Japan FinTech Observer #122

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

We have implemented our own, very personal "Don't buy American" policy, which might seem ironic, given that you are most likely to read this newsletter on LinkedIn, but we do offer a self-hosted version that guarantees delivery to your inbox (which LinkedIn does not) and allows you to subscribe to individual articles as they are published.

Outside of digital services, it is actually a pretty simple policy to follow. Who would want to buy crappy US cars anyway, or tasteless plastic tomatoes? The fact that our American friends now get taxed higher to acquire quality products makes us sad, but there is the "Rest of the West", still staunch defenders of a liberal, market-oriented democracy: the EU, Japan, Korea, Taiwan, Australia & New Zealand - we can do it! I actually do not know how to assess the UK right now, with its historical "special relationship" to the US, but their early "trade deal" does not look too different to me from what has gone down last week.

In light of all this, plus the potential domestic political instability, this week's Monetary Policy Meeting will not result in a Bank of Japan policy rate change.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: SMBC Group has announced the establishment of the USD 300m "SMBC Fin Atlas Beyond Fund" in collaboration with Fin Capital; Nikko Asset Management leads, Saison Capital participates in Chocolate Finance's Series A+; MS&AD Ventures participates in Credibur's USD 2.2m Pre-Seed Round; LegalOn Closes $50 Million Series E Led by Goldman Sachs; AI×Compliance Tech NaLaLys raises JPY 250m in Pre-Series A Round
• Insurance: S&P Global Ratings' webinar on Japanese insurance sector trends; American Honda Motor establishes insurance agency
• Banking: MUFG hosted its investor day and also established a Sustainable Finance Framework jointly with the Japan International Cooperation Agency (JICA); "BaaS by GMO Aozora" for 01 Bank
• Payments: Visa Worldwide Japan, SAP Japan, Sumitomo Mitsui Card, and Digital Garage have launched an embedded finance solution for B2B payments; Kyodai Remittance acquired by Ria Money Transfer in push for Asia expansion; Rakuten obtains patent for simplifying P2P e-money transfers
• Capital Markets: Cboe Global Markets plans to cease Japanese Equities Operations; BridgeWise launches AI-driven stock analysis with Rakuten Securities; five ex-SMBC Nikko officials convicted in market manipulation case
• Asset Management: Japan's first individual sales of Trust Beneficiary Rights backed by Movable Property Trust
• Digital Assets: AltX Research announced that KDDI Corporation has joined as a Vision Partner for its keystone project, “Japan Smart Chain” (JSC); Mitsubishi UFJ Trust and Banking made headlines by acquiring a high rise in Osaka for more than JPY 100 billion (USD 681 million)
• The Last Word: The Illusion of a Trade Deal

Venture Capital & Private Markets

• SMBC Group has announced the establishment of the USD 300m "SMBC Fin Atlas Beyond Fund" in collaboration with Fin Capital, marking the commencement of corporate venture capital activities to invest in U.S financial technology startups
• Nikko Asset Management leads, Saison Capital participates in Chocolate Finance's Series A+: Celebrating its one-year anniversary, Singapore-headquartered Chocolate Finance announced two significant milestones: the successful close of a USD 15 million Series A+ funding round as well as attaining regulatory approval to operate in Hong Kong; the funding round was led by Nikko Asset Management, with strong participation from returning investors Peak XV, Prosus, Saison Capital, as well as founder Walter de Oude
• MS&AD Ventures participates in Credibur's USD 2.2m Pre-Seed Round: Berlin-based FinTech Credibur has secured USD 2.2 million (EUR 1.85 million) in pre-seed funding to launch its credit infrastructure platform; the round is led by European FinTech VC Redstone, followed by Silicon Valley's MS&AD Ventures and Canadian VC Inovia; the new platform for debt facility management goes far beyond traditional reporting tools, orchestrating the full lifecycle of institutional funding: from structuring through reporting and contract management, to capital calls and the administration of special purpose vehicles (SPVs); the solution targets alternative lenders such as buy now, pay later providers, factoring and leasing companies, as well as institutional investors, including asset managers, debt funds, and family offices
• LegalOn Closes $50 Million Series E Led by Goldman Sachs: LegalOn Technologies, a Tokyo and San Francisco-based startup that uses AI to speed up contract reviews, announced a USD 50 million Series E, bringing its total funding to USD 200 million; the round was led by Growth Equity at Goldman Sachs Alternatives, with continued support from existing investor World Innovation Lab (WiL), and new participation from Mori Hamada, Mizuho Bank and Shoko Chukin; LegalOn’s last fundraising was in 2022, when it secured JPY 13.7 billion (USD 101 million at the time) in a Series D round led by SoftBank Vision Fund 2; other investors of the round include venture capital firm HongShan Capital (formerly Sequoia China) and Goldman Sachs
• AI×Compliance Tech NaLaLys raises JPY 250m in Pre-Series A Round: NaLaLys, which operates the SaaS platform "NaLaLys" for advancing and streamlining corporate compliance, has completed a fundraising of 250 million yen in a Pre-Series A round; in this round, Delight Ventures served as the lead investor, with DNX Ventures and WPower Fund (MPower) participating in a third-party allocation of new shares; this brings the total cumulative fundraising to 300 million yen

Insurance

• S&P Global - Japan Insurance Trends: S&P Global Ratings hosted a live webinar titled "Japan Insurance Sector Trend," providing an in-depth analysis of the current state and future outlook for Japan's life and non-life insurance industries; the core message of the webinar was one of cautious optimism, highlighting the sector's enhanced resilience; Japanese insurers are actively diversifying revenue sources, strengthening their asset-liability management (ALM), and reducing market risk by divesting strategic equity holdings; while the sector's creditworthiness is expected to remain stable, with most major insurers maintaining A+ ratings in line with Japan's sovereign rating, several key risks and strategic divergences are shaping the industry's future; these include managing unrealized losses on bond portfolios, navigating the implications of the new economic value-based solvency regime (J-ICS), and pursuing overseas growth through mergers and acquisitions
• American Honda Motor establishes insurance agency: American Honda Motor has launched a licensed insurance agency, Honda Insurance Solutions, for Acura and Honda customers; it has partnered with VIU by HUB, an omnichannel insurance brokerage, to offer quoting services and professional advice; Honda Insurance Solutions has nationwide reach, being licensed in all 50 US states as well as the District of Columbia; the agency is domiciled in Delaware, has its principal place of business in Irving, Texas, and is a wholly owned subsidiary of American Honda Finance Corporation

Banking

• MUFG hosted its investor day, with a special focus on its plan to mold its retail banking services and recent acquisitions (WealthNavi, eSmart Securities, Moneytree) into a holistic offering; core to the effort is the recently refreshed digital banking app, leading to a common ID across all services, a newly integrated loyalty program, and ultimately the launch of a new digital bank by the end of the next fiscal year
• MUFG Bank has established a Sustainable Finance Framework jointly with the Japan International Cooperation Agency (JICA); the framework defines the sustainable finance requirements for co-financing to be provided by MUFG Bank and its partner banks Krungsri (Thailand), PT Bank Danamon Indonesia, Tbk. (Indonesia), VietinBank (Vietnam), Security Bank Corporation (the Philippines), and their consolidated subsidiaries with JICA; MUFG Bank and its partner banks, in collaboration with JICA, will utilize the framework to promote the origination of sustainable finance in developing countries
• "BaaS by GMO Aozora" for 01 Bank: GMO Aozora Net Bank is providing banking functions such as deposits, loans, and credit analysis in a BaaS format to contribute to the operation of a "data-driven banking system that aims to provide "security and safety," "flexibility," "low cost," and "high-quality UI/UX" by 01 Bank, a 100% subsidiary of Ikeda Senshu Holdings; 01Bank is a digital bank with no physical branches that targets businesses; using cloud services provided by Makuake and ZAICO as its gateway, 01Bank provides new financial services to businesses that utilize the wealth of transaction data available from cloud services, in addition to the deposit and withdrawal data from the financial institutions that businesses normally use, and supports the growth of its users

Payments

• The Bank of Japan has published an English translation of the second "Interim Report of Relevant Ministries and BOJ Liaison Meeting on CBDC"
• Visa Worldwide Japan, SAP Japan, Sumitomo Mitsui Card, and Digital Garage have launched an embedded finance solution for B2B payments developed through collaboration between Visa and SAP, marking the first deployment of this solution in Japan during fiscal year 2025 to improve B2B payment efficiency; Visa began collaborating with SAP in 2023 to streamline and simplify B2B payments, integrating payment solutions into SAP's ecosystem through the SAP Business Technology Platform (BTP) in the Asia-Pacific region and deploying embedded finance solutions for B2B payments; companies holding Visa cards can use this solution on SAP to make card-based payments to business partners even when those partners do not support card payments, through SAP BTP; when using credit cards, payments become deferred, allowing companies to secure necessary funds in a timely manner and eliminating working capital gaps in the supply chain
• Kyodai Remittance acquired by Ria Money Transfer in push for Asia expansion: Ria Money Transfer, a global leader in the cross-border money transfer industry and a business segment of NASDAQ-listed Euronet, has become the majority shareholder through the acquisition of 60% of the shares of Unidos, the operator of Kyodai Remittance, a Japan-based funds transfer business and overseas remittance specialist; leveraging Kyodai’s deep market insight, nuanced understanding of local customer needs and its distinction as the first remittance operator in Japan to be granted a Type 1 Funds Transfer Service Provider license—enabling the processing of high-value transactions exceeding JPY 1 million (approximately USD $6,800)—Ria is set to expand its footprint across the Asia Pacific region
• Rakuten obtains patent for simplifying P2P e-money transfers: Rakuten Group has obtained a patent for a system and method for simplifying person-to-person (P2P) e-money transfers, particularly when the recipient is not yet a registered user of the e-money service; traditionally, to send e-money to someone, the sender must first confirm that the recipient is also a registered user of the same e-money service; this creates friction and a burden on the sender, potentially discouraging the use of the service; the invention aims to reduce this burden by creating a seamless transfer process, regardless of the recipient's registration status

Capital Markets

• The 10-year JGB briefly crossed the 1.60% yield level after the announcement of a trade deal, but has retreated since; market conditions for long and super long JGBs remain extremely tight (read: no buyers)
• Cboe Global Markets plans to cease Japanese Equities Operations: Cboe Global Markets announced its decision to wind down its Japanese equities business, including the operations of its Cboe Japan proprietary trading system and Cboe BIDS Japan block trading platform; Cboe expects to suspend operations for these businesses on August 29, 2025 and formally close the businesses subject to consultation with regulators
• BridgeWise launches AI-driven stock analysis with Rakuten Securities: Following the announcement of their strategic partnership in November 2024, BridgeWise and Rakuten Securities have launched their advanced StockWise equity analysis solution; Rakuten Securities will provide its over 12 million customers with free access to cutting-edge investment insights for Japanese and U.S. equities, powered by BridgeWise’s proprietary AI platform; this collaboration marks a significant milestone in BridgeWise’s expansion across Asia, and particularly in Japan, where investor appetite for transparent, data-driven decision-making tools is surging
• Five ex-SMBC Nikko officials convicted in market manipulation case: the Tokyo District Court found five former senior officials of SMBC Nikko Securities guilty in a stock price manipulation case; according to the ruling, the five violated the financial instruments and exchange law between 2019 and 2021 by placing massive buy orders for 10 stocks before conducting so-called block offer transactions, in which brokerage firms buy shares from major shareholders to sell to investors outside the market
• The Ministry of Finance has published its "JGB Newsletter" for July 2025

Asset Management

• Japan's first individual sales of Trust Beneficiary Rights backed by Movable Property Trust: Mitsubishi UFJ Trust and Banking, ChariChari, Music Securities, and Impact Circle have formed the "ChariChari Regional Infrastructure Investment Fund," Japan's first social issue-based investment fund for individuals backed by a movable property trust, and will begin sales from July 2025
• The Financial Services Agency has published an updated "Guidebook for Registration of Investment Management Business and Other Financial Instruments Businesses"; in an easily understandable way, using flowcharts and illustrations, this guidebook explains the types of registration to be required for each of the major business schemes related to asset management business, while provides an overview of the procedure for registration screening and explanations on the requirements for registration

Digital Assets

• Coincheck Group announced that it will publish first quarter results on August 7, 2025
• AltX Research announced that KDDI Corporation has joined as a Vision Partner for its keystone project, “Japan Smart Chain” (JSC), a Japan-sovereign layer 1 blockchain; JSC is the foundational, Japan-sovereign blockchain platform, featuring full compatibility with Ethereum and validated entirely by domestic industry leaders; it is engineered as a “compliance-first” Layer 1, embedding blacklist enforcement and transaction prioritization - making it a trusted infrastructure for regulated digital-asset services with regulatory integrity but without sacrificing usability; also, the launch of the Japan Smart Chain testnet has been scheduled for August 8, 2025
• Mitsubishi UFJ Trust and Banking made headlines by acquiring a high rise in Osaka for more than JPY 100 billion (USD 681 million), with the intention to use it to create digital securities and sell tokenized real estate to both retail and institutional investors; while the magnitude of the deal is striking, the majority of the domestic tokenizations have indeed been focused on real estate, and secondary market activity remains almost non-existent

The Last Word: The Illusion of a Trade Deal

Does it count as a trade deal if it has been scribbled on the back of a napkin, or rather, as in this case, on a cardboard in huge letters readable by a 79 year old? What if the official pronouncement differs from the napkin? Or if one of the negotiating parties immediately gives a diverging interpretation of the napkin, such as Japan's top trade negotiator, Ryosei Akazawa, stating on Friday that he understands the US side seeking a 90-10 split of returns as a sign of its commitment to shouldering a large share of the contribution and risk?

Markets clearly took the news in strides, with the TOPIX adding about 3.5% over a few days before giving up about half of the gains again on Friday and Monday. Perceived certainty about a “good deal”, or at least the avoidance of a worst-case scenario catalized investors who seemed reluctant to push the Japanese indices back into record territory. However, among the enthusiasm it should not be lost that, and I quote Paul Krugman, “a 15 percent tariff is still really, really high — much higher than the 1.6 percent tariff Japanese non-agricultural exports faced before Trump began his trade war.”

With the US administration publishing a “Fact Sheet” on July 23, 2025, and the Japanese side a “Summary” on July 25, 2025, we have taken a closer look at those two documents. You can access the full Japan FinTech Note here.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. We invite you to also register for our short weekly digest, the “Japan FinTech Observer”, on LinkedIn, or here on the FinTech Observer website.

We also provide a regular short-form Japan FinTech Observer news podcast, available via its Podcast Page. Our global Finance & FinTech Podcast, “eXponential Finance” is available through its own LinkedIn newsletter, or via its Podcast Page.

Should you live in Tokyo, or just pass through, please also join our meetup. In any case, our YouTube channel and LinkedIn page are there for you as well.