With trillions at stake, Japan is streamlining rules and selling its stability—yet the race comes down to whether fund managers and compliance talent will actually move.

For the first time in a generation, Tokyo has a realistic shot at reclaiming influence in global finance. A decade of corporate governance reform, a boom in retail investing through the permanent expansion of tax-advantaged NISA accounts, and the Bank of Japan’s gradual exit from ultra-loose policy have combined to change the story investors tell themselves about Japan. What’s missing is people: enough portfolio managers, traders, risk and compliance officers to manage the trillions flowing through the system, and to convince global asset owners that Japan is a scalable place to put money to work.

The opportunity set is immense. Japanese households held roughly ¥2,230 trillion in financial assets as of December 2024—one of the largest pools of private savings on earth. A growing share is inching toward risk assets as inflation returns and the revamped NISA program channels long-term savings into funds and equities. Tokyo’s policy makers have seized on that shift. The Financial Services Agency (FSA) now runs an English-language Financial Market Entry Office that handles everything from pre-application consultations to post-registration supervision for new asset managers. The Tokyo Metropolitan Government (TMG), working through FinCity.Tokyo, has layered on concierge services, relocation support and an “emerging managers” program designed to match fresh managers with domestic asset owners.

Regulators are also tackling structural legacies that once put foreign investors off. The Tokyo Stock Exchange (TSE) has pushed listed companies—especially those trading below book value—to articulate strategies that reflect the cost of capital and to unwind moribund cross-shareholdings. Corporate payout ratios have risen; dividend income to households is on track for another record. Meanwhile, the Bank of Japan (BOJ) has begun the final leg of unwinding its extraordinary stimulus, signaling eventual sales of its ETF holdings and a path toward policy normalization after years of negative or near-zero rates. For global allocators, that reduces policy uncertainty and the sense that Japan is an outlier.

The city’s pitch isn’t just reformist. It leverages advantages competitors can’t easily copy. Tokyo’s legal predictability, deep capital markets and world-class infrastructure are matched by a stable social environment that many executives find attractive after years of volatility in rival centers. Housing is comparatively affordable for a megacity; public education and healthcare are strong; commutes, while crowded, are reliable. For family offices and long-term institutions, the idea of placing more people on the ground in Tokyo is no longer far-fetched.

Yet the outcome hinges on talent. In 2025, recruiters in Tokyo describe a chronic shortage of mid- to senior-level investment professionals and compliance specialists. The gap is most acute in control functions—AML, market surveillance, operational risk—where local experience and English fluency must meet global standards. That scarcity is driving up pay offers and lengthening search cycles. One long-time compliance veteran put it bluntly: demand has finally caught up with the reforms.

For international managers comparing Asia hubs, the alternatives are clear. Singapore offers ease of business in English and a dense ecosystem of service providers. Hong Kong remains a powerhouse for Greater China deal flow. Tokyo’s differentiator is access: proximity to some of the world’s most cash-rich institutions and a domestic investor base being nudged—by policy, demography and macroeconomics—toward productive risk. The question for CEOs in New York, London and Zurich is whether they can hire the people required to capture that access without sacrificing speed or compliance quality.

Policy makers know the bottleneck and are trying to ease it. At the national level, the FSA’s Market Entry Office provides all-English registration and supervision—a rarity in Japan just a few years ago. Tokyo’s government has launched and expanded programs to subsidize relocation, support temporary stays for asset management teams testing the market, and even created special zones for financial and asset-management businesses. The city’s Startup Visa program, updated in 2025, gives foreign entrepreneurs a foothold to establish operations while sorting out longer-term status.

On the market side, corporate Japan’s behavior is changing in ways that matter to talent. Boards are more independent; return on equity is improving from a low base; and large companies are increasingly tying executive pay to performance. That, in turn, is producing more work for analysts, stewardship specialists and engagement-focused fund managers. If the BOJ moves again this autumn, as many economists expect, a less distorted yield curve could restore the economics of active bond management and structured products desks—roles that drifted away during the yield-curve-control era.

But obstacles remain. Tokyo’s regulatory process—though greatly improved—still demands detailed documentation and often favors in-person interactions. English is not yet universal across all touchpoints of the ecosystem; providers in areas like fund administration, compliance outsourcing and trustee services are thinner on the ground than in Singapore. Tax, too, is a double-edged sword. While 2025 reforms adjusted deductions and Japan’s non-permanent resident rules continue to exempt certain offshore income unless remitted, the introduction of a special 4% corporate “defense tax” has complicated cost models for some firms.

Culture is the subtler challenge. Tokyo’s work style remains consensus-heavy, which can slow decision-making for fast-moving managers. Remote and hybrid expectations that became standard in the West are less embedded here. For asset managers used to plug-and-play set-ups, that means investing more in localization and hiring bilingual operators who can translate not only language but practice.

So can Tokyo attract the people it needs? The near-term answer depends on three levers. First, visa and immigration throughput must match the ambition. A dedicated fast track for experienced finance professionals—compliance heads, portfolio managers, risk officers—would pay outsize dividends. Second, build the vendor bench: administrators, compliance boutiques, technology integrators and trustees with true scale and English-first service. Third, keep rewarding good corporate behavior with index inclusion, capital access and public recognition—so that investment talent sees Tokyo not as a governance project, but as a performance market.

For global firms deciding whether to expand, a pragmatic playbook is emerging. Start with a lean trading and research pod, registered via the Market Entry Office, and co-locate with a Prime Market broker who can provide balance-sheet and operations support. Hire compliance and risk leads early; the candidate pool is tight and the brand message matters. Partner with local asset owners through programs like the Emerging Managers initiative to seed products that align with Japan’s priorities—income, governance-driven value creation and the green transition. Build optionality for a larger build-out if performance and client demand validate the thesis.

The milestones to watch over the next 12 months are concrete. BOJ guidance on the pace and mechanics of ETF disposals will signal how confident the central bank is in market resilience. TSE’s follow-up on cost-of-capital disclosure and cross-shareholding reduction will show whether governance reform is sticky or stalling. NISA inflows, account growth and domestic fund launches will indicate whether retail risk appetite is becoming a habit. If those data keep moving in the right direction—and if recruiters can fill seats—Tokyo could emerge not as Asia’s loudest hub, but its most durable.

In the 1980s, Tokyo tried to win with sheer scale. In the 2000s, it ceded ground during deflation. In the 2020s, its best chance in decades rests on a quieter proposition: stability plus reform, amplified by people. The capital is ready. The question is whether the talent arrives in time.