Tokyo moves down one spot to #20 among Global Financial Centers

The 36th edition of Z/Yen’s Global Financial Centres Index (GFCI) has been published, and Tokyo gave up the rank it had gained six months ago, settling back just inside the Top 20. The point differentials among the Top 20 remain quite small, although the delta to fifth-place San Francisco has increased from 15 to 23 points.

The GFCI is the longest study of this kind, being published semi-annually and hence having 18 years of publication under its belt. The methodology combines 145 quantitative measures provided by third parties including the World Bank, The Economist Intelligence Unit, the OECD, and the UN, with 37,830 assessments of financial centers provided by 6,188 respondents to the GFCI online questionnaire.

From an all-time high third position in March 2020, Tokyo’s fall has been quite dramatic, via 4th place in September 2020 and 7th in March 2021, to ninth place in September 2021 and March 2022. Dropping out of the Top 10 in September 2022, and out of the Top 20 in March 2023, with a slight recovery over the past 12 months.

This also puts Tokyo into the eighth regional spot behind Hong Kong (#3, one spot up), Singapore (#4, one spot down), Shanghai (#8, two spots down), Shenzhen (#9, two spots up), Seoul (#11, one spot down), and Beijing (#18, three spots down). The only new entry into the Top 20 is Dublin at #14. Also, Osaka at #44 has gained three spots after falling in the previous two surveys.

Additionally, the GFCI assessment also asks respondents which centers they consider will become more significant over the next two to three years, with Seoul, Dubai, Singapore, London and Hong Kong leading the pack, while there is no mention of Tokyo among the fifteen highest ranked cities.

Among the five areas of competitiveness (Business Environment, Human Capital, Infrastructure, Financial Sector Development, Reputational & General), Tokyo regained its ranking for Human Capital (#10), and retained it for Reputational & General (#9, five spots up).

Similarly, across the eight industry sector sub-indices (Banking, Investment Management, Insurance, Professional Services, Government & Regulatory, Finance, FinTech, Trading), Tokyo nabs five Top Fifteen rankings, for Investment Management (#12), Insurance (#11), Government & Regulatory (#13), Finance (#11), and Trading (#14), three more than only a year ago, indicating an upward trajectory.

The methodology-driven ranking of the GFCI is augmented with financial center profiling that uses clustering and correlation analysis to identify three measures that determine a financial center’s profile along different dimensions of competitiveness (Connectivity, Diversity, Specialty).

The 10 Global Leaders surfaced by this profiling have both broad and deep financial services activities and are connected with many other financial centers. This list includes Tokyo, thus allowing us to keep propagating the “Global Financial City Tokyo” nomer with some honor.

Lastly, alongside the main GFCI index, Z/Yen also analyzes financial centres in terms of their FinTech offering. Here, Tokyo arrested its fall from 15th in September 2022 to 37th in September 2023 by moving up one spot despite losing seven points in the rating.

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