brokerage market with $50m strategic stake in U.S. FinTech Clear Street; Mizuho Securities taps Cognition AI for autonomous AI engineer ‘Devin’

• Asset Management: Morningstar's analysis of the Japanese Asset Management industry

• Digital Assets: Daiko Labs wins the SMBC Nikko track at Protocol Camp

• The Last Word: Election Math

Venture Capital & Private Markets

• SMBC’s $15m bet on Aerem signals maturity in India’s solar FinTech market: Mumbai-based Aerem Solutions has secured $15 million in a Pre-Series B round led by the SMBC Asia Rising Fund; while the deal size may appear modest against the backdrop of global infrastructure finance, its strategic implications are profound, marking the intersection of Japanese institutional capital’s search for yield and India’s aggressive decarbonization targets (also available as presentation slides)

• Incubate Fund Asia leads Intellend Technologies' USD 1.2m seed round to build the ‘pipes’ for India’s USD 530bn credit gap: Intellend Technologies Advisors has successfully closed a USD 1.2 million (approx. INR 10.6 crore) seed funding round; the transaction was led by Japanese venture capital firm Incubate Fund Asia, known for its thesis-driven approach to infrastructure; the syndicate also saw strategic participation from Singapore-based M Venture Partners (MVP), the alumni-network-driven Atrium Angels, and marquee angel investor Dhananjay Tiwari; Intellend Technologies is one of the leaders in the structural pivot in India’s fintech landscape, from consumer-facing payments to B2B credit infrastructure; the deal underscores a "flight to quality" among investors, with the focus shifting away from high-burn consumer apps towards sustainable, compliance-heavy B2B infrastructure providers

Insurance

• Authlete tapped by MS&AD insurers to overhaul digital identity infrastructure: two MS&AD Insurance Group subsidiaries—Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance—have adopted the Authlete backend service to implement OpenID Connect (OIDC) across their customer platforms; the deployment, executed by the group’s IT arm MS&AD Systems, enables secure, high-speed data linkage and Single Sign-On (SSO) functionality between the insurers’ mobile applications and their web-based policyholder portals

• Japanese insurer Tokio Marine secures minority interest in Igloo: Japanese insurance heavyweight Tokio Marine has acquired a minority stake in Singaporean InsurTech startup Igloo, investing $5 million as it seeks to fortify its digital presence in Southeast Asia’s high-growth markets; the transaction secures the insurer a 1.65% equity stake in Igloo (formerly Axinan), confirming earlier reporting by DealStreetAsia; the move places Tokio Marine on a capitalization table that already features prominent backers including Openspace Ventures, Cathay Innovations, Blue Orchard, and FinnFund

• Global investment firms including Singapore’s sovereign wealth fund GIC and SoftBank Vision Fund are seeking South Korean investors as they look to sell their stakes in VNLife, a Vietnamese FinTech firm; VNLife’s enterprise value is estimated at $1 billion; the market value of the 40 percent stake is estimated at roughly 580 billion won ($401 million)

Banking

• Progress in Japan - Hyakugo Bank stops shooting itself in the foot: in an inspired move, Hyakugo Bank is bringing its personnel system into the 21st century; after the first quarter of said century has already passed, Hyakugo Bank has discovered a fundamental commitment to the people who are the bank's foundation, reshaping how they are supported, developed, and rewarded for the future

• Forging Resilience - the future of business continuity in Japan's financial sector: the latest Financial System Report Annex analyzes the evolution of business continuity management (BCM) within the Japanese financial sector, drawing on key findings from the Bank of Japan's comprehensive 2025 survey of 381 financial institutions; it provides a data-driven assessment of the industry's current state of readiness, comparing preparedness levels against a similar survey conducted in 2014 (!); furthermore, it examines the transformative impact of the COVID-19 pandemic, which served as a real-world stress test for long-duration crises

Payments

• LINE NEXT taps JPYC for integration into messaging giant’s upcoming stablecoin wallet: JPYC Inc., the issuer of the yen-pegged stablecoin JPYC, has signed a Memorandum of Understanding with LINE NEXT, the U.S.-based Web3 subsidiary of tech conglomerate LINE Yahoo; the partnership explores the integration of the JPYC stablecoin into a new digital wallet planned for the LINE app; the initiative represents a significant push to transition stablecoins from speculative crypto-assets into practical tools for daily transactions and reward systems within Japan’s dominant messaging ecosystem

• Ocean debuts world’s first LINE-integrated tax refund system ahead of Japan’s regulatory overhaul: Tokyo-based FinTech startup Ocean has officially launched the "Tax-Free LINE Mini App" in order to capitalize on Japan’s booming inbound tourism market and impending regulatory shifts; the service, which the company claims is a global first, integrates tax-free refund processing directly into the LINE messaging platform, eliminating the need for tourists to download standalone applications

• Xsolla deepens Japanese market penetration via strategic partnership with BNPL giant Paidy: global video game commerce platform Xsolla has moved to strengthen its transactional infrastructure in the Japanese market, announcing a strategic integration with Paidy, the country’s dominant Buy Now, Pay Later (BNPL) provider; the partnership integrates Paidy directly into Xsolla Pay Station, allowing game developers to offer card-free checkout options to millions of Japanese consumers; this move is designed to reduce transaction friction and capitalize on the rapid shift toward alternative credit solutions in the region’s digital economy

• Fiserv and SMCC partner to digitize Japanese SMBs ahead of 2030 cashless goals: Fiserv (NASDAQ: FISV) is deepening its presence in the Asia-Pacific region, announcing a strategic partnership with Sumitomo Mitsui Card Company (SMCC) to introduce its flagship Clover point-of-sale capabilities to the Japanese market; the agreement aims to deploy the Clover suite—an integrated payment and business management platform—to millions of small and mid-sized businesses (SMBs) across Japan’s retail, dining, and professional service sectors; the commercial launch is slated for late 2026

• Fujitsu and Mizuho target SME efficiency crisis with automated payment and data platform: Fujitsu and Mizuho Bank have entered into a strategic collaboration aimed at overhauling the fragmented infrastructure of business-to-business (B2B) transactions in Japan; the partnership seeks to introduce a new order and payment processing service designed to streamline operations for Small and Medium-sized Enterprises (SMEs), aimed at cutting manual administrative workloads by as much as 70%

Capital Markets

• SBI Holdings targets disruption of Japan’s Prime Brokerage market with $50m strategic stake in U.S. FinTech Clear Street: SBI Holdings has announced a strategic partnership with U.S.-based FinTech infrastructure firm Clear Street Group; the agreement includes a $50m strategic investment by SBI into the New York-based firm and outlines plans to establish a joint venture in Japan; the deal highlights SBI’s ambition to break the oligopoly currently held by major foreign financial institutions over Japan’s prime brokerage sector; currently, domestic access to comprehensive prime brokerage services—essential for hedge funds and institutional investors—is limited; the market relies heavily on legacy systems that lack automation and predominantly cater to large-scale market makers, effectively locking out emerging funds and individual investors

• Mizuho Securities taps Cognition AI for autonomous AI engineer ‘Devin’: Mizuho Securities has successfully deployed "Devin," an autonomous AI software engineer, created by US-based Cognition AI; the initiative was led by ULS Consulting and marks the first large-scale adoption of the technology by a major Japanese financial institution, signaling a significant shift toward AI-driven development in the country's securities broking sector

• NLI Research has published "Investors Trading Trends in Japanese Stock Market: An Analysis for 2025"

Asset Management

• Morningstar's analysis of the Japanese Asset Management industry: the Japanese asset management industry, long characterized by the dominance of large, domestic financial conglomerates, is in the midst of a profound transformation; a confluence of regulatory reforms, shifting investor preferences, and the emergence of new product categories is reshaping the competitive dynamics; for any professional seeking to navigate or compete in this evolving market, a clear understanding of these forces is no longer optional—it is critical; this analysis deconstructs the key trends, competitive hierarchy, and performance metrics that define the landscape today (also available as presentation slides)

Digital Assets

• Daiko Labs wins the SMBC Nikko Track at Protocol Camp: the SMBC Nikko Track challenged teams to rethink the future of finance by combining Web3 and AI to build smarter, more efficient DeFi systems that work in real market conditions; Daiko is a vibe trading app, often described as Cursor for trading; based on a user’s portfolio composition and risk appetite, AI agents deliver tailored trading signals; users can bring their own prompts or copy proven strategies, with alerts spanning memecoins, technical analysis, and macro conditions

The Last Word: Election Math

There are 465 seats at stake in the Lower House elections, with some thresholds holding significance. With 233 seats, either the LDP alone, or in coalition with Ishin, would reach a simple majority. A two-thirds majority of 310 seats would allow them to over-ride the Upper House, where they will be in the minority until the 2028 election (unless some strange new coalition emerges from the February 8 poll).

In between those two markers, a "stable majority" of 243 seats would allow them to nominate the heads of all committees, and an "absolute stable majority" of 261 would allow them to not only nominate the heads of all committees, but also have the majority in them. So please keep these two numbers in mind.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

A unicorn was born through Alpaca's latest funding round. As if we knew this was coming, we are pleased to announce that Co-Founder & Chief Product Officer Hitoshi Harada will join the next Tokyo FinTech Meetup on Wednesday, February 28. To get your opportunity to "touch a unicorn", please request an invite via our Luma page.

Japan will go to the polls on February 8. While Takaichi's decision was expected, the timing surprised, with most pundits forecasting such decision either post-FY2026 budget agreement in March/April, or post the current Diet session, which ends in June. Outside of the budget, the agreement to issue deficit-financing JGBs expires in March. Recent iterations have seen it extended for five years, although it might now become a bargaining chip for the election, with some candidates advocating for a one year term.

Lastly, central bankers around the world have declared their solidarity with Federal Reserve Chair Powell. Ueda declined to sign.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Alpaca secures unicorn status with USD 1.15bn valuation following USD 150m Series D; SMBC Fin Atlas Beyond Fund makes inaugural bet on AI security firm WitnessAI; Minerva Growth Partners targets ¥20 Billion for second fund to deepen crossover strategy in Japan; Mercuria and Daiwa break new ground with Japan’s first open-ended aircraft fund targeting ¥150 Billion

• Insurance: Nippon Life Insurance Company's tender offer for Medical Data Vision; Prudential Japan CEO resigns as internal probe reveals financial misconduct involving over 100 employees

• Banking: Money Forward reports full FY2025 results; SMBC launches Japan’s first credit card-based foreign currency accumulation service to court retail investors; Fujitsu and Standard Chartered unveil roadmap for Qubitra, a JV for quantum commercialization in Finance; Infcurion tapped by SMBC Group to power invoice digitization and card payment features in corporate finance platform ‘Trunk’; the Reserve Bank of India (RBI) has given SMBC Group initial approval to establish a wholly-owned subsidiary

• Payments: JPYC bridges the gap to retail - Yen-pegged stablecoin to power touch payments via Japan’s national ID system; Digital Garage, JCB, and Resona Holdings form strategic alliance to mainstream stablecoin payments in Japan; Binance Japan has officially launched the "Binance Japan Card"

• Capital Markets: Elliott opposes the updated take-private offer for Toyota Industries Corporation; TP ICAP Group has agreed to acquire Vantage Capital Markets, a global brokerage with significant presence in Tokyo; MUFG Trading has established a wholly owned subsidiary in Singapore for structured trade solutions

• Digital Assets: Japan Blockchain Industry Outlook 2026 - the transition from narrative to utility

• The Last Word: Ten for the Road

Our weekly online forum is taking place this week on Wednesday at 9pm JST, and will be streamed on LinkedIn Live (and YouTube & Twitter). Supported by our friends at Alpaca and ITFOR, we will also go offline and in-person again. Please check out our schedule on Luma, or register straight on LinkedIn.

Venture Capital & Private Markets

• Alpaca secures unicorn status with USD 1.15bn valuation following USD 150m Series D: Japanese-founded and US-headquartered Alpaca, a provider of API-first stock and crypto brokerage infrastructure, has raised $150 million in a Series D funding round, propelling the company’s valuation to $1.15 billion; the round was led by Drive Capital, with participation from major institutional players including Citadel Securities, Kraken, and the venture arms of BNP Paribas (Opera Tech Ventures) and MUFG; as part of the transaction, Drive Capital Co-Founder Chris Olsen will join Alpaca’s Board of Directors; in addition to the equity financing, the company secured a $40 million line of credit to bolster its balance sheet

• SMBC Fin Atlas Beyond Fund makes inaugural bet on AI security firm WitnessAI: Japanese banking giant Sumitomo Mitsui Banking Corporation (SMBC) has made its first-ever investment through its new corporate venture capital (CVC) fund; the fund, named the "SMBC Fin Atlas Beyond Fund" and launched in collaboration with Fin Capital, has participated in the recent $58 million funding round for WitnessAI, an emerging leader in artificial intelligence security and governance; this inaugural investment marks a clear strategic move by SMBC to back foundational technologies shaping the future of finance

New Funds

• Minerva Growth Partners targets ¥20 Billion for second fund to deepen crossover strategy in Japan: Minerva Growth Partners (MGP) has announced the first close of its second flagship fund, "Minerva Growth Partners II, LP" (Fund II); the Tokyo-based firm, which specializes in growth equity, is targeting a total corpus of 20 billion yen ($130 million) with backing from both domestic and international institutional investors; MGP operates in partnership with Hong Kong-based Pleiad Investment Advisors, a strategy designed to bridge the gap between private venture capital and public equity markets

• Mercuria and Daiwa break new ground with Japan’s first open-ended aircraft fund targeting ¥150 Billion: Tokyo-based Mercuria Investment (MIC) has unveiled plans to launch the country’s first open-ended aircraft fund managed by a domestic firm; the initiative, dubbed "MACH OE," represents a strategic shift in how Japanese institutional capital accesses the global aviation market, moving beyond traditional tax-lease structures toward liquidity-focused asset management; the fund targets an asset size of over JPY 150 billion ($1 billion) and has secured the Development Bank of Japan (DBJ) as a prestigious anchor investor, signaling strong institutional confidence in the venture

Other media

• Akihito Yuzuriha has left Honda to join SMBC Group's new innovation arm as a director: after half a decade at Honda’s startup investment arm, Honda Xcelerator Ventures – where he worked concurrently with his other role in the corporate’s business strategy and development function – Yuzuriha has joined SMBC Edge, the bank’s newly-established VC arm

• How New Horizon Capital Is revitalizing Japan’s SME sector through Private Equity: Yasushi Ando, President of New Horizon Capital, explains how private equity is helping Japan’s SMEs navigate succession challenges, roll-ups, and restructuring; with a hands-on approach and long-term vision, his company is unlocking new value in the mid-market sector

Insurance

• Nippon Life Insurance Company's tender offer for Medical Data Vision: this transaction is a strategic bolt-on acquisition designed to build a new, data-centric business vertical for Nippon Life; the move is a direct manifestation of the company's long-term corporate vision to evolve beyond its traditional insurance role into a comprehensive "peace of mind" provider; Nippon Life's long-term corporate vision aims to establish a multifaceted enterprise offering integrated services across insurance, asset management, healthcare, and nursing care; enhancing the customer experience (CX) by providing value beyond conventional insurance products is central to this ambition

• Prudential Japan CEO resigns as internal probe reveals financial misconduct involving over 100 employees: Prudential Life Insurance of Japan announced a sweeping leadership overhaul and a comprehensive restructuring of its governance framework, following the revelation of widespread financial improprieties among its sales force; Hiroshi Mahara, Representative Director and CEO of Prudential Life, will step down on February 1, 2026, to take managerial responsibility for the scandal; the shakeup follows the conclusion of an extensive "Customer Confirmation" investigation launched in August 2024; the probe, which involved contacting millions of policyholders, uncovered not only instances of direct fraud but also a pervasive culture of unauthorized financial dealings by sales staff, totaling billions of yen

Banking

• Money Forward reports full FY2025 results: the 24.7% year-on-year growth in net sales reflects the successful expansion across all business segments, particularly in the core Business and Home SaaS offerings; this is further validated by the impressive 31.1% growth in SaaS Annual Recurring Revenue (ARR), a key indicator of the underlying health and scalability of the subscription-based business model; the most dramatic shift occurred in profitability. The company recorded a significant swing from a net loss of (¥6,330) million in FY2024 to a net profit of ¥1,587 million in FY2025; this turnaround, was driven by extraordinary income; the Consolidated Statement of Income reveals a "Gain on sale of shares of subsidiaries and associates" of ¥6,248 million; this one-time gain masks a continued operating loss at the GAAP level, making Adjusted EBITDA the more relevant metric for assessing the underlying operational health of the business during this growth phase

• SMBC launches Japan’s first credit card-based foreign currency accumulation service to court retail investors: in a bid to accelerate the shift from savings to assets among Japanese households, Sumitomo Mitsui Financial Group (SMBC Group) has announced the immediate launch of a new service allowing individual customers to accumulate foreign currency deposits via credit card payments; this initiative—a collaboration between Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Card Company—marks a first for Japan; dubbed "Foreign Currency Credit Card Accumulation", the service aims to lower the barrier to entry for currency diversification while incentivizing users with SMBC’s loyalty program, V Points

• Fujitsu and Standard Chartered unveil roadmap for Qubitra, a JV for quantum commercialization in Finance: Fujitsu and SC Ventures, the innovation arm of Standard Chartered, have formally announced the operational roadmap for Qubitra Technologies, a London-based joint venture designed to transition quantum computing from theoretical research to practical, commercial application within the financial services sector; incubated under the working title "Project Quanta" in September 2025, the newly branded entity aims to bridge the gap between quantum hardware capabilities and institutional banking requirements; the venture plans to leverage Fujitsu’s computing infrastructure—including its Digital Annealer—to tackle computationally intensive banking functions such as high-frequency trading, derivatives pricing, and complex fraud detection

• Infcurion tapped by SMBC Group to power invoice digitization and card payment features in corporate finance platform ‘Trunk’: Infcurion has announced its formal participation as a design and development partner for "Trunk," a comprehensive digital financial service for corporate clients operated by Sumitomo Mitsui Financial Group (SMBC Group); Infcurion is integrating new functionality into the platform that leverages its proprietary "Winvoice" infrastructure; this integration is designed to streamline payment processes for businesses by combining automated invoice data extraction with credit card payment capabilities

• The Reserve Bank of India (RBI) has given SMBC Group initial approval to establish a wholly-owned subsidiary; this move allows the Japanese bank greater operational freedom in India; previously, Sumitomo Mitsui Banking Corporation operated through a branch; the new subsidiary will be a separate legal entity, offering treatment similar to local banks

Payments

• JPYC bridges the gap to retail - Yen-pegged stablecoin to power touch payments via Japan’s national ID system: JPYC, the prominent Japanese Yen-pegged stablecoin, is set to undergo a significant stress test in the physical retail environment, moving beyond the digital realm to power real-world transactions through Japan’s My Number Card system; in a move that signals the increasing convergence of Web3 assets and traditional payment infrastructure, Sumitomo Mitsui Card Company (SMCC) and MynaWallet have announced a continuous proof-of-concept (PoC) program; the initiative places JPYC at the core of a new payment ecosystem designed to allow consumers to spend stablecoins as easily as tapping a transit card

• Digital Garage, JCB, and Resona Holdings form strategic alliance to mainstream stablecoin payments in Japan: in a major push to modernize Japan’s payment infrastructure, Digital Garage (DG), global payments brand JCB, and Resona Holdings have entered into a tripartite partnership aimed at the full-scale social implementation of stablecoin payments; while the global market for stablecoins is expanding rapidly due to their utility as a settlement layer, Japan has faced hurdles regarding regulatory compliance and practical business modeling; this partnership seeks to bridge that gap; the alliance identifies significant opportunities in reducing foreign exchange friction for inbound tourists, streamlining fund settlements, and improving cash flow for merchants through immediate settlement

• Binance Japan has officially launched the "Binance Japan Card", issued in partnership with Life Card and operating on the JCB network; the flagship feature of the Binance Japan Card is its reward structure; unlike traditional credit cards that offer points or miles, this card offers a 1.6% return in BNB (Binance Coin), the utility token central to the Binance ecosystem; according to internal data from December 2025, this rate represents the industry’s highest standard for domestic credit cards offering crypto-asset rewards

Capital Markets

• Elliott Investment Management and Elliott Advisors (UK), which advise funds that together have a significant ownership stake in Toyota Industries Corporation, have published an open letter to the Company's shareholders; in the letter, Elliott outlined its opposition to the revised tender offer by Toyota Fudosan at ¥18,800 per share, which Elliott believes very significantly undervalues Toyota Industries; Elliott's analysis showed the Company's intrinsic net asset value to be more than ¥26,000 per share as of January 16, 2026 – almost 40% above the Revised TOB price – and that the Standalone Plan for Toyota Industries offers a clear path to a valuation of more than ¥40,000 per share by 2028

• TP ICAP Group, a world-leading provider of market infrastructure, has agreed to acquire Vantage Capital Markets, a global brokerage with significant presence in London, Hong Kong, Tokyo, and Dubai; the acquisition, subject to regulatory approval, strengthens TP ICAP’s position in equity derivatives and fixed income, particularly across APAC markets, while enabling Vantage to leverage TP ICAP’s extensive US footprint; Vantage’s leadership team will remain in place, ensuring continuity and stability for clients; completion of the transaction is subject to regulatory approvals and is expected to close in Q2 2026

• MUFG Bank’s consolidated subsidiary MUFG Trading has established a wholly owned subsidiary in Singapore, MUFG Trading (Singapore); MUFG Trading was established in July 2022, to provide new structured trade solutions to MUFG's corporate clients for their sales and purchase of goods and raw materials, based on approval from the Financial Services Agency; the new entity, MUFG Trading Singapore, will be dedicated to enhancing the structured trade solutions provided to customers for their global procurement and trades; the launch of its business is expected to take place by March 2026

Digital Assets

• Tokyo FinTech is pleased to once again support the TEAMZ Summit as a community partner, this year at a new venue: Happo-en; secure your ticket at current "Early Bird" pricing, and receive an additional 10% off with the discount code "TOKOYFINTECH2026"; see you in Tokyo in early April 🌸

• Japan Blockchain Industry Outlook 2026 - the transition from narrative to utility: the year 2026 represents a critical inflection point for the Japanese blockchain industry; a clear consensus has emerged among industry leaders and experts: the market is undergoing a decisive shift away from speculative narratives and towards demonstrable utility, comprehensive regulatory integration, and sustainable business models; this transition marks the end of an era dominated by hype cycles and the beginning of a new phase defined by maturation, consolidation, and the establishment of foundational infrastructure for long-term growth; while past years were characterized by feverish excitement, 2026 will be defined by the quiet, substantive work of building real value; the primary catalyst for this evolution is a series of foundational changes in the global regulatory environment, which are finally providing the clarity necessary for the industry to move into the mainstream

The Last Word: Ten for the Road

Following Prime Minister Sanae Takaichi’s surprise announcement of the dissolution of the Lower House, the outlook for Japanese markets has shifted decidedly toward a "Takaichi Trade" narrative. With the general election set for February 8th, strategists are pricing in a consolidated LDP power base, a normalized monetary policy path, and specific sector winners. Here are the 10 key takeaways for investors from the discussions we have observed throughout the past week.

1. Takaichi’s Calculated Gamble: Prime Minister Takaichi has dissolved the Lower House to capitalize on her personal approval rating versus a significantly lower party approval rating. This snap election is viewed as an aggressive move to secure a popular mandate before pushing through difficult structural reforms.

2. An LDP Landslide is Priced In: The opposition’s attempt to form a coalition between the CDP and Komeito is viewed by analysts as a "desperate" move likely to alienate voters. Projections suggest the LDP could increase its seat count from 199 to approximately 260, potentially securing a stable absolute majority and reducing reliance on coalition partners.

3. BOJ Normalization: Next Hike in July: Following the December rate hike, the Bank of Japan is gaining confidence in the "virtuous cycle" of wages and prices. Economists expect the BOJ to pause during the election cycle but resume hiking in July 2025, maintaining a trajectory toward a 1.5% neutral rate.

4. Wage Growth to Anchor Inflation: Preliminary data for the Shunto (spring wage negotiations) suggests base wage growth of 3.2%–3.3%. This is critical: unlike previous years driven by corporate profits, this growth is occurring despite margin pressure, signaling sustainable, structural wage inflation.

5. Fiscal Policy: Discipline Now, Spending Later: The FY2026 budget is surprisingly conservative, with increases mostly tied to non-discretionary debt service and defense. However, Takaichi is expected to unveil a massive "Growth Strategy" white paper in June, targeting 17 key sectors, which will likely unleash fresh fiscal stimulus post-election.

6. The "Economic Security" Long Trade: With Takaichi’s hawkish stance on national security, "Economic Security" is a top conviction long. This includes Defense, Semiconductors, and Shipbuilders. Regardless of the election margin, defense spending is viewed as a secular tailwind.

7. Inflation Winners are the New Alpha: As Japan exits deflation, investors are advised to pivot toward "Inflation Beneficiaries"—companies with pricing power that can pass on costs. This includes trading houses (sogo shosha), construction firms, and luxury consumption plays.

8. Yen Intervention Risks are Elevated: The Ministry of Finance has ratcheted up verbal intervention. While the election usually encourages risk-on Yen selling, a breach of key levels could trigger actual intervention, with strategists estimating a potential 3-4 Yen strengthening impact if executed.

9. Shorting the "Zombie" Companies: In a rising rate environment, companies with weak balance sheets are becoming prime short targets. The strategy involves shorting high-leverage small-caps (specifically TSE Growth components) that will struggle with higher borrowing costs.

10. JGB Outlook: Bear Steepening: The bond market is bracing for higher yields. An LDP victory implies political stability and eventual fiscal expansion, which, combined with the BOJ’s normalization path, supports a short position on JGBs (expecting yields to rise) and a steepening of the yield curve.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

According to Morgan Stanley Investment Management, Japan is running hot. Can you feel it?

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Credit Saison supports Mylapay's USD 1m bridge financing

• Insurance: Tokio Marine Group's ~$1 billion acquisition of Commodity & Ingredient Hedging

• Banking: the best performing Asia-Pacific bank stocks in 2025; MUFG to establish a universal bank in the European Union; Jenius Bank, a digital bank division of SMBC Group, is closing

• Payments: AEON Financial posts 10% operating profit growth for nine-month period; Lacoste Japan taps Riskified AI to drive ecommerce efficiency, boosting authorization rates to 90%

• Capital Markets: JAMP Fund Management debuts ETF white-label service; Alpaca targets Indian market expansion with strategic acquisition of GIFT City broker Zincmoney

• Asset Management: Finatext subsidiary Nowcast launches AI-ready data platform for Daiwa Asset Management; FOLIO Holdings - Designing tomorrow's finance

• Digital Assets: Coincheck to acquire digital asset manager 3iQ in USD 112m share deal to boost global institutional footprint

• The Last Word: Who will buy Japanese Government Bonds?

After a successful launch last week, our weekly online forum, which we aim to host every Tuesday at 9pm JST, will be streamed on LinkedIn Live (and YouTube & Twitter) going forward. Supported by our friends at Alpaca and ITFOR, we will also go offline and in-person again. Please check out our schedule on Luma.

Venture Capital & Private Markets

• Credit Saison supports Mylapay's USD 1m bridge financing: Payment infrastructure startup Mylapay has secured $1 million in a fresh capital injection, fortifying its balance sheet ahead of a planned Series A fundraise; the bridge round saw follow-on commitments from existing investors CDM Capital and Credit Saison, while Pratekk Agarwaal’s GrowthCap Ventures joined the cap table as a new backer, supported by a cohort of strategic angel investors

Not FinTech

• Rakuten Medical has closed a $100 million Series F financing round, securing the capital necessary to propel its lead oncology asset through late-stage clinical trials and toward a targeted U.S. regulatory submission in 2028; the financing was led by TaiAx Life Science Fund, a venture vehicle jointly established by Taiwania Capital and Japan’s Axil Capital; the round attracted the largest group of institutional investors in the biotech firm’s history, including heavyweights from the Japanese financial sector such as Daiwa Securities, Mitsui Sumitomo Insurance, and Sumitomo Mitsui Banking

• UnlimiTech, a Tokyo-based startup aiming to digitize legacy workflows in the manufacturing sector, has completed a 75 million yen ($500,000) funding round; the capital injection was structured through a combination of third-party allotments, including J-KISS type stock acquisition rights, and debt financing; the round saw participation from domestic venture capital, Mizuho Bank, and the Japan Finance Corporation (JFC)

Insurance

• Tokio Marine Group got a shout-out in FT Partners' recent "Commodities FinTech" report: "The space has attracted recent attention following Blackstone’s $6 billion+ acquisition of commodities software and data provider Enverus, and Tokio Marine Group's ~$1 billion acquisition of Commodity & Ingredient Hedging."

Banking

• According to S&P Global, the best performing Asia-Pacific bank stocks in 2025 where dominated by small(er) Pakistani and Japanese banks

• MUFG to establish a universal bank in the European Union: Within a shifting geopolitical and regulatory environment, Mitsubishi UFJ Financial Group (MUFG) has executed a meticulous calibration of its legal entity structure to ensure continuity of access to the EU Single Market while optimizing capital efficiency and regulatory compliance; at the heart of this European strategy lies MUFG Bank (Europe) N.V. (MBE), a distinct legal entity domiciled in the Netherlands; the analysis of MBE's structural identity reveals a dual-track strategy: utilizing a fully capitalized Dutch subsidiary to passport commercial banking services across the European Economic Area (EEA), while simultaneously retaining direct branches of the Japanese parent bank in specific jurisdictions to leverage the colossal balance sheet of the global group; furthermore, MBE is being transformed from a specialized commercial lender into a "Universal Bank" through the impending absorption of MUFG’s securities operations—a move that signifies the maturation of MUFG’s European business model into a fully integrated financial services platform; pursuant to relevant approvals, this realignment is planned for the 2026/27 fiscal year

• Jenius Bank, a digital bank division of SMBC Group, is closing, according to several now-former employees; Jenius has not made an official announcement, and representatives for SMBC had no comment; but two former employees confirmed mass layoffs and that Takeshi Okamoto, chair and CEO of Jenius’ legal entity SMBC Manubank, informed them in a virtual all-hands meeting Thursday that Jenius would be shutting down

Payments

• AEON Financial posts 10% operating profit growth for nine-month period: AEON Financial Service has demonstrated notable resilience in its performance for the nine months ending November 30, 2025, achieving robust top-line growth; the company's results tell a clear story: its strategic investments in a powerful domestic banking and digital payments ecosystem are generating a low-cost funding engine that is proving critical in counteracting margin pressure from higher funding costs; the 10% year-over-year increase in operating profit was primarily fueled by strong performance across core revenue streams; increased loan revenue contributed an additional ¥6.8 billion, while installment finance revenue grew by ¥7.7 billion

• Lacoste Japan taps Riskified AI to drive ecommerce efficiency, boosting authorization rates to 90%: Lacoste Japan has reported a significant recovery in its digital transaction processing capabilities, announcing that authorization approval rates have surged to 90% following the integration of Riskified’s (NYSE:RSKD) AI-driven fraud detection platform; the implementation, completed in May 2025, marks a strategic pivot for the French apparel giant’s Japanese arm, which had previously grappled with approval rates hovering near 70%; according to the company, the legacy rule-based systems previously in place resulted in a high volume of manual reviews, creating logistical bottlenecks and forcing warehouse teams to intercept shipments reactively

Economics

• The Bank of Japan has published its "Regional Economic Report (Summary)" for January 2026; all nine regions reported that their respective economies had been recovering moderately, picking up, or picking up moderately, although some weakness had been seen in part

• Goldman Sachs has made its "2026 Japan Economic Outlook" publicly available, without any redactions; the analysts expect (I) steady growth to continue in 2026, led by domestic demand, (II) underlying inflation to rise moderately amid continued high wage growth, (III) monetary policy to reach a crucial stage for sustainable achievement of 2% Inflation, and (IV) a year to assess the impact of the expansionary fiscal policy on fiscal soundness

• Mitsubishi UFJ Research & Consulting has published "The Japanese Economy in Fiscal 2025 and Fiscal 2026"

Capital Markets

• The trading volume of single stock options (SSOs) on the Osaka Exchange (OSE) has reached 3,438,374 contracts in 2025, marking the highest level since the market was launched; in addition, the notional amount of trades for the same year was approximately JPY 494.1 billion, the highest figure since the integration of the OSE and Tokyo Stock Exchange (TSE) derivatives markets in 2014.

• JAMP Fund Management debuts ETF white-label service: JAMP Fund Management has entered into a strategic partnership with Nippon Value Investors, marking the first commercial deployment of its newly established ETF white-label service; the collaboration aims to list a Japan-domiciled active ETF on the Tokyo Stock Exchange (TSE) by spring 2026; the agreement serves as a proof-of-concept for JAMP’s proprietary white-label framework, which was officially launched in June 2025; billed as Japan’s first fully integrated, end-to-end support system for ETF structuring, the platform is designed to decouple investment decision-making from operational administration

• Alpaca targets Indian market expansion with strategic acquisition of GIFT City broker Zincmoney: Japanese-founded, U.S.-based brokerage infrastructure provider Alpaca announced its intent to acquire Zincmoney IFSC Private Limited, a move designed to secure a regulatory foothold in India’s burgeoning financial services sector; the transaction centers on Zincmoney’s operations within the Gujarat International Finance Tec-City (GIFT City), India’s tax-neutral financial hub; by acquiring Zincmoney, a broker-dealer regulated by the International Financial Services Centres Authority (IFSCA), Alpaca aims to bypass the lengthy process of organic licensure and immediately establish an operational entry point into the region

Asset Management

• Finatext subsidiary Nowcast launches AI-ready data platform for Daiwa Asset Management: Nowcast, a subsidiary of the Finatext Group, has successfully completed development and deployment of "DAM-AICore," a proprietary generative AI application tailored exclusively for Daiwa Asset Management; the move marks a significant step in the asset manager’s digital transformation (DX) strategy, combining a custom front-end AI interface with a robust, backend data infrastructure overhaul; the initiative addresses the growing demand within the financial sector to leverage large language models (LLMs) for operational efficiency and sophisticated market analysis; Nowcast, leveraging its expertise in alternative data and financial systems, designed the DAM-AICore solution to operate within a secure, independent AWS environment specific to Daiwa

• FOLIO Holdings - Designing tomorrow's finance: FOLIO Holdings is an innovative financial solutions company operating within the larger SBI Group, driven by a powerful and forward-looking core mission, "Designing tomorrow's finance"; FOLIO's flagship product is ROBOPRO, an AI-powered investment service first launched in January 2020; the most important feature of ROBOPRO is its use of AI to predict market movements and perform proactive, agile rebalancing of the investment portfolio to respond to changing conditions; this service's strategy is utilized by the "ROBOPRO Fund," a public investment trust established in December 2023

Digital Assets

• Coincheck to acquire digital asset manager 3iQ in USD 112m share deal to boost global institutional footprint: Coincheck Group N.V. (Nasdaq: CNCK) has entered into a definitive agreement to acquire Canadian alternative asset manager 3iQ in an all-stock transaction valued at approximately $111.8 million; the deal will see the Nasdaq-listed holding company purchase a 97% controlling interest in 3iQ from its own majority shareholder, Monex Group; under the terms of the agreement, Coincheck will issue approximately 27.1 million new ordinary shares to Monex, based on a valuation of $4.00 per Coincheck share (closing price on January 8: $2.81); the company also intends to acquire the remaining minority interest on substantially equivalent terms, targeting 100% ownership upon the transaction’s expected closing in the second quarter of 2026

The Last Word: Who will buy Japanese Government Bonds?

A recent NLI Research Institute report examines the shifting landscape of Japanese Government Bond (JGB) ownership as the Bank of Japan reduces its massive holdings. With long-term interest rates rising due to monetary policy normalization and fiscal expansion, the analysis highlights a growing need for private investors to fill the resulting vacuum.

While banks and foreign investors have increased their positions, the author argues that these groups can be volatile or sensitive to short-term earnings. Consequently, the paper emphasizes the importance of household investment in JGBs as a stabilizing force for the market.

To encourage this, the source suggests improving the attractiveness of bond products, such as adjusting interest rate formulas or introducing longer-term options. Ultimately, mobilizing individual savings is presented as a vital strategy for ensuring the steady absorption of national debt.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

Japan's Minister of Finance, Satsuki Katayama, rang the bell at the Tokyo Stock Exchange to open the new trading year today.

We are pleased to announce the "Product of the Year 2025": the 50-year mortgage! In the face of sky-rocketing real estate prices, where even second-hand apartments in Tokyo change hands at over 100 million yen, and a third consecutive year of declining real wages, spreading out their debt across 20 more years is the only way many can achieve their dream of home ownership today.

In other news, the November 2025 labor market data has been published, and the total work force has exceeded 70 million people for the first time. Within the labor pool, there also has been a significant increase in permanent employment, in particular for female workers. Some argue that the increase in the work force is attributable to an expanding economy that draws in more people from the sidelines. Alternatively, or rather additionally, the affordability crisis might force many households to generate two incomes.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Digital Securities raises JPY 300m in Series A third close

• Insurance: Sompo Holdings and Nippon Life integrated & responsible investment reports

• Payments: NETSTARS will begin a pilot program accepting Circle's U.S. dollar-pegged stablecoin; DeCurret DCP has entered into a strategic partnership with Kyushu Financial Group for tokenized deposits

• Capital Markets: we have charted the most important publicly listed FinTech companies; Japan's yen swaps go global

• Asset Management: the FSA has published the results of its second Fund Monitoring Survey

• Digital Assets: a look at Coincheck's first year after its Nasdaq listing; SBI publishes the results of its "Next Generation Finance Questionnaire 2025", providing insightful data on digital asset investment habits in Japan

• The Last Word: Expanding labor market despite decreasing population

Venture Capital & Private Markets

• Digital Securities raises JPY 300m in Series A third close: Digital Securities has successfully completed the third closing of its Series A funding round, raising a total of 300 million yen; this latest injection of capital brings the Tokyo-based FinTech firm’s total cumulative fundraising to 1.5 billion yen since its establishment; the round was backed by a strategic mix of institutional and corporate investors, including: Japan Post Capital, Norinchukin Capital, and HoriPro Group Holdings

Insurance

• Sompo Holdings has published its "Integrated Annual Report 2025"

• Nippon Life has published its "Responsible Investment Report 2025"

Payments

• NETSTARS will begin a pilot program accepting Circle's U.S. dollar-pegged stablecoin: "USDC" for payments at physical retail locations within Haneda Airport Terminal 3; the initiative, claimed by the company to be a first for brick-and-mortar stores in Japan, aims to streamline transactions for international tourists and bridge the gap between Web3 assets and real-world retail infrastructure

• DeCurret DCP has entered into a strategic partnership with Kyushu Financial Group and its banking subsidiaries—The Higo Bank and The Kagoshima Bank—to explore the implementation of tokenized deposits using the "DCJPY" digital currency network; this collaboration marks the first initiative of its kind by a regional financial institution within the Kyushu region

Please join our weekly online forum, which we aim to host every Tuesday at 9pm JST, schedule permitting. Supported by our friends at Alpaca and ITFOR, we will also go offline and in-person again. Please check out our schedule on Luma.

Capital Markets

• 2025 Chartbook - The Japanese FinTech Sector on the Tokyo Stock Exchange: the FinTech market as a whole, as captured by the Global X Japan FinTech ETF (Ticker: 2836), ended the year on a positive note, up approximately 18%, and showing resilience during the April 2025 tariff sell-off; we have catalogued the most important entities listed on the Tokyo Stock Exchange that define the modern Japanese FinTech sector by synthesizing data from index constituents, corporate disclosures, and market movements to offer a granular view of the ecosystem as of the end of the 2025 calendar year

• Japan’s yen swaps go global: with US investors now able to trade and clear JPY interest rate swaps (IRS) at the Japan Securities Clearing Corporation (JSCC), cross-border access, clearing competition and yen-rate volatility are converging to reshape one of the world’s most important rates markets

Asset Management

• The FSA's second "Fund Monitoring Survey": the Financial Services Agency (FSA) conducts the Fund Monitoring Survey in light of requests from the International Organization of Securities Commissions (IOSCO) and others for national authorities to collect data on funds of a certain scale from the perspective of financial stability, as well as for the Agency's own monitoring purposes; the FSA has now compiled the summary of results for the second survey and published them

Digital Assets

• Coincheck 2025 - The Tale of Two Tapes: The calendar year 2025 represented a definitive inflection point in the corporate history of Coincheck Group N.V. (Nasdaq: CNCK); transitioning from a privately held subsidiary of the Japanese financial conglomerate Monex Group to a standalone entity listed on the Nasdaq Global Market, Coincheck navigated a year defined by extreme volatility, aggressive strategic expansion, and the rigorous demands of public market scrutiny; we offer an exhaustive analysis of the company's performance, dissecting the interplay between its operational achievements—such as record revenue growth and pivotal acquisitions—and its turbulent capital markets journey, where the stock price faced significant headwinds amidst a complex macroeconomic backdrop

• Digital asset investment landscape: the "Next Generation Finance Questionnaire 2025," a comprehensive survey conducted by the SBI Financial and Economic Research Institute, offers a detailed snapshot of investor attitudes and actions in the digital asset investment landscape in Japan

The Last Word: Expanding Labor Market Despite Decreasing Population

Japan is facing a severe labor shortage, at least if you believe the headlines. The same headlines that were proclaiming the "2024 Trucker Crisis" due to annual overtime being capped at 960 hours (!), and even before that, announced the "2025 Digital Cliff". Alas, armageddon is not yet upon us.

Take the logistics crises as an example. Suddenly, it became possible to combine loads, not only within the same company, but also across competitors. New businesses were born to co-ordinate and consolidate. A drop in service level? Not as far as I can tell.

This is another way of saying that worker productivity in Japan, in particular in the service sector, is appallingly low. GDP per capita (both in PPP terms and current dollars) has been eclipsed by Taiwan and Korea, for example. So for the "virtuous wage/price spiral" to extend beyond inflation (which we still have not consistently reached, with real wages falling again throughout 2025), productivity improvements will also be required.

Labor shortages are industry-specific and regional. They also follow a barbell shape, tending to be clustered among lower skilled workers (e.g., demolition workers, servers, conbini staff) and high-skilled labor (e.g., software engineering, AI experts). At the macro level, the story is quite different.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

The last full work week of the year brought a couple of significant deals (Amova, SMBC), a few new industry associations (the Business Invoice Payment Services Association, or BIPSA, the Japan Digital Decentralized Finance Association, or JDFA, and the Entertainment × Fintech Consortium), and lots of good cheer.

Our new year resolution is to accompany this newsletter once more with a weekly online forum, which we aim to host every Tuesday at 9pm JST, schedule permitting. Supported by our friends at Alpaca and ITFOR, we will also go offline and in-person again. Please check out our schedule on Luma.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: SMBC Group targets JPY 15 trillion in private assets, partners with Bain and Muzinich in global push; NTT DOCOMO launches its fourth CVC fund with a size of JPY 15 billion

• Banking: SMBC raises stake in Philippines' RCBC to 24.5% in ¥17 billion deal; au Jibun Bank fortifies anti-fraud defenses with LAC’s AI-driven real-time detection system

• Payments: a policy brief on the self-regulatory framework for business invoice payment services in Japan; SBI VC Trade and Aplus to pilot USDC retail payments in Japan; Digital Garage updates ‘App Pay’ platform to bypass app store fees following regulatory shift; Nudge initiates "Entertainment × FinTech Consortium" to capitalize on the ¥13 trillion content market

• Capital Markets: Tokyo Stock Exchange unveils OTC settlement service for carbon credits to streamline bilateral trading; Sapporo Securities Exchange unveils blueprint for "PRO Frontier Market," targeting startups and regional growth sectors

• Asset Management: Amova doubles down on Southeast Asia with 100% takeover of Malaysian heavyweight AHAM

• Digital Assets: Metaplanet launches sponsored ADR program to deepen U.S. institutional access and liquidity; Bybit begins phasing out services in Japan following FSA warnings; Japanese financial consortium to pilot first tokenized deposit settlements for security tokens; introducing the Japan Digital Decentralized Finance Association

• The Last Word: The Impact Imperative

Before we go:

Venture Capital & Private Markets

• SMBC Group targets JPY 15 trillion in private assets, partners with Bain and Muzinich in global push: Sumitomo Mitsui Financial Group has unveiled an aggressive strategy to establish private asset management as a primary business pillar, targeting JPY 15 trillion in cross-asset management balances by 2031; in an announcement made on December 24, 2025, the Japanese banking giant outlined a comprehensive plan to leverage its commercial banking, leasing, and asset management divisions to capture growth in alternative investments; to unify these efforts, the group launched a new global brand, "SMBC Private Markets"

• NTT DOCOMO and NTT DOCOMO Ventures (NDV), together with NTT FINANCE CORPORATION, have announced the establishment on January 1, 2026, of the DOCOMO Innovation Fund IV, L.P. (DI4 Fund) with a fund size of 15 billion yen; the purpose of this fund is to strengthen the cooperation with venture companies that have promising services and technology

• With a portfolio of over 100 companies spanning media, commerce, and finance both in Japan and abroad, LY Corporation continues to generate synergy across a wide range of businesses; this article features In Joon Hwang, CEO of Z Venture Capital (ZVC), the corporate venture capital arm of LY Corporation; recently named to the Global Venturing Powerlist 2025, Hwang also serves as Chief Global Investment Officer (CGIO) at LY Corporation, making him a key figure in shaping the Group's global strategy

• Incubate Fund has published its "Summary of 2025"

Banking

• GMO Aozora Net Bank announced that the lifetime number of service contracts for "BaaS by GMO Aozora" has exceeded 1,000 as of December 2025

• SMBC raises stake in Philippines' RCBC to 24.5% in ¥17 Billion deal: Sumitomo Mitsui Banking Corporation has further solidified its foothold in the Southeast Asian market, announcing the acquisition of an additional 4.46% equity stake in the Philippines' Rizal Commercial Banking Corporation (RCBC); the transaction, valued at PHP 6.4 billion (approx. JPY 17 billion), raises SMBC’s total shareholding in the Manila-based lender to 24.46%; the deal was executed at a price-to-book ratio (PBR) of 1.0x

• au Jibun Bank fortifies anti-fraud defenses with LAC’s AI-driven real-time detection system: au Jibun Bank has moved to bolster its internet banking security infrastructure, announcing the deployment of "AI Zero Fraud," a proprietary detection system developed by cybersecurity firm LAC; the integration, which went live during December 2025, represents a strategic shift toward artificial intelligence to mitigate the rising risk of illicit money transfers

Payments

• The self-regulatory framework for business invoice payment services in Japan: the landscape of business-to-business (B2B) transactions in Japan is undergoing a significant transformation, driven by the rapid growth of Business Invoice Payment Services (BIPS); these services provide a vital bridge between traditional invoicing and modern cashless payments, enhancing operational flexibility for Japanese enterprises; this rapid adoption has outpaced direct legislative oversight, creating a regulatory penumbra where the service's classification—whether as a form of lending or a currency exchange—remains ambiguous, posing potential risks to market stability and user protection; this situation necessitates a harmonized, secure operational standard to ensure market integrity; in response, industry leaders have proactively established the Business Invoice Payment Services Association (BIPSA); this self-regulatory body was created to develop and manage a comprehensive framework centered on the "Business Invoice Payment Service Transaction Guidelines"; BIPSA is initially supported by 25 member firms

• SBI VC Trade and Aplus to pilot USDC retail payments in Japan: SBI VC Trade and Aplus, both subsidiaries of the financial conglomerate SBI Group, will partner to launch a proof-of-concept (PoC) for in-store payments using the U.S. dollar-pegged stablecoin, USD Coin (USDC); the pilot program, scheduled to commence in the spring of 2026, aims to establish a new commercial model for stablecoin settlement in the Japanese retail sector; the initiative is designed to capture the growing demand from international visitors (inbound tourism) while advancing the "International Financial City OSAKA" project championed by local governments

• Digital Garage updates ‘App Pay’ platform to bypass app store fees following regulatory shift: Digital Garage has made a significant update to "App Pay," its third-party payment platform for mobile applications; the new user interface features a "Link-Out" capability designed to align directly with Japan's "Act on Promotion of Competition for Certain Smartphone Software" (Smartphone Act), which came into full enforcement on December 18, 2025; the update leverages the newly enforced regulatory framework, which restricts dominant mobile OS providers from prohibiting third-party billing options

• Nudge initiates "Entertainment × FinTech Consortium" to capitalize on the ¥13 trillion content market: Nudge has announced the formation of the "Entertainment × Fintech Consortium," a strategic alliance designed to facilitate co-creation between the entertainment sector and domestic financial institutions; the initiative marks Japan’s first industry-spanning ecosystem aimed at integrating financial services with the entertainment business model; the primary objective is to move beyond traditional advertising-based collaborations (such as sponsorships) and towards deep structural integration where financial mechanisms support content creation and fan engagement

Capital Markets

• According to Bloomberg, Japan's smaller listings, defined by an offering size below USD 50 million, have fallen to their lowest level since 2013

• Tokyo Stock Exchange unveils OTC settlement service for carbon credits to streamline bilateral trading: the Tokyo Stock Exchange will introduce a new clearing and settlement service designed specifically for over-the-counter (OTC) carbon credit transactions; the initiative aims to reduce the administrative burden of bilateral trading and support Japan’s Green Transformation (GX) strategy by enhancing market convenience; the service, titled the "Carbon Credit OTC Transaction Settlement Service," is scheduled to launch on March 18, 2026

• Sapporo Securities Exchange unveils blueprint for "PRO Frontier Market," targeting startups and regional growth sectors: the Sapporo Securities Exchange has officially released the regulatory framework for its upcoming professional-investor-focused equity market, tentatively titled the Sapporo PRO Frontier Market (SPFM); in a public consultation document, the exchange outlined a flexible listing structure designed to compete with the Tokyo Pro Market by lowering barriers for high-growth startups while incentivizing specific regional industries; the SPFM is positioned as a stepping stone for unlisted startups, aiming to accelerate their growth through capital access before they transition to general markets like the SSE Main Board or the Ambitious market

• The Tokyo Stock Exchange has been asking listed companies in parent-subsidiary relationships and those in relationships under the equity method to develop initiatives and make disclosures on group management and the protection of minority shareholders; to serve as a reference for such initiatives and disclosures, the TSE has published the Compilation of Cases Studies on Such Matters as Parent-Subsidiary Listings; this document is a compilation of companies’ disclosures that have received positive feedback from investors, from the perspective of group management and minority shareholder protection

• The Tokyo Stock Exchange has also published "Examples of Initiatives by Growth Market-Listed Companies That Were Well Received by Investors", a compilation of examples of initiatives that investors have evaluated as effectively meeting their expectations for Growth Market-listed companies based on feedback received from investors and other stakeholders; its purpose is to serve as a reference for executives, IR personnel, planning departments, and other related parties at companies listed on the Growth Market as they promote “management that strives for high growth"

• The Ministry of Finance has formulated the "JGB Issuance Plan for FY2026"

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

• Asset Management One has published its "Japan Outlook 2026"

Asset Management

• Amova doubles down on Southeast Asia with 100% takeover of Malaysian heavyweight AHAM: Amova Asset Management has announced a definitive agreement to acquire the remaining equity interest in AHAM Asset Management, moving to take full control of one of Malaysia’s leading fund management houses; in a strategic push to solidify its footprint in Southeast Asia, the Japan-headquartered firm will increase its stake in AHAM from the current 20% to up to 100%, buying out majority shareholder CVC Capital Partners and other equity holders; the deal will convert AHAM into a consolidated subsidiary of Amova, subject to regulatory approvals in both Malaysia and Japan

• Nomura Research Institute has published its annual flagship report, "Japan's Asset Management Business 2025/26"

Digital Assets

• Metaplanet launches sponsored ADR program to deepen U.S. institutional access and liquidity: Metaplanet (TSE: 3350) has formally established a Sponsored Level I American Depositary Receipt program, a strategic move aimed at streamlining access for U.S. investors and bolstering liquidity in North American markets; the program has appointed Deutsche Bank Trust Company Americas as the depositary bank; the ADRs will trade on the U.S. over-the-counter (OTC) market under the new ticker symbol MPJPY; the instrument is structured on a one-to-one ratio, where one ADR represents one common share of Metaplanet stock

• Bybit begins phasing out services in Japan following FSA warnings: Bybit will gradually restrict accounts for its Japanese users starting in 2026 in a bid to comply with local regulatory requirements; Bybit has started notifying Japanese users that it will “discontinue services” and “gradually implement account restrictions” in an effort to comply with Japanese regulations; last year, Bybit scaled back its presence across Asia after it exited Hong Kong in May 2024, following regulatory scrutiny from the Securities and Futures Commission

• Japanese financial consortium to pilot first tokenized deposit settlements for security tokens: a consortium of six major Japanese financial and technology firms—including SBI Securities, Daiwa Securities, and SBI Shinsei Bank—has announced the launch of a collaborative project to verify real-world settlement of security tokens (ST) using tokenized deposits; the initiative aims to implement a Delivery Versus Payment (DVP) settlement scheme using "DCJPY," a digital currency backed by bank deposits; this project marks a significant step toward streamlining Japan’s rapidly expanding secondary market for digital securities

• Introducing the Japan Digital Decentralized Finance Association (JDFA): the General Incorporated Association Japan Digital Decentralized Finance Association (JDFA) has been established on December 1, 2025, led by KPMG Japan, which has run study groups on cryptocurrency ETFs; it was created to guide the growth of new financial technologies in Japan by bringing together experts from across the industry; approximately 20 financial institutions, including Daiwa Securities, Asset Management One, Mitsubishi UFJ Trust and Banking Corporation, Sony Bank, and SBIVC Trade, have expressed their intention to participate; full-scale activities will begin in January

The Last Word: The Impact Imperative

A fundamental re-evaluation of corporate value is underway, compelling leaders to measure what was once considered immeasurable. At the forefront of this shift is impact accounting, a discipline defined by the International Foundation for Valuing Impacts (IFVI) and the Value Balancing Alliance (VBA) as the practice of measuring an organization's social and environmental impacts, converting them into monetary values, and integrating this data with traditional financial information to guide decision-making. This moves beyond treating societal effects as mere "externalities" and internalizes them as core components of corporate performance.

This strategic evolution is not an academic exercise; it is being driven by powerful market forces. A 2023 PwC survey of global investors reveals an undeniable trend: 75% of investors believe it is important for companies to report on their social and environmental impacts, and 81% state that clarifying the monetary value of these impacts helps integrate trade-offs into business decisions. The message from capital markets is clear: quantifiable, transparent impact data is no longer a "nice-to-have" but a critical element in assessing long-term value and resilience.

A recent white paper, published by the Impact Startup Association, the Japan Association of New Public (Shin Koeki Renmei), and Keizai Doyukai, serves as a strategic guide for corporations navigating this new landscape. By analyzing the methodologies, benefits, and challenges observed in the pioneering implementations of impact accounting by leading Japanese companies, it provides a clear framework for turning impact measurement into a strategic advantage. The move towards impact accounting is not driven by compliance alone, but by a clear set of strategic benefits that create tangible value across the enterprise.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published here on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

We have done it! Not only is the Bank of Japan the only major central bank to raise its policy rate this year, it has done so twice. Well done, Ueda-san & team, leading us further down the path to normalization. With consumer prices, in particular food, still running hot, there is certainly room for further hikes in 2026, even if the "underlying" inflation is (again) expected to cool down towards the target range of 2%.

MUFG's capital market strategists expect "Bank of Japan policy normalization to continue in 2026, albeit more slowly than anticipated months ago, with benchmark policy rates projected at 1% by YE 2026. Higher JGB yields, in turn, encourage repatriation flows back to Japan, the largest overseas buyer base of USTs. Continued unwind of the yen carry trade and a structurally stronger JPY in 2026 will have the impact of raising global term premia and steepening global yield curves, including in the US Treasury market."

This week also saw the last Diet session of the calendar year, as well as an avalanche of draft and final reports from the various working groups, all getting their work out for review and/or public comment. As always, we have picked those that seemed the most important to us, like the semi-annual report of the Bank of Japan to the Diet, the changes to the Payment Services Act, and the AI Basic Policy.

Before we go:

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Smooth secures ¥2.85 Billion in Series B first close to expand rental BNPL platform; Nomura arranges USD 500m financing for Mexico's Plata; SBI Holdings' Fund invests in Vietnamese InsurTech Saladin Consulting and Technology; MUFG invests in Shriram Finance, a leading Non-Banking Financial Company in India

• Banking: SBI Sumishin Net Bank's renaming, capital restructuring & strategic collaboration; MUFG Bank integrates Private AI’s de-identification technology to bolster ‘OCEAN’ big data platform

• Payments: TMN taps DeCurret DCP for digital currency push in Japan’s distribution sector; SBI Holdings and Startale Group partner to develop a compliant Yen stablecoin for the global market; Startale taps M0 infrastructure for Soneium-native stablecoin USDSC; Japan Post Bank to terminate "Yucho Pay" in 2026; JCB taps IBM to overhaul core systems - targets 20% efficiency gain in strategic AI shift

• Capital Markets: Mizuho to acquire shares of Avendus Capital Private Limited; PayPay IPO postponed to first quarter 2026

• The Last Word: Artificial Intelligence Policy

Venture Capital & Private Markets

• Smooth secures ¥2.85 Billion in Series B first close to expand rental BNPL platform: Smooth, a FinTech startup disrupting the Japanese real estate market with its initial-cost installment payment service, has successfully completed the first close of its Series B funding round; the company has raised a total of approximately ¥2.85 billion (approx. USD 19.5 million), comprising both third-party equity allocation and debt financing facilities; the Series B first close consists of approximately ¥1.58 billion in equity capital and ¥1.27 billion in debt financing; the equity round was led by the Maezawa Fund, an investment vehicle established by ZOZO founder Yusaku Maezawa

• Nomura arranges USD 500m financing for Mexico's Plata: Plata, the Mexican financial technology company, has secured a new financing of up to US$500 million arranged by Nomura Securities International, the largest funding to date for a Mexican digital financial services company; the transaction also sets an important precedent: it marks the first time a Japanese top-tier investment bank participates in a financing of this scale within Mexico's digital financial sector, reflecting the growing international interest in Plata and in Mexico's financial system

• SBI Holdings' Fund invests in Vietnamese InsurTech Saladin Consulting and Technology: SBI Holdings has taken the role of lead investor in the Series A funding round for Saladin Consulting and Technology, a technology startup based in Vietnam; this investment was executed through the SBI-NTU-Kyobo Digital Innovation Fund, a Singapore-based fund managed by the SBI Group; the funding round also attracted participation from several other existing and new investors, including Monk’s Hill Ventures, Peak XV Partners, and ICMG Ventures, highlighting growing interest in the company's potential

• MUFG invests in Shriram Finance, a leading Non-Banking Financial Company in India: MUFG Bank, a consolidated subsidiary of Mitsubishi UFJ Financial Group, has entered into an investment agreement with Shriram Finance, a leading non-banking financial company (NBFC) in India, and its major shareholders, Shriram Ownership Trust and Shriram Capital, to subscribe to a preferential allotment of 20% in equity shares in Shriram Finance; the total investment amount is expected to be approximately INR 396.2 billion (JPY 682.3 billion), and the completion of this investment is subject to approvals from relevant regulatory authorities; upon completion of the Investment, Shriram Finance will become an equity method affiliate of both MUFG and MUFG Bank, and MUFG plans to appoint two directors to the board of Shriram Finance

Report on Currency and Monetary Control: Recent Economic Developments and Policy Decisions by the Bank of Japan

In December 2025, the Bank of Japan (BOJ) submitted its semi-annual "Report on Currency and Monetary Control" to the Diet, covering the developments in the first half of fiscal year 2025 (April through September). The report offers a comprehensive detailed account of the Japanese economy’s performance, financial market behavior, and the central bank’s strategic policy maneuvers during a period characterized by significant transitional pressures. As Japan continues to navigate the complex path of monetary normalization, the six-month period under review was defined by a moderate economic recovery amidst external headwinds—specifically the imposition of trade tariffs by the United States—and a definitive shift in the BOJ’s balance sheet management, including the reduction of Japanese Government Bond (JGB) purchases and the commencement of the disposal of Exchange-Traded Funds (ETFs).

The report highlights that while the domestic economy showed resilience, supported by wage growth and robust corporate profits, the global economic landscape presented heightened uncertainties. The BOJ maintained the uncollateralized overnight call rate at approximately 0.5 percent throughout the period, despite growing internal debate regarding the necessity of further rate hikes to address inflationary pressures. The period also marked a historic turning point in the Bank’s asset management, with the finalization of a detailed plan for Quantitative Tightening (QT) regarding sovereign debt and the establishment of guidelines for offloading risk assets accumulated during the era of aggressive monetary easing.

Banking

• The report of the Financial System's Council Working Group on "Strengthening Regional Financial Capabilities": released on December 18, 2025, the final report of the Financial Services Agency’s "Working Group on Strengthening Regional Financial Capabilities" outlines a comprehensive strategy to fortify Japan's regional banking sector against the headwinds of severe demographic decline and economic contraction; the document argues that for regional economies to survive, local financial institutions must evolve beyond their traditional lending roles to become multifaceted hubs of consulting, human resources support, and digital transformation; the working group emphasizes that while regional banks currently maintain sufficient soundness, the disparity in performance is widening, particularly among credit unions and credit associations, necessitating urgent structural and legislative reforms

• SBI Sumishin Net Bank's renaming, capital restructuring & strategic collaboration: NTT DOCOMO, Sumitomo Mitsui Trust Bank, and SBI Sumishin Net Bank have decided to change the latter's trade name to "DOCOMO SMTB Net Bank" effective Monday, August 3, 2026; this name change is subject to approval by the relevant authorities; additionally, with the aim of further growth of SBI Sumishin Net Bank and strengthening the partnership between DOCOMO and Sumitomo Mitsui Trust Bank in joint management, a capital restructuring of SBI Sumishin Net Bank will be implemented on Thursday, December 25, 2025; furthermore, collaborative initiatives aimed at creating new value by leveraging each company's management resources will be launched iteratively

• MUFG Bank integrates Private AI’s de-identification technology to bolster ‘OCEAN’ big data platform: MUFG Bank has formally adopted a data de-identification solution provided by Toronto-based Private AI to enhance its proprietary big data infrastructure, "OCEAN"; the strategic move is designed to accelerate the bank’s utilization of unstructured data while maintaining rigorous privacy governance; by automatically detecting and redacting Personally Identifiable Information (PII) and sensitive data with high precision before it enters the "OCEAN" data lake, MUFG aims to enable safe, cross-sectional data analysis

• The Bank of Japan Institute for Monetary and Economic Studies (IMES) has published "Towards a Macroeconomic Model of Banking Crises"

Payments

• Amendments of the Payment Services Act released for public comment: Released on December 16, 2025, following the passage of the amendment law in June, these documents outline a sophisticated regulatory framework that touches upon stablecoins, crypto-asset intermediaries, and cross-border fund transfers; the regulator has opened a public consultation period extending through January 19, 2026, signaling a final opportunity for stakeholders to influence the technical standards that will govern the next generation of Japanese FinTech; the released materials, comprising a high-level summary of the reforms and a granular "New-Old Comparison Table" of the enforcement orders, as well as 30+ individual revisions, reveal a two-pronged strategy by the Japanese government; on one hand, the administration is striving to liberalize the market by allowing more flexible asset management for stablecoin issuers and easing capital burdens for high-tier funds transfer providers; on the other hand, it is tightening the screws on the burgeoning intermediary sector, mandating strict domestic asset retention and imposing rigorous disclosure requirements to prevent capital flight and protect retail investors

• TMN taps DeCurret DCP for digital currency push in Japan’s distribution sector: Transaction Media Networks (TMN) and digital currency operator DeCurret DCP have launched a strategic collaboration aimed at developing new settlement services for the distribution sector utilizing the digital currency DCJPY; the partnership seeks to integrate TMN’s established payment gateway infrastructure with DeCurret’s blockchain-based platform to accelerate the practical adoption of tokenized deposits in retail and wholesale environments

• SBI Holdings and Startale Group partner to develop a compliant Yen stablecoin for the global market: SBI Holdings and Startale Group have signed a Memorandum of Understanding (MOU) to jointly develop and launch a regulated Japanese yen-denominated stablecoin in compliance with Japan’s financial regulations; through this Project, SBI Holdings and Startale will combine Startale’s blockchain technology and product expertise including the issue of stablecoin with SBI’s extensive financial infrastructure and regulatory leadership to build a trusted digital yen as a trust-based Type 3 Electronic Payment Instrument, which is not subject to the ¥1 million limit on domestic remittances and fund balance in Japan

• Case Study - Startale taps M0 infrastructure for Soneium-native stablecoin USDSC: Startale, the Web3 fintech company and core developer behind the Soneium blockchain, has launched the Startale USD (USDSC), a new digital dollar designed to anchor the ecosystem’s financial infrastructure; the issuance leverages the stablecoin-as-a-service platform M0 to manage backend liquidity and compliance

• Japan Post Bank to terminate "Yucho Pay" in 2026: Japan Post Bank has officially announced that it will be discontinuing the Yucho Pay service; while the service has been running since 2019, the bank has decided to wind down operations over the next year; previously, Uniqlo announced that it would be shutting down "UNIQLO Pay," the QR code payment feature on its official smartphone app, the "UNIQLO app," in January 2026, so this makes Japan Post Bank the second operator to terminate its payment service

• JCB taps IBM to overhaul core systems - targets 20% efficiency gain in strategic AI shift: JCB, Japan’s only international payment brand, has entered into a strategic AI partnership with IBM Japan to fundamentally restructure its core system development; by integrating IBM’s Generative AI platform, watsonx, JCB aims to transition away from traditional labor-intensive development models, positioning AI as a central "joint development partner" to drive cost reductions and accelerate speed-to-market

Capital Markets

• The Third "Market System Working Group" on Insider Trading & Market Manipulation: Japan’s Financial Services Agency took a decisive step toward tightening the reins on capital market misconduct today as the Financial System Council’s Market System Working Group convened to finalize its draft report; in a session characterized by broad consensus among legal experts, academics, and industry representatives, the council outlined a comprehensive regulatory overhaul designed to modernize Japan’s insider trading rules and significantly stiffen financial penalties for market manipulation; the meeting, which effectively concluded the group's current deliberations, signals an imminent legislative push to enhance market transparency and align Japan’s enforcement capabilities with global standards

• Mizuho to acquire shares of Avendus Capital Private Limited: Mizuho Securities, a consolidated subsidiary of Mizuho Financial Group, has entered into an agreement with the majority shareholder of Avendus Capital Private Limited to acquire over 60% of the shares of Avendus, subject to regulatory approvals; after completion of the acquisition, Avendus will become a consolidated subsidiary of Mizuho Securities; as India’s largest investment bank and a full-service financial services firm, Avendus offers services in institutional equities, wealth management, and asset management, bringing together a comprehensive suite of capabilities to serve clients throughout their financial journey

• SoftBank is racing to close a $22.5 billion funding commitment to OpenAI by year-end through an array of cash-raising plans, including a sale of some investments, and could tap its undrawn margin loans borrowed against its valuable ownership in chip firm Arm Holdings; PayPay's initial public offering, originally expected this month, was pushed back due to the 43-daylong U.S. government shutdown, which ended in November; PayPay's market debut, likely to raise more than $20 billion, is now expected in the first quarter of next year

• The NLI Research Institute has published "Investors' Trading Trends in the Japanese Stock Market: An Analysis for November 2025"

• Amova Asset Management has published its "Japan Equity Outlook 2026"

The Last Word: Artificial Intelligence Policy

NEDO's Strategic Analysis: the Untapped Potential of Proprietary Enterprise Data in AI

The rapid emergence of Generative AI represents a monumental technological leap, but the long-term trajectory of its advancement now faces a critical threat: an impending data exhaustion problem. The vast, publicly accessible datasets that fueled the current generation of models are finite and are being consumed at an unsustainable rate. The core thesis of this analysis is that the solution to this bottleneck lies not in finding more public data, but in unlocking the immense, untapped potential of proprietary enterprise data. This will be achieved through a new infrastructure paradigm known as "data spaces." The linked post provides a strategic analysis of this challenge, outlines the data space framework as the definitive solution, and quantifies the multi-trillion-yen market opportunity it is poised to create, based on the New Energy and Industrial Technology Development Organization's (NEDO's) document published earlier in 2025.

Policy Briefing: The Artificial Intelligence Basic Plan

Japan's new AI Basic Plan, released as a draft on December 19, is framed as a national "counteroffensive" designed to reverse a perceived lag in artificial intelligence investment and utilization. The strategy directly confronts long-standing domestic challenges—including population decline, labor shortages, and stagnant wages—by positioning AI as a core engine for economic and social revitalization. Acknowledging that it has fallen behind global competitors, Japan recognizes that the global competitive landscape for AI is shifting. The market is beginning to evaluate the creation of specific, high-value applications more than the sheer scale of investment in foundation models, presenting a critical opportunity.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

The week commencing December 15 will very much be the last week of significant business activity for the calendar year. The Diet will have its last session, and the Bank of Japan will raise the policy rate to 0.75% at its Monetary Policy Meeting (all economists agree, and who would dare to disagree with the esteemed economists). What economists disagree on is the terminal rate, with forecasts generally ranging from 1% (one more hike in 2026) to 1.5% (two more hikes in 2026, and one in 2027).

The Nikkei brought up an interesting wrinkle on the supplementary budget. The bill allowing for the issuance of deficit-financing bonds has a five-year term that ends in 2026. The ruling coalition does not have the votes to extend it, so it will require some give-and-take with the opposition. Previous situations like this have led to a prime minister being forced to resign (Naoto Kan), for example. We have added the extension to our "things to watch in 2026" list.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: NEC Invests in PopID to accelerate global expansion of biometric payment solutions; MS&AD Ventures participates in Interchange's seed round; Indonesia’s digital credit unicorn Kredivo Group is said to have secured more than $100 million in fresh funding led by long-time backer Mizuho Bank

• Insurance: SMBC Group establishes joint venture company for insurance agency business; InsureMO and FPT Japan enter into strategic partnership

• Banking: Mizuho's Finance-specialized LLM achieves passing level on banking exams

• Payments: Hokkoku Financial Holdings further expands the use of its deposit-based stablecoin "Tochika"

• Capital Markets: SBI Shinsei Bank will re-enter the public markets on December 17; FUNDINNO went public on the Tokyo Stock Exchange Growth Segment; the TSE's measures in response to IPO fraud

• Asset Management: Nissay Asset Management (NAM) has been appointed by the Government Pension Investment Fund (GPIF) to conduct research on impact investing; Folio's "ROBOPRO Fund" net assets exceed JPY 200bn

• Digital Assets: Animoca Brands Japan has signed a Memorandum of Understanding (MOU) for strategic cooperation in the Digital Asset Treasury (DAT) domain with Solv Protocol; SyFu has entered into a strategic partnership with Finverse

• The Last Word: Key Insights from the FSA's Third "AI Public-Private Forum"

Venture Capital & Private Markets

• NEC Invests in PopID to accelerate global expansion of biometric payment solutions: NEC Orchestrating Future Fund, an ecosystem-based corporate venture capital (CVC) fund, has invested in PopID, a U.S.-based provider of face authentication payment services; the investment strengthens NEC’s position in next-generation digital transactions by combining its world-leading biometric authentication technology with PopID’s rapidly growing payment platform; together, NEC and PopID aim to establish a new global standard for secure, seamless, and privacy-centric digital transactions, delivering convenience for consumers and efficiency for businesses

• MS&AD Ventures participates in Interchange's seed round: Interchange, a financial infrastructure company, has completed two significant operational milestones: a $17 million seed funding round, and the receipt of comprehensive regulatory approvals for its wholly-owned subsidiary, Interchange Clearing LLC; the dual announcement positions Interchange as a formidable new entrant in the securities clearing space, a sector historically dominated by legacy institutions; by combining capital injection with regulatory clearance, the company intends to launch a modern correspondent clearing firm and developer platform designed to overhaul how FinTechs and financial institutions connect to U.S. markets

• Indonesia’s digital credit unicorn Kredivo Group is said to have secured more than $100 million in fresh funding led by long-time backer Mizuho Bank; the deal, structured with a sizeable secondary component, is aimed at providing long-pending liquidity to early shareholders, including Jungle Ventures, Alpha JWC Ventures, and MDI Ventures, rather than meeting the company’s capital needs, according to DealStreet Asia

New Fund

• Olympus, a global MedTech company committed to making people’s lives healthier, safer, and more fulfilling, has announced an additional commitment to its corporate venture capital fund, Olympus Innovation Ventures, LLC (OIV), with the launch of Olympus Innovation Ventures Fund II; building on the success of the initial fund, Olympus will deploy $150 million, triple the predecessor fund, to invest in promising MedTech startup companies focused on Gastrointestinal (GI), Urology and Respiratory

Reports

• Inbound investment reaches 18-year high: Japan was one of the most active APAC M&A markets in 2025, with take-private transactions and inbound acquisitions both hitting multi-year highs; M&A by value to December 1 rose to USD207.5bn, more than double the total for 2024, according to A&O Shearman

• Japan's Financial Services Agency (FSA) is advancing two primary programs aimed at strengthening the real economy and improving business financing, one of which is the Enterprise Value Charge (EVC, 企業価値担保権), a new form of security interest that will be launched when the Business Lending Promotion Act (事業性融資推進法) is coming into force on May 25, 2026; simply put, the Enterprise Value Charge is a legal tool that allows businesses to use their entire value—including all current and future-acquired assets—as collateral for a loan; this goes beyond tangible assets to include the intangible strengths that make a specific business unique: things like customer relationships, a team's know-how, and future earning potential; this right is legally established through a licensed trust company, which holds the security interest on behalf of the lender, ensuring the process is formal and regulated

Key Directives and Priorities of Japan's Financial Services Agency

Japan's Financial Services Agency (FSA) meetings with various financial industry associations (on a rotating basis) provide an opportunity to assess the FSA's primary focus areas, significant regulatory shifts, and key initiatives. From the recently published materials from the October 2025 round of discussions, we see the following developments.

1. The Definition of Operational Resilience Has Expanded. The FSA now defines baseline compliance as an integrated capability encompassing geopolitical awareness, anti-fraud agility, and rapid crisis response. Adherence to international sanctions, the swift implementation of enhanced digital KYC, and effective disaster support are no longer separate issues but a single, holistic expectation of institutional resilience.

2. Align Corporate Strategy with the 'Asset Management Nation' Megaproject. This initiative should not be viewed as a standalone opportunity but as the central organizing principle for growth in Japanese finance for the foreseeable future. The agenda's influence over tax policy, product governance, international promotion, and competition makes strategic alignment an imperative for any firm seeking to capitalize on market evolution.

3. Prepare for Deeper, Thematic Supervisory Interventions. The FSA's significant restructuring signals a clear move away from siloed supervision toward more specialized, cross-cutting oversight. Executives must prepare for scrutiny that cuts across traditional business lines, focusing on systemic and emerging risks such as AI governance, interest rate exposure across portfolios, and the fundamental viability of sector-specific business models.

4. Master the Duality of Digitalization: Innovation vs. Infiltration. The FSA is creating a dual mandate for technology. While actively promoting innovation through forums on AI, it is simultaneously demanding more sophisticated defenses against digital financial crime. This requires a balanced strategic approach that treats technology investment not just as a driver of growth but as an essential component of a robust, modern defense against infiltration.

Insurance

• SMBC Group establishes joint venture company for insurance agency business: Ginsen, Mitsui Sumitomo Insurance Company, and Sumitomo Mitsui Financial Group have agreed to establish a jointly invested insurance agency business company on April 1, 2026; the insurance agency business of Ginsen and the corporate business division of Mitsui Sumitomo Insurance Agency Service, a 100% subsidiary of Mitsui Sumitomo Insurance, will be integrated and established as a consolidated subsidiary of Ginsen and an equity-method affiliate of Mitsui Sumitomo Insurance

• InsureMO and FPT Japan enter into strategic partnership: InsureMO has entered into a strategic partnership with FPT Japan, a subsidiary of FPT Corporation; the partners aim to fully support business reforms at domestic insurance companies, leveraging their extensive experience in nearshore development and their high-quality, cost-competitive development system; InsureMO provides a flexible and scalable middle office platform for the insurance industry; it has already been adopted by approximately 30 companies in Japan, and boasts numerous implementations in the global market; FPT has advanced ICT solutions and a wealth of development experience in the insurance industry

Banking

• Mizuho's Finance-specialized LLM achieves passing level on banking exams: Mizuho Financial Group has developed a "finance-specialized LLM (Large Language Model)" trained on banking-specific business knowledge, rules, and procedures, which has achieved passing-level performance on banking practical exams; this model has acquired complex industry-specific rules and regulations unique to the financial sector, as well as internal procedures and business knowledge not typically learned by general AI systems; with this achievement, Mizuho aims to first improve internal operational efficiency and, in the future, dramatically enhance service quality for customers by moving into the development and verification phase for application to more specialized business areas

Payments

• Hokkoku Financial Holdings has enabled the charging of the deposit-based stablecoin "Tochika" from the deposit accounts of Noto Kyoei Shinkin Bank and Hakusan Shinkin Bank, using the digital local currency app "Tochitsuka"; Tochitsuka aims to be a payment system that can be used by individual customers and businesses regardless of their financial institution, and with this latest move, Tochika can now be used by all Shinkin banks with their head offices in Ishikawa Prefecture (Kono Shinkin Bank, Kanazawa Shinkin Bank, Noto Kyoei Shinkin Bank, and Hakusan Shinkin Bank)

Capital Markets

• SBI Shinsei Bank will re-enter the public markets on December 17; the shares were priced at 1,450 yen ($9.34) apiece, compared with a range of 1,440 yen to 1,450 yen, giving the bank a market value of 1.3 trillion yen ($8.37 billion)

• In the inaugural Financial Center Competitiveness Index (FCCI), published by New York University in Abu Dhabi, Tokyo ranks fifth behind New York, London, Singapore and Hong Kong

• FUNDINNO went public on the Tokyo Stock Exchange Growth Segment on December 5, 2025, at the top of the indicated range from JPY 600 to 620. FUNDINNO is the architect of a new, more equitable startup financing landscape for Japan; FUNDINNO's core mission is to fundamentally redesign the flow of capital, talent, and information to power the next generation of innovators; learn how Japan's largest crowdfunding platform is scaling into a full ecosystem play

• The TSE's measures in response to IPO fraud: in response to recent cases of accounting fraud involving companies going public, the Tokyo Stock Exchange (TSE) and Japan Exchange Regulation (JPX-R) are introducing a new set of measures; the primary goal of these new rules is to enhance the quality of the listing examination process and prevent similar fraudulent activities from happening again; this is a collaborative effort, involving not just the exchange but also other key stakeholders in the Initial Public Offering (IPO) process

• Nomura has published its Individual Investor Survey for December 2025: the Nomura Individual Investor Market View Index (Nomura I-View Index), based on respondents' three-month outlook for share prices and calculated by subtracting the percentage of responses for "fall" from that for "rise," was 35.8 in December 2025, up 20.00pt from the previous survey

• The Bank of Japan has published "Trends in the Money Market in Japan"

Asset Management

• Nissay Asset Management (NAM) has been appointed by the Government Pension Investment Fund (GPIF) to conduct research on impact investing; this research engagement was publicly solicited in connection with GPIF’s deliberations on “impact-informed investment,” as outlined in its Fifth Mid-Term Plan and Sustainability Investment Policy; following a competitive proposal process, the NAM was selected as the contractor

• Folio's "ROBOPRO Fund" net assets exceed JPY 200bn: the "ROBOPRO Fund", established on December 28, 2023 by SBI Okasan Asset Management, surpassed 200 billion yen in net assets on December 9, 2025; this milestone was reached approximately 3.5 months after surpassing 100 billion yen in net assets on August 22 of this year; the Fund receives investment advice based on the "ROBOPRO®" investment strategy from FOLIO, a subsidiary of FOLIO Holdings, and is managed by SBI Okasan Asset Management

Digital Assets

• Animoca Brands Japan has signed a Memorandum of Understanding (MOU) for strategic cooperation in the Digital Asset Treasury (DAT) domain with Solv Protocol, the Bitcoin decentralized finance (BTCFi: Bitcoin DeFi) protocol; under this agreement, Animoca Brands Japan and Solv Protocol will support Japanese listed companies in holding and managing Bitcoin

• SyFu has entered into a strategic partnership with Finverse, one of Asia-Pacific’s leading open banking platforms headquartered in Hong Kong; through this partnership, bank and card payment data from Hong Kong, Singapore, the Philippines, Vietnam, and Malaysia can now be integrated directly into the SyFu app; following integrations in Japan (Money Forward) and Europe (Salt Edge), the partnership with Finverse allows SyFu to establish a truly global data connectivity network, covering major Asian markets as well

The Last Word: Key Insights from the FSA's Third "AI Public-Private Forum"

Japan's Financial Services Agency (FSA) has recently published the minutes for its third AI Public-Private Forum, held on November 5, 2025, which brought together a distinguished group of experts to chart a course for the responsible use of Artificial Intelligence in the financial sector. The forum's primary goals are to tackle the complex challenges of protecting personal information in the age of AI and to share practical, real-world strategies for managing the risks of AI in customer-facing services.

The participants broadly agreed on three key areas requiring collective action:

• Knowledge Sharing & Guidelines: There is a strong desire for collaborative efforts to share best practices on risk management and establish industry-wide guidelines, similar to what was successfully done two decades ago to ensure safety in the rollout of internet banking.

• Regulatory Clarity & Sandboxes: The industry needs clearer regulatory interpretations for how existing laws apply to AI (e.g., at what point does an AI's recommendation become a regulated "solicitation"?). There was also a call for "sandbox" environments—safe, controlled settings where firms can test new AI services without facing full regulatory consequences, allowing for innovation with oversight.

• Evolving Governance: Participants recognized that AI governance cannot be a "set it and forget it" policy. It must be a dynamic process that evolves with the technology. This requires continuous monitoring and, critically, a focus on fostering risk awareness and sensitivity among frontline employees, who are the "first line of defense" in identifying potential AI-related issues

For business leaders and analysts, the key takeaway is that the financial industry's adoption of AI is far more than a technological race. It is a complex and strategic effort to carefully balance the pursuit of innovation with the foundational pillars of risk management, regulatory compliance, and, most importantly, public trust.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

Last week, we were delighted to participate in the "ICT & FinTech Mission to Tallinn" this past week, courtesy of EIS | Enterprise Estonia. As we are settling down back home, we are iteratively reporting on the very insightful discussions on the FinTech Observer website.

While we were away, the expectations for the next Bank of Japan policy rate raise have decisively moved to December given Ueda's comments at the beginning of the week. Those who are parsing through the language with a fine comb noticed that his statement was not quite as final as Himino's prior to the January rate hike, but this nuance got lost. Being the only G10 central bank that has raised rates this year, the markets are convinced the BOJ will move the policy rate to 0.75% on December 19.

Lastly, the Financial Services Agency has published its annual report for the FY2024 administrative year. At 400+ pages, it provides comprehensive insights into the operations of our regulator. We offer a compressed version.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Pie Systems has raised a total of $15.5 million (approximately ¥2.3 billion) in its Series A funding round; Mujin raises US$ 233m to accelerate global growth and drive the future of intelligent automation; micromobility sharing company Luup Raises JPY 4.4bn in total funding; Mizuho Capital participates in LUC Corporation's 120 million yen Pre-Series A funding round; FSA & METI roundtable on growth funding for startups

• Insurance: Manulife reaches agreement to sell MVI Life in Vietnam to Asahi Life

• Banking: draft report of the Financial System Council's Working Group on Strengthening Regional Financial Capabilities; Snowflake Industry Days - data fabric implementation and governance at Sumitomo Mitsui Trust Group; Mizuho releases Generative AI-powered platform "Wiz Base" for sales support

• Payments: NETSTARS supports QNB Group in becoming the first bank in GCC to accept WeChat Pay e-commerce; Filipinos in Japan can now directly send remittances to their loved ones' GCash accounts

• Capital Markets: Nomura and World Vision Japan to develop credit scheme through Japan’s Joint Crediting Mechanism; the Bank of Japan selects Sumitomo Mitsui Trust Bank as ETF sales agent

• Asset Management: Ambit Global Private Client cements market leadership with strategic investment from Daiwa Securities Group; ABCash Technologies is beginning a collaboration with the investment trust service "mattoco+ (Mattoco Plus)"

• Digital Assets: Nomura issues security tokens backed by domestic VC fund beneficial interest using J-Ships scheme; MUFG to launch tokenized money market fund; First 30 billion yen scale, high-grade office security token collaboration for "ALTERNA"; SBI VC Trade & Sapporo Beer launch brand experience PoC using web3 technology

• The Last Word: JGB Chartware

Venture Capital & Private Markets

• Pie Systems has raised a total of $15.5 million (approximately ¥2.3 billion) in its Series A funding round: Pie System is advancing the digital transformation of duty-free procedures; this round included participation from Builders VC, Coral Capital, DG Ventures, Green Visor Capital, Plug and Play Japan, New Commerce Ventures, Dreamcraft Ventures, MATH Venture Partners, Context Ventures, and other individual investors

Not FinTech

• Mujin raises US$ 233m to accelerate global growth and drive the future of intelligent automation: Mujin, a global leader in automation technology, has successfully completed the first close of its Series D funding round, raising a total of US$ 233 million through a combination of equity and debt financing; Mujin raised $133 million in equity from investors with NTT Group as the lead investor, followed by Qatar Investment Authority (QIA) as the co-lead investor, Mitsubishi HC Capital Realty, and Salesforce Ventures

• Micromobility sharing company Luup Raises JPY 4.4bn in total funding: SMBC Venture Capital and Resona Asset Management participate on the equity side, Sumitomo Mitsui Banking Corporation was the arranger and Mizuho Bank the co-arranger for a syndicated green loan

• Mizuho Capital participates in LUC Corporation's 120 million yen Pre-Series A funding round: LUC operates the AI×experience analysis platform “TERUS”

Reports

• Roundtable on growth funding for startups: in order to further revitalize the startup ecosystem, it is important for each entity involved in funding startups to share a common understanding of the direction the ecosystem should aim for, further strengthen funding for startups, support their growth, and ensure that the benefits are reaped by each entity involved; to this end, the Financial Services Agency and the Ministry of Economy, Trade and Industry (METI) jointly held a Roundtable on Growth Funding for Startups, bringing together the government and various entities that support the provision of funds to startups, and shared recognition regarding the direction and overall picture of the ecosystem that should be aimed for, as well as the efforts of each entity; with 14 different entities presenting, this article consolidates the various status updates and recommendations into one policy proposal

• PitchBook has published an updated "Japan Private Capital Breakdown 2025"

• Dell Technologies & Global Invest Her have published a "Tokyo Funding Blueprint"

Insurance

• Manulife reaches agreement to sell MVI Life in Vietnam to Asahi Life: Manulife Financial Corporation, through its direct subsidiary The Manufacturers Life Insurance Company (collectively “Manulife”), has entered into an agreement to sell MVI Life to Asahi Mutual Life Insurance Company (“Asahi Life”); MVI Life, formerly known as Aviva Vietnam, was acquired by Manulife in 2021; since the acquisition, MVI Life has operated independently as a separate life insurance entity, fully distinct from Manulife Vietnam; MVI Life generated insurance premiums of approximately US$ 93 million in 2024 and had net assets of approximately US$ 134 million as of the end of 2024

Banking

• Draft report of the Financial System Council's Working Group on Strengthening Regional Financial Capabilities: Regional Financial Institutions (RFIs) are the cornerstone of Japan's local economies; as outlined in the "Working Group on Strengthening Regional Financial Capabilities" draft report, their role extends beyond simple financing to become a driving force for regional economic vitality; however, their capacity to fulfill this critical function is under threat from profound structural challenges; persistent population decline, the shrinking scale of regional industries, and an emerging bifurcation in the financial health of RFIs are creating an environment of uncertainty that demands a proactive policy response

• Snowflake Industry Days - Data fabric implementation and governance at Sumitomo Mitsui Trust Group: the Snowflake Industry Days 2025 Japan took place in November, with a Financial Services track session featuring Trust Base and the Sumitomo Mitsui Trust Group, titled "Connecting Sumitomo Mitsui Trust Group: Implementation and Governance of the Data Fabric Concept"; the presentation highlighted the architectural shift from on-premise, waterfall-based development to a cloud-native, agile methodology; key achievements include the reduction of manual Excel processing, the integration of third-party market data via Snowflake’s marketplace, and the establishment of a governance model that balances "offensive" data utilization with "defensive" data protection

• Mizuho releases Generative AI-powered platform "Wiz Base" for sales support: Mizuho Financial Group is releasing the generative AI-powered platform "Wiz Base" and will earnestly promote large-scale PoCs (Proof of Concepts) in anticipation of full-scale implementation of AI utilization in the sales support domain; Wiz Base is a platform built by Mizuho on Amazon Web Services (AWS) to operate AI agents; it adopts a multi-LLM configuration that can safely integrate multiple models, including Claude (by Anthropic), using Amazon Bedrock, and is designed based on Mizuho's defined "AI Oriented Architecture (AIOA)"; this realizes a multi-agent system where multiple agents collaborate to perform tasks while ensuring the reliability, auditability, and authority control required of financial institutions

• MUFG has published its "Transition Whitepaper 2025": One year has passed since the publication of the “MUFG Transition Whitepaper 2024” in September last year, and the international landscape surrounding Carbon Neutral (CN) has undergone unprecedented changes; in Whitepaper 4.0, MUFG examines the rapidly evolving global environment by summarizing CN strategies and investment trends not only in Europe and the United States, but also in China, India, and ASEAN countries

• SMBC Group has signed a memorandum with the Ministry of Finance concerning cooperation in combating money laundering

Payments

• NETSTARS supports QNB Group in becoming the first bank in GCC to accept WeChat Pay e-commerce: TSE-listed NETSTARS has supported QNB Group, the largest financial institution in the Middle East and Africa, in successfully becoming the first bank in GCC to enable Weixin Pay e-Commerce acceptance, working closely with Darwish Holding to make this achievement possible; by integrating Weixin’s extensive e-commerce ecosystem into the GCC, this collaboration fosters greater financial inclusivity and drives digital innovation; customers can now enjoy safe, seamless and secured transactions at local merchants, enhancing their overall shopping experience

• Filipinos in Japan can now directly send remittances to their loved ones' GCash accounts: in a statement, the fintech giant said it has partnered with the operator of the Japanese fund transfer platform PayForex; under the partnership, GCash has been integrated into PayForex, allowing overseas Pinoys to transfer money to the GCash accounts of their families in the Philippines; this means they will no longer need to go to a remittance center to send money home

Capital Markets

• Nomura and World Vision Japan to develop credit scheme through Japan’s Joint Crediting Mechanism: Nomura Securities has signed a memorandum of understanding (MOU) with World Vision Japan (WVJ), a specified non-profit organization, to support the development of new projects using Japan’s Joint Crediting Mechanism (JCM); Nomura has been actively engaged in research, framework design, and market development in the JCM space; in June 2025, Nomura became the first financial institution to be selected by Japan’s Forestry Agency to do a field survey in Cambodia for a JCM afforestation project developed jointly with SDG Impact Japan; the project was commissioned under the Forestry Agency’s FY2025 Forest Project Collaboration Promotion Program in Developing Countries

• The Bank of Japan selects Sumitomo Mitsui Trust Bank as ETF sales agent

• Nomura has published its quarterly "Outlook for FY25-26 Corporate Earnings"

• The Ministry of Finance has published its JGB Newsletter for December 2025, covering several events relevant to JGB investors

Asset Management

• Ambit Global Private Client cements market leadership with strategic investment from Daiwa Securities Group: Ambit Global Private Client, the wealth management arm of the Ambit Group - one of India’s premier financial services conglomerates, announced a landmark strategic development; Daiwa Securities Group has entered into a definitive agreement to acquire a minority stake in Ambit Wealth Private Limited; this all-primary capital infusion of approximately USD 32m marks the expansion of a thriving partnership between the groups poised to capture the exponential value creation within India’s $11.6 trillion wealth management opportunity

• ABCash Technologies is beginning a collaboration with the investment trust service "mattoco+ (Mattoco Plus)," jointly operated by Mitsubishi UFJ Asset Management and SmartPlus; through this collaboration, mattoco+'s investment seminar content will be posted on ABCash's "Money Training" platform for students to view, aiming to build a new support system that allows those with no investment experience or beginners to debut as investors with confidence

• The Financial Services Agency has released a special website with an "Overview of Japan's Special Zones": previously, the FSA selected the four regions, Hokkaido/Sapporo, Tokyo, Osaka/Osaka City, and Fukuoka/Fukuoka City, as Special Zones for Financial and Asset Management Businesses, and they are actively working to enhance their business and living environments, provide fiscal and tax support, and promote growth industries

Digital Assets

• Nomura issues security tokens backed by domestic VC fund beneficial interest using J-Ships scheme: Nomura Holdings, Nomura Asset Management, Nomura Trust and Banking, and BOOSTRY have completed issuance procedures for the “Nomura Private Series B Dash Fund 5 Tokenized VC Fund (Transfer-Restricted)”, a private placement security token totaling approximately 8 billion yen; the Fund is Japan’s first security token to invest in venture capital (VC) funds and the first to use the J-Ships framework for professional investors (“Tokutei Toushika”); recordkeeping and transfers of investor’s beneficial interests will be conducted on the consortium blockchain platform “ibet for Fin,” developed and led by BOOSTRY

• MUFG to launch tokenized money market fund: Mitsubishi UFJ Asset Management, Mitsubishi UFJ Morgan Stanley Securities, and Mitsubishi UFJ Trust and Banking, together with Progmat, will commence collaboration on infrastructure development for a "Tokenized Money Management Fund" as the first step toward developing Japan's first tokenized investment trust; first, MUFG will proceed with preparations aiming to provide Japan's first yen-denominated TMMF to institutional investors in 2026; in the future, MUFG will also consider gradual expansion of target customers and product lineups, including offerings for individual investors

• First 30 billion yen scale, high-grade office security token collaboration for "ALTERNA": ALTERNA Trust, Mitsui & Co. Digital Asset Management, Daiwa Securities, and Progmat have completed the fundraising and issuance for the security tokenization (ST) of "Mitsui & Co. Group Digital Securities - Nagoya Prime Office - (Transfer Restricted)"; this project marks the first ST issuance for both ALTERNA Trust, which began operations on July 3, 2025, and the "ALTERNA" brand asset management service developed and provided by MDM

• SBI VC Trade & Sapporo Beer launch brand experience PoC using web3 technology: this campaign commemorates the renewal of "Sapporo Draft Beer Black Label THE BAR," a flagship beer bar opened by Sapporo Beer in 2019 under the concept "The most delicious moment for beer is the first glass of the day"; this initiative represents the "Sapporo Draft Beer Black Label" brand—which continuously pursues the "deliciousness of draft beer" and a unique "sophisticated adult atmosphere"—challenging itself to create new experiential value by utilizing Web3 technology; SBI VC Trade supports this initiative by providing technology including NFT issuance and management

The Last Word: JGB Chartware

Mohamed El-Erian commented: "Despite a solid bond auction, Japanese government bond yields have continued to climb — reaching highs not seen in nearly 20 years. While this rise has added some upward pressure on global yields, the spillover effects remain fairly well contained for now."

Bloomberg on the development of 10-year government bond yields across major economies.

Bloomberg, as reported in the Financial Times, charting a narrowing yield gap with the US, but a weakening yen.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published here on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

Congratulations to the team at Wise, who became the first money transfer operator to complete integration with the Zengin interbank-settlement network. The timing could not have been better, as we are spending this week in Estonia, courtesy of Enterprise Estonia, to assist with building FinTech bridges to Japan. We will have a lot to share next week!

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Saison Capital and Taisu Ventures participate in Pruv Finance's Pre-Series A; estie raises JPY 2.2bn debt financing; Resona Bank and Fivot establish "RFC Venture Debt Fund 1"; Incubate Fund Asia is kicking off a fundraising spree with its fourth India-focused seed fund

• Insurance: Fujitsu has launched the Japan Edition of SAP Fioneer Cloud for Insurance

• Banking: Credit Saison Second Quarter Financial Results; Raksul Group launches financial platform "Raksul Bank"; Money Forward functions to be integrated into SMBC Bank and Sumitomo Mitsui Card apps

• Payments: Sony Bank aims become the first Japanese company to issue and distribute a dollar-denominated stablecoin in the United States; Wise becomes first money transfer operator to complete Zengin integration; Shinoken Group and JAPAN POST BANK start tokenized deposits PoC; Suica & PASMO evolve - introducing teppay

• Capital Markets: Alpaca launches US stock execution service for SBI Securities

• Digital Assets: THXLAB and TOPPAN Digital provide dedicated Layer1 blockchain for AVATECT

• The Last Word: A spendy stimulus could test the Bank of Japan

Venture Capital & Private Markets

• Saison Capital and Taisu Ventures participate in Pruv Finance's Pre-Series A: Pruv Finance has completed its USD 3m Pre-Series A round, led by UOB Venture Management, with participation from Saison Capital, Taisu Ventures, Spiral Ventures, and Royal Group; this funding accelerates Pruv Finance's mission to build the first compliant RWA infrastructure that enables seamless, on-chain distribution of tokenized assets

• estie raises JPY 2.2bn debt financing: estie, which provides multiple services centered on "estie Market Research," Japan's largest commercial real estate data analysis platform, has concluded financing agreements totaling 2.2 billion yen with four financial institutions: Shoko Chukin Bank, MUFG Bank, Resona Bank, and Japan Finance Corporation; this includes long-term loans and long-term commitment lines; through this debt financing, combined with equity raised in the Series B round, the company has secured over 5 billion yen in total standby capital

New Funds

• Resona Bank and Fivot establish "RFC Venture Debt Fund 1": Resona Bank and Fivot have jointly established the venture debt fund "RFC Venture Debt Fund 1 Limited Investment Partnership", with the aim of expanding financing for domestic startup companies from seed to middle stage; Resona Bank, which began handling venture debt in October 2023, and Fivot, which possesses expertise in innovative AI credit models and data analysis utilizing LLMs, will leverage their know-how to strengthen startup company support and stimulate the domestic venture market

• Incubate Fund Asia is kicking off a fundraising spree with its fourth India-focused seed fund; it will launch with an initial corpus of $60 million, up from $30 million in the last fund, and the fundraising process is slated to begin next month; in parallel, the firm is evaluating a second vehicle with Japan's Sumitomo Mitsui Financial Group, targeting a corpus equal to or slightly higher than its previous $200 million fund; this vehicle is expected to hit the market in six to nine months

Not FinTech

• EnerBank Raises Series B Funding of JPY 820m: EnerBank, an energy tech company in the fields of renewable energy and decarbonization, has conducted a third-party allotment of new shares in its Series B round, with SMBC Venture Capital, Mizuho Capital, Mitsubishi UFJ Capital, and The Dai-ichi Life Insurance Company as new underwriters; this brings the total amount of Series B funding to 820 million yen, including the 580 million yen raised at the first close; in this round, SMBC Venture Capital invested in EnerBank as part of its impact investment program, and EnerBank was recognized for the social impact of its goal to "create an energy platform that accelerates decarbonization for businesses and communities"

Report

• PitchBook - Japan’s VC cosystem: High Growth & SaaS Leadership: PitchBook has released its Global VC Ecosystem Rankings (Q4 2019 to Q3 2025), providing a data-driven look at where the world’s venture capital is flowing; while the United States continues to dominate the top charts, the data reveals a compelling story for Japan, highlighting a period of significant momentum and specific vertical strengths that set it apart from its Asian peers; in the national rankings, Japan has secured a strong position as the 5th ranked country in the world with an Overall Score of 57.5

Insurance

• Fujitsu has launched the Japan Edition of SAP Fioneer Cloud for Insurance, a next-generation platform designed to support core operations for insurers in Japan; the new edition builds on SAP Fioneer’s global platform and incorporates Fujitsu’s functions, templates, and data-linkage capabilities aligned with Japanese regulatory requirements and local business processes; positioned under Fujitsu’s Uvance initiatives for the financial sector, the platform aims to support digital transformation and strengthen operational resilience for insurance companies

Banking

• In a recent webinar on the "Global Banks Outlook 2026", S&P Global Ratings stated that the Top 20 banking markets have stable trends (see chart above)

• Credit Saison Second Quarter Financial Results: Credit Saison's financial results for the first half of fiscal year 2025 (H1 FY25) present a dual narrative that is crucial for investors to understand; on one hand, the company's core domestic operations demonstrated remarkable strength, driving business profit well beyond internal targets; on the other hand, a series of special, non-recurring losses weighed on the bottom line, resulting in a slight year-on-year decline in net profit attributable to shareholders; this divergence underscores the resilience of the underlying business while highlighting the impact of discrete strategic decisions and market-specific challenges

• Raksul Group launches financial platform "Raksul Bank": Raksul Bank, a 100% subsidiary of Raksul, has officially launched its financial platform service for small and medium-sized enterprises through its partnership with GMO Aozora Net Bank; by utilizing BaaS (Banking as a Service), Raksul Bank provides a next-generation banking service that combines same-day account opening, industry-leading low transfer fees to other banks, point rewards, and secure security systems; Raksul Bank obtained a banking agency business license from the Kanto Local Finance Bureau on October 29, 2025, with GMO Aozora Net Bank as its affiliated bank; the banking services of "Raksul Bank" are provided by Raksul Bank as a banking agent commissioned by GMO Aozora Net Bank

• Money Forward functions to be integrated into SMBC Bank and Sumitomo Mitsui Card apps: Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card and Money Forward Home have decided to integrate the asset management functions of the money visualization service "Money Forward ME" into the "Sumitomo Mitsui Banking Corporation App" provided by SMBC and the "Sumitomo Mitsui Card Vpass App" provided by Sumitomo Mitsui Card, starting in March 2026; the purpose is to further enhance customer experience by introducing the asset management functions, which are Money Forward ME's strengths, to customers of the "Sumitomo Mitsui Banking Corporation App" and "Sumitomo Mitsui Card Vpass App"

Payments

• During its investor briefing, Sony Financial Group disclosed that it aims for Sony Bank to become the first Japanese company to issue and distribute a dollar-denominated stablecoin in the United States under the U.S. Genius Act; for this effort, Sony Bank will partner with Bastion Platforms, which is also a portfolio company of the Sony Innovation Fund, while Sony Bank is also considering investing

• Wise becomes first money transfer operator to complete Zengin integration: Wise Payments Japan has completed its connection to the "Zengin System", a little over a year after being granted approval, becoming the first money transfer operator in Japan to do so, enabling nearly instantaneous processing of domestic yen-denominated transfers; the Zengin System is a system that processes domestic exchange transactions between financial institutions, such as bank transfers, online; previously, participation in the Zengin System was limited to banks and similar institutions, but in 2022, eligibility was expanded to include money transfer operators, with Wise becoming the first money transfer operator to connect; additionally, Wise's connection to the Zengin System is via a newly constructed API rather than the existing relay computer system; it becomes the first money transfer operator to directly conduct current account transactions with the Bank of Japan via API

• Shinoken Group and JAPAN POST BANK start tokenized deposits PoC: DeCurret DCP has signed a basic agreement for collaboration with Shinoken Group and JAPAN POST BANK for collaboration to utilize JAPAN POST BANK's tokenized deposits; this proof-of-concept (PoC) will verify the automation and efficiency of payments utilizing tokenized deposits, using the monthly rent payments in Shinoken Group's rental management as a use case; the parties aim to complete this by the end of December 2025; based on the results, they will proceed with preparations for full-scale implementation starting in 2026

• Suica & PASMO evolve - introducing teppay: East Japan Railway Company (JR East) and PASMO have announced a landmark initiative to unify Japan's leading transit wallets with "teppay" (テッペイ), a new integrated code payment service poised to resolve growing "cashless fatigue" among consumers; the service will be integrated directly within the existing Mobile Suica and Mobile PASMO applications, eliminating the need for users to download new software; the launch is scheduled to begin in Autumn 2026 for Mobile Suica users, with Mobile PASMO users gaining access in Spring 2027; this initiative represents a significant evolution of Japan's most familiar transit payment systems, transforming them into a comprehensive "life device" designed to simplify daily commerce for millions

Capital Markets

• Alpaca launches US stock execution service for SBI Securities: Alpaca, a global leader in brokerage infrastructure APIs providing access to options, stocks, ETFs, fixed income, and crypto, has launched US stock execution service for SBI Securities, Japan’s largest online brokerage firm, providing a broader offering for US stock execution and access in Japan; Alpaca currently powers hundreds of partners across 40 countries, collectively serving over 7 million brokerage accounts; the company holds broker-dealer licenses in the US, Japan, and other jurisdictions, and recently agreed to acquire WealthKernel, a UK- and EU-licensed FinTech firm, further expanding its global service capabilities

Digital Assets

• THXLAB and TOPPAN Digital provide dedicated Layer1 blockchain for AVATECT: THXLAB, which provides the Web3 as a Service (Web3aaS) platform "THXNET.", has built a dedicated Layer1 chain called "AVATECT Chain" using THXNET. as the foundational technology for implementing blockchain functionality in "AVATECT®," a digital identity management platform developed by TOPPAN Digital; it utilizes NFT, content protection technology, and provenance information (C2PA compliant) to guarantee the authenticity of digital content and avatars, realizing reliable asset distribution and management spanning the real world and digital space

The Last Word: A spendy stimulus could test the Bank of Japan

Over the last week, Allianz Research, in their "What to watch" from November 28, described the fiscal and monetary situation in Japan most succinctly, so we take the liberty of quoting them here. The full document has been shared on our LinkedIn feed.

"The FY2025 supplementary budget, for which the Cabinet finalized the funding plan today, amounts to JPY 21.3trn (3.3% of GDP), with a large rise in direct spending. This should worsen the fiscal deficit but will not prevent public debt-to-GDP from declining.

We revise on the upside our GDP growth forecasts to +1.4% in 2026 (+1pp) and +1% in 2027 (+0.2pp), less ambitious than the government, to account for uncertainties and potential tightening of financial conditions.

Headline inflation is likely tofall below the BoJ's 2% target by early 2026 but core inflation should remain high. As a result,we keep our outlook for the next BoJ hike in January, with the policy rate ending 2026 at 1.0% and 2027 at 1.5%.

We do not think the immediate market reaction was a "Truss moment", but rather a repricing of Japan's policy mix (fiscal expansion and monetary tightening). Of the 1.8%10-year JGB yield, 1.3% is now explained by the term premium, of which 0.7% is related to fiscal risks and 0.6% to inflation risks.

We see a risk that markets may start testing the BOJ's commitment to monetary tightening, potentially forcing more aggressive interventions such as FX operations (with a likely trigger near 165 USD/JPY), an aggressive hawkish shift or resuming bond purchases to cap yields.

Ultimately, the longstanding paradigm of the JPY as a low-yielding, stable funding currency is eroding and the role of the JGB market as a provider of global liquidity will diminish, leaving global financial markets more fragile."

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.

We are hearing that now is the best time since the pandemic to visit Kyoto. You will still see some late autumn foliage, the Japanese Yen is moving closer to its 160 JPY/USD ceiling (or beyond 180 JPY/EUR) if you are a foreign visitor, and Chinese tourists have all but disappeared. Was tackling overtourism on your bingo card for Takaichi's first actions?

A supplementary budget certainly was. Coming in at JPY 17.7trn and around 2.8% of GDP, the proposed spending is more than last year-end's supplementary budget of a mere JPY 13.8trn. Given inflation, the economists we folllow see the public debt-to-GDP ratio at the end of this fiscal year still declining from the prior year. Hence no reason to panic just yet, and the revenue side will soon be bolstered by increased visa and departure fees.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: five years of UPSIDER & 100,000 client companies; KKR is seeking $15 billion of investment in its fifth Asia private equity fund; first Japan investments by General Atlantic and Bertelsmann

• Insurance: Tokio Marine acquires Agrihedge; Mitsui Sumitomo Insurance acquires stake in asset manager Barings

• Banking: Quarterly results for MUFG, SMFG, Mizuho and SuMi Trust; Japan Digital Design develops LLM specialized in financial market translation

• Payments: Nudge begins offering official credit card for "HashPort Wallet"; freee adopts Authlete; 2025 GMO Customer Satisfaction Ranking - PayPay takes top spot in "Cashless Payment Apps" category; Digital Platformer and JPYC start joint study for business alliance between JPYC and regional financial institutions; how DeCurret is building the tokenised deposit model in Japan

• Capital Markets: IG Securities to stop offering cryptocurrency ETF CFDs; the wealth effect of rising stock prices; the JSDA's "Fact Book 2025"

• Asset Management: SBI Holdings to form active ETF management joint venture with AllianceBernstein

• Digital Assets: Binance Japan and PayPay launch PayPay money integration service; PTS announces official launch of Pivotal Mining Note on Republic

• The Last Word: Global Stocks Are Forecast to Return 7.7% Annually in Coming Decade

Venture Capital & Private Markets

• Five years of UPSIDER & 100,000 client companies: on its 5th anniversary since business launch, UPSIDER's cumulative number of client companies has exceeded 100,000, and the cumulative transaction volume of its corporate card "UPSIDER" and invoice card payment service "Shiharai.com" has surpassed ¥1 trillion; In July, Mizuho acquired 70% of UPSIDER

New Funds

• KKR is seeking $15 billion of investment in its fifth Asia private equity fund, for investments across markets including Japan, India, China, South Korea and Southeast Asia; KKR will continue to focus on sectors including consumer, life sciences, financial services, healthcare and industrials

Not FinTech

• SmartHR receives US$96m strategic investment from General Atlantic, acquiring stake from Coral Capital: SmartHR, a leading cloud-native human resources management platform, and General Atlantic, a leading global investor, have announced a US$96 million (JPY¥14.6 billion) strategic minority investment from General Atlantic into SmartHR; General Atlantic acquired its stake in SmartHR from Coral Capital, which will remain a committed minority shareholder

• Sumitomo Mitsui Trust Bank participates in Tailor's USD 37m Series A extension: in this latest round, new investors include independent VCs i-nest capital and ALPHA, financial VC Fukoku CVC Fund, growth investor JP Investment, and major financial institution Sumitomo Mitsui Trust Bank; existing investors from the seed round, Global Brain and GLOBIS Capital Partners, also made additional investments

• Bertelsmann makes first-ever Japan investment in AI recruitment platform HelloBoss: HelloBoss, Asia’s leading AI-powered recruitment platform developed by Tokyo-based startup NGA, has raised Series A funding backed by international media group Bertelsmann, marking the firm’s first-ever strategic investment in Japan

• Teamshares, a tech-enabled acquiror of high-quality SMEs, to list on Nasdaq via Live Oak V Combination; Teamshares has been invested in by MPower Partners, MUFG Innovation Partners, and Nomura

Insurance

• Tokio Marine acquires Agrihedge: Tokio Marine Holdings has signed a definitive agreement to acquire Agrihedge (Commodity & Ingredient Hedging, “CIH”) for USD970 Million (Approximately JPY150.0 Billion); the transaction is expected to close during the fourth quarter of Fiscal Year 2025 (January to March 2026) subject to the receipt of regulatory approvals; CIH is a technology focused risk solutions firm which provides price volatility risk solutions for agricultural and livestock products to customers primarily in the U.S.—including agricultural producers, grain merchandisers, and other agribusiness clients—through insurance agency, derivatives brokerage, consulting and related offerings

• Mitsui Sumitomo Insurance acquires stake in asset manager Barings: Mitsui Sumitomo Insurance, a subsidiary of MS&AD Insurance Group, has agreed to acquire an 18% equity interest in Barings, an asset management company and wholly owned subsidiary of Massachusetts Mutual Life Insurance (“MassMutual”), from MassMutual for a total investment of USD 1.44bn; this investment will also enable collaboration between MS&AD Group and Martello Re, a highly creditworthy reinsurance company where MassMutual is a key investor, and which has a partnership with Barings who currently manages a majority of their assets

Banking

• MUFG Second Quarter Financial Results: as Japan's largest megabank, Mitsubishi UFJ Financial Group occupies a central position in both the domestic and global financial landscape; the company's recent disclosure of strong half-year financial results for the fiscal year ending March 2026 provides a clear window into its current operational momentum and strategic progress; this analysis examines these results in detail, evaluates the company's upwardly revised full-year guidance and shareholder return policy, and assesses the key strategic initiatives intended to drive long-term value

• SMFG Second Quarter Financial Results: SMFG has demonstrated not only resilience but solid operational momentum and significant financial outperformance; this has prompted an upward revision of its full-year forecast and provides a compelling basis for a deeper competitive evaluation; this outperformance merits a deeper evaluation of the firm's underlying financial health, its standing relative to global peers, and the strategic initiatives that will determine if this momentum is sustainable

• Mizuho Second Quarter Financial Results: Mizuho Financial Group's results for the first half of fiscal year 2025 (FY25 H1) reveal a company operating with significant positive momentum; the strong performance, coupled with an upward revision of its full-year profit outlook and an aggressive stance on shareholder value, signals a confident and assertive strategy; these results are not merely cyclical; they reflect a deliberate transformation that presents a direct and accelerating challenge to competitors in the global financial landscape

• SuMi TRUST Second Quarter Financial Results: during the first half of fiscal year 2025, Sumitomo Mitsui TRUST delivered an exceptional financial performance, culminating in a record-high net income; this robust result was driven by the successful execution of its strategy across three core pillars: strong growth in underlying business profit, a significant positive reversal in credit costs, and substantial gains realized from the strategic reduction of shareholdings; this outperformance provides a strong foundation for the significant upward revision of SuMi TRUST's full-year consolidated earnings and dividend forecasts

• Japan Digital Design develops LLM specialized in financial market translation: Japan Digital Design (JDD) has developed a 70-billion parameter large language model (LLM) called "Llama-3.3-fintranslate-JDD-70b" specialized in translating financial market-related documents; in internal evaluations using actual business data, the model achieved performance exceeding global models such as GPT-4o; additionally, JDD plans to soon begin providing a translation application utilizing this model to MUFG Bank

• The Bank of Japan has published "New Challenges for Monetary Policy"

Payments

• Nudge begins offering official credit card for "HashPort Wallet": Nudge has partnered with HashPort, provider of the Web3 wallet "HashPort Wallet" chosen by 1 million people, to begin offering the "HashPort Card" through the next-generation credit card "Nudge"; with this card, JPYC (Japanese Yen stablecoin) is provided as cashback by HashPort according to usage amounts through everyday shopping, and customers can also enjoy an original design card

• freee adopts Authlete: freee, which has been working on open APIs since 2015, was an early adopter of OAuth 2.0, an open standard for API access authorization, and has been implementing and operating its own OAuth 2.0 infrastructure; however, nearly 10 years after the launch, the rapid growth of its platform and app store has led to increased maintenance costs for its current authorization infrastructure, and scalability has become an issue; furthermore, it has become difficult to continually keep up with the latest OAuth 2.0 extension specifications and best practices

• 2025 GMO Customer Satisfaction Ranking - PayPay takes top spot in "Cashless Payment Apps" category: GMO Research & AI, a GMO Internet Group company operating in the internet research business, has announced the ranking results for the "Cashless Payment Apps" category in the 2025 "GMO Customer Satisfaction Ranking"; in the overall ranking for this category, PayPay claimed first place; the service was recognized for its convenience of being usable almost anywhere and the ease of use of its app

• Digital Platformer and JPYC start joint study for business alliance between JPYC and regional financial institutions: Digital Platformer and JPYC have commenced a joint study aimed at mutual cooperation between Japan's first Japanese Yen-pegged stablecoin "JPYC" and the deposit-backed token "Tochika," launched by Hokkoku Bank in April 2024, as well as the construction of a business alliance model with regional financial institutions; this initiative aims to promote the efficiency and digitalization of regional economies by fusing the highly reliable deposit and remittance infrastructure possessed by regional financial institutions with new financial infrastructure based on blockchain technology

• How DeCurret is building the tokenised deposit model in Japan: in conversation at the Singapore FinTech Festival 2025, Mai Kaneko, international business lead at DeCurret DCP, outlines how DCJPY is shaping Japan’s regulated ecosystem for tokenised deposits, stablecoins and potential future CBDCs across domestic and cross-border financial activity

Capital Markets

• IG Securities, the local arm of trading giant IG Group, is preparing to stop offering cryptocurrency ETF CFDs. The decision followed updated guidance from the FSA, which clarified how crypto ETF CFDs should be handled in a revised policy

• In a recent note published in the Itochu Research Institute's Economic Monitor, Senior Economist Sota Takano investigates the wealth effect of rising stock prices in Japan: "Since entering October 2025, stock prices in the Japanese market have advanced. Although they softened slightly entering November, the Nikkei Stock Average maintains high growth on a year-on-year basis. This rise in stock prices increases the value of financial assets held by households, creating an effect that boosts personal consumption (the wealth effect). Estimating the magnitude of this wealth effect reveals a relationship where a 10% increase in the real value of financial assets leads to a 0.2% increase in real consumption expenditure. This implies that if the Nikkei Stock Average hovers around the 50,000 yen level toward the end of the year, real personal consumption for the October–December 2025 quarter will increase by 0.5%, or approximately 1.8 trillion yen in actual (nominal) annualized terms. Furthermore, in recent years, the benefits of the wealth effect have expanded from the elderly to the younger generation. Supported by this wealth effect, personal consumption is expected to maintain a recovery trend."

• The Daiwa Institute of Research, as part of its coverage of ESG Investments, has published a report titled "How to Demonstrate the Link Between Non-Financial Information and Corporate Value: Challenges Revealed by Case Studies of Quantitative Analysis and Future Expectations"

• The JSDA - Japan Securities Dealers Association has published its "Fact Book 2025"

• Acuiti has published an interview with the Osaka Exchange's Kensuke Yazu

• Schroders has published its "Economics Lens" for November 2025, including a dedicated (albeit short) Japan chapter

Asset Management

• SBI Holdings to form active ETF management joint venture with AllianceBernstein: SBI Holdings has entered into a Memorandum of Understanding with AllianceBernstein, one of the world’s leading active investment firms with more than 50 years of history, for the establishment of a joint venture company in Japan specializing in active ETF management; the ownership ratio for the Joint Venture Company is planned to be 51% for the SBI Holdings and 49% for the AB Group

Digital Assets

• Binance Japan and PayPay launch PayPay money integration service: Binance Japan and PayPay have launched a PayPay Money integration service for Binance Japan's spot cryptocurrency trading; this service allows users to purchase cryptocurrencies through PayPay Money deposits and charge PayPay balance with PayPay Money from cryptocurrency sales proceeds; this integration service enables users to fund cryptocurrency purchases not only with PayPay Money but also with PayPay Points; additionally, by setting the point usage to "Use for payments" in the PayPay app in advance, users can combine PayPay Money and PayPay Points

• PTS announces official launch of Pivotal Mining Note on Republic: Pivotal Trend Service has announced the official launch of its flagship digital asset product, PMN (Pivotal Mining Note), on Republic, marking a significant milestone for the global digital securities industry; PMN becomes the first Japan-originated Security Token Offering (STO) to be compliantly offered in the United States, and the first STO launched following Republic's recent acquisition of INX; designed as a compliant, Bitcoin-linked financial product, PMN aims to transform institutional-grade Bitcoin mining exposure into an accessible, transparent, and user-centric investment opportunity; built on long-term mining infrastructure and a regulated token framework, PMN provides investors with structured, real-economy Bitcoin production over a fixed 36-month term

The Last Word: Global Stocks Are Forecast to Return 7.7% Annually in Coming Decade

Despite their high valuations, Goldman Sachs Research forecasts global stocks to return 7.7% annually in US-dollar terms over the next decade.

The key structural drivers for stock performance include nominal GDP growth, profitability, and shareholder distributions, according to Peter Oppenheimer, chief global equity strategist in Goldman Sachs Research.

The long-term forecast for global stocks uses a common framework across regions, but also accounts for local drivers. The annual returns indicated by the model vary by region.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. Our short weekly digest, the “Japan FinTech Observer”, is published on LinkedIn, on Medium, Substack & Paragraph, or on our own FinTech Observer website. Only the latter provides you with the option to subscribe to individual news stories as they are published.

Should you wish to further discuss the Japanese (or Asian) FinTech ecosystem, you may book a consultation via Intro - all proceeds flow towards covering the operating cost of the Tokyo FinTech Association, and research for the Japan FinTech Observer.