Weekly

Japan FinTech Observer #187

Welcome to the one hundred eighty-seventh edition of the Japan FinTech Observer.

The Reserve Bank of New Zealand, the Bank of Canada, and the Federal Reserve Board will make policy rate decisions on Wednesday this week, followed by the European Central Bank on Thursday, and the Bank of Japan (日本銀行) on Friday. Since the Nikkei has already told us that the BOJ will stand pat, and the markets are currently priced for a December move, it should be relatively quiet. Among the above, only the RBNZ might act.

Daiwa Securities and Mizuho have been notified by the Chinese regulator that they can move ahead with their broker/dealer businesses. We have taken the opportunity to take a comprehensive look at Japanese financial institutions with a presence on the Mainland.

Otherwise, here is what we are going to cover this week:

Venture Capital & Private Markets: Tokyo selects Daiwa Corporate Investment for JPY 5bn crossover fund to combat premature IPOs
Insurance: Sompo launches dedicated Sharia insurance unit in Indonesia as sector assets expand; CyberCube adds Sompo Japan Insurance to growing list of Asian clients; Daiichi Life pressured to sweeten AUD 7.8bn Challenger bid after board declines initial offer; Daiichi Life diversifies into gold as Japanese insurer hedges against market risks and inflation
Banking: Fukuoka Financial Group partners with IBM Japan to accelerate AI-first banking overhaul; Money Forward Home has been selected as the launch partner for Meta's personal AI agent "Muse" in Japan
Payments: SMBC and Ant International ink deal to expand cross-border payments across Asia
Capital Markets: Long-Term Capital Market Assumptions - Japan shakes off deflation as capex revival, corporate reforms, and a cheap yen power long-term asset returns; Bullish on China - Institutional licensing of Japanese financial groups in Mainland China; Natixis CIB to acquire Japan advisory boutique Sangyo Sosei in M&A push
Asset Management: JPX Group’s initiatives promoting Japan as a “Leading Asset Management Center”
Digital Assets: The first FY2026 study group on "How to Respond to Digital and Decentralized Finance"
The Last Word: Dr. Slok's Japan Weeks Preview

Venture Capital & Private Markets

Tokyo selects Daiwa Corporate Investment for JPY 5bn crossover fund to combat premature IPOs: The Tokyo Metropolitan Government (TMG) has selected Daiwa Corporate Investment as the candidate manager for its newly established "TOKYO Crossover Fund," an initiative aimed at providing continuous capital to high-growth enterprises from pre-IPO through post-listing stages; under the scheme, TMG plans to commit ¥5 billion to the fund within the current fiscal year following final contractual negotiations, alongside capital from private-sector investors; Daiwa Corporate Investment, a wholly owned venture capital subsidiary of Daiwa Securities Group, will both manage and co-invest in the vehicle, which will primarily target equities of unlisted growth companies

Insurance

Sompo launches dedicated Sharia insurance unit in Indonesia as sector assets expand: Sompo Indonesia has commenced operations for PT Sompo Insurance Sharia ("Sompo Syariah"), establishing a standalone general Sharia insurer in compliance with Indonesia's Financial Services Authority (OJK) regulations; the new entity formalizes and scales the group's Islamic finance activities in the country, where Sompo Indonesia has offered Sharia-compliant asset protection products since 2017; company executives noted that transitioning to a dedicated legal entity will allow for tighter governance, specialized underwriting, and expanded product offerings tailored to local market demand
CyberCube adds Sompo Japan Insurance to growing list of Asian clients: Sompo Japan Insurance has spent the past several years building its cyber capabilities, developing a tailored cyber offering for its core Japanese market; to support this continued growth, Sompo Japan Insurance has selected Account Manager (AM), CyberCube's single-risk cyber underwriting solution, along with CyberCube's Portfolio Manager (PM) suite, which includes Single Points of Failure (SPoF) intelligence and the Attritional Loss Model (ALM); together, these tools will give Sompo Japan Insurance's cyber underwriting team a fuller, more data-driven view of risk, from individual account selection through to portfolio-wide accumulation and attritional loss
Daiichi Life pressured to sweeten AUD 7.8bn Challenger bid after board declines initial offer: Daiichi Life Group is facing pressure to raise its takeover bid for Challenger after the Australian annuities specialist declined an initial AU$11.80-per-share approach today, October 26; the Tokyo-based insurer first lobbed its non-binding proposal a week earlier on October 19 through its wholly owned subsidiary, TAL Daiichi Life Australia; the offer sought to purchase the remaining 79.5% stake in Challenger for roughly AU$6.3 billion (US$4.4 billion), valuing the Sydney-listed firm at approximately AU$7.8 billion to AU$7.9 billion ($5.5 billion) and offering a 20% premium over its prior closing price
Daiichi Life diversifies into gold as Japanese insurer hedges against market risks and inflation: Daiichi Life Insurance has begun investing in gold as part of a broader diversification strategy beyond traditional stocks and bonds; the major insurer is targeting gold to comprise approximately 1% of its assets under management, which totaled $219.3 billion as of the end of June; this move reflects Daiichi Life's effort to hedge against rising inflation and other market risks in the current economic environment; the company is expanding its alternative investment strategy to include precious metals alongside its existing property and private debt holdings, signaling a shift toward more defensive positioning as market uncertainties persist

Banking

Fukuoka Financial Group partners with IBM Japan to accelerate AI-first banking overhaul: Fukuoka Financial Group (FFG) has signed an AI partnership agreement with IBM Japan to accelerate a group-wide, “AI-first” operational and organizational overhaul; the agreement broadens a strategic digital collaboration established between the regional financial group and IBM Japan in November 2022; under the expanded framework, FFG aims to redesign its front-to-back banking operations to integrate autonomous AI agents, strengthen governance, and modernize legacy IT infrastructure
Money Forward Home has been selected as the launch partner for Meta's personal AI agent "Muse" in Japan: Money Forward has utilized AI technology to go beyond simply making money visible, and has strived to provide a financial experience that allows each individual to make informed decisions about their next course of action; going forward, through its collaboration with Muse, Money Forward ME's household and asset data will be used in conversations with Muse, enabling users to organize their financial questions and understand their household and asset situations

Payments

SMBC and Ant International ink deal to expand cross-border payments across Asia: Sumitomo Mitsui Banking Corporation (SMBC) has signed a memorandum of understanding with Ant International to collaborate on cross-border payments and drive regional business expansion, targeting trade flows connected to Japan, Singapore, and Southeast Asia; under the agreement, the core banking unit of Sumitomo Mitsui Financial Group will leverage its domestic and international transaction banking networks to support financial functions across Ant International’s core service portfolio; this includes providing banking capabilities for cross-border mobile payment gateway Alipay+, merchant acquiring solution Antom, and global business account platform WorldFirst

Capital Markets

Long-Term Capital Market Assumptions - Japan shakes off deflation as capex revival, corporate reforms, and a cheap yen power long-term asset returns: Japan is decisively closing the chapter on decades of structural deflation, positioning its economy and capital markets for higher nominal expansion, rising bond yields, and attractive equity returns over the next 10 to 15 years, according to J.P. Morgan Asset Management’s "2027 Long-Term Capital Market Assumptions" (LTCMA); driven by rising corporate investment, intensifying governance pressure on undervalued companies, and the imperative to automate a shrinking workforce, Japan is emerging as a primary beneficiary of global capital rewiring and a standout diversifier for institutional portfolios
Bullish on China - Institutional licensing of Japanese financial groups in Mainland China: In mid-October 2026, Chinese financial authorities notified Daiwa Securities Group and Mizuho Financial Group that they had passed final operational readiness reviews, system audits, and on-site supervisory inspections, granting both groups full regulatory authorization to conduct wholly owned securities operations in mainland China; these approvals conclude protracted licensing processes and reflect Beijing’s pragmatic approach toward Japanese financial capital, even as key Western peer institutions experience prolonged regulatory delays; Mizuho Financial Group secured market access via an entirely greenfield route through its brokerage arm, Mizuho Securities; Mizuho submitted its initial application to establish a mainland securities subsidiary in November 2023, obtaining formal establishment approval from the China Securities Regulatory Commission (CSRC) in September 2025; incorporated in Beijing as Mizuho Securities (China), the subsidiary underwent comprehensive physical inspections, technological validations, and regulatory reviews before securing final sign-off to launch operations; Mizuho’s mainland securities platform is designed to operate in tandem with its commercial banking unit, concentrating on debt capital markets, fixed income distribution, and corporate underwriting to connect Chinese domestic entities and multinational corporations with Asian regional capital pools; Daiwa Securities Group executed an equity consolidation strategy to establish full ownership; in 2021, Daiwa was authorized to establish Daiwa Securities (China) under a 51% majority-controlled joint venture alongside Beijing State-Owned Capital Operation and Management Center and other domestic partners; in April 2026, Daiwa agreed to purchase the remaining 49% equity interest from its local partners through the Beijing Property Rights Exchange for approximately $100 million (RMB 706 million, or roughly ¥16 billion); the formal supervisory transfer approval in October 2026 completed the subsidiary’s conversion into a wholly foreign-owned enterprise (WFOE); this transition affords Daiwa unfettered operational control over strategic planning, client engagement, and enterprise risk management, bypassing the structural misalignments that frequently characterized minority-partner joint ventures
Natixis CIB to acquire Japan advisory boutique Sangyo Sosei in M&A push: Natixis Corporate & Investment Banking (Natixis CIB) has agreed to acquire Tokyo-based advisory firm Sangyo Sosei Advisory (SSA) to expand its investment banking, real assets, and mergers and acquisitions (M&A) operations in Japan, subject to regulatory approval from the Financial Services Agency; SSA's team will formally integrate into Natixis CIB's Japan operations on January 1, 2027; the transaction builds on the French lender's footprint in the country following the establishment of its Tokyo banking branch in July 2025

Asset Management

JPX Group’s initiatives promoting Japan as a “Leading Asset Management Center”: As the Japanese government accelerates its policy initiative to establish Japan as a "Leading Asset Management Center," the structural transformation of the nation's capital markets has shifted from regulatory ambition to market execution; serving as the primary operational engine of this national strategy, Japan Exchange Group (JPX) is implementing a multi-pronged market reform designed to generate a "virtuous cycle"; this economic framework aims to establish direct, reinforcing feedback loops connecting transparent capital markets, corporate value creation, and household asset growth; JPX Group confirmed its strategic roadmap detailing market infrastructure enhancements, corporate governance nudges, and retail engagement mechanisms; the strategy is built around three core operational pillars designed to strengthen systemic integrity, mobilize growth capital, and lower friction for domestic investors

Digital Assets

The first FY2026 study group on "How to Respond to Digital and Decentralized Finance": Global financial capital markets are seeing distributed ledger technology (DLT) transition from speculative crypto asset trading toward institutional real-world asset (RWA) tokenization; this technological migration has established a distinct competitive divide in global financial centers: key institutional venues in the United States have moved aggressively into live commercial execution across programmable payment and asset rails, whereas major Asian hubs—most notably Japan—remain predominantly in the demonstration and proof-of-concept (PoC) phase; as cash instruments, sovereign debt, equities, and institutional investment funds migrate to distributed ledgers, capital market velocity and liquidity standards are being redefined on a global scale

The Last Word: Dr. Slok's Japan Weeks Preview

Apollo Global Management's Chief Economist, Torsten Slok, provided his take on Japan Weeks with the Sunday edition of "The Daily Spark".

"Japan Weeks, now in its fourth year, brings global investors and asset managers together to explore the opportunities in Japan’s financial and capital markets. One of the most important themes behind that opportunity is shareholder activism, which is reshaping corporate Japan. Shareholder proposals have more than tripled since 2018, reflecting a stronger focus on governance and shareholder value, see first chart below. This is starting to translate into stronger corporate profits, with profits at Japan’s medium-sized businesses (those with capital of JPY 100 million to 1 billion) reaching historically high levels, a sign that improving profitability extends well beyond the country’s largest companies, see second and third charts."

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