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Old June 4th, 2007, 08:04 AM   #1
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Japan Aims to Reinvigorate Tokyo as Global Finance Hub

Japan aims to reinvigorate Tokyo as global finance hub

TOKYO, May 27, 2007 (AFP) - Faced with growing competition from Hong Kong and Singapore, Japan aims to reinvigorate Tokyo as a global financial hub with a lofty goal of developing a new foreigner-friendly high-rise banking district.

The idea has raised eyebrows among foreign fund managers in the region whose biggest complaint about Tokyo is often not the lack of a decent office or apartment but high taxes and strict regulations.

Yuji Yamamoto, the minister for financial services, recently unveiled a plan for Tokyo's own version of London's Canary Wharf, a gleaming skyscraper banking district in once-derelict British docklands.

High-rise offices with 24-hour access and onsite health clubs would be developed along with housing complexes to encourage foreign banks to cluster in the area in the capital around the Tokyo Stock Exchange and Bank of Japan.

But Yamamoto did not say whether Japan would tackle high taxes and red tape, the most common complaints about Tokyo from fund managers, many of whom opt to work in Singapore or Hong Kong instead even if they manage Japanese stocks.

"Building buildings doesn't create a financial system," said one fund manager based in Singapore who asked not to be named because it could be bad for business.

"Japan has an unfavourable tax regime both for financial products and the individual. The overall operating environment in Japan is unfavourable because there is a deep suspicion of capitalism," he added.

Japan's government, concerned Tokyo has been losing business to rival financial centres such as Hong Kong and Singapore, has set up two expert committees to look at ways to boost financial competitiveness.

"Market share losses to London, Hong Kong, and Singapore have created a sense of crisis," Robert Feldman, a managing director and economist at Morgan Stanley, wrote in a report in February.

He said foreign managers in Tokyo often bemoan the lack of sufficient staff who are fluent in English.

Other frequent complaints include the length of time it takes to travel from Tokyo's Narita airport to the city centre and the firewall in Japan that means corporate and investment banking operations must be separated.

"There are still many many regulations which are a big problem," said Martin Schulz, a research fellow at the Fujitsu Research Institute.

He said firms were increasingly looking to integrate their banking and brokerage business which is not yet possible in Japan.

"This is where the money is and it's a problem for many of these banks," he said.

Britain's "Big Bang" overhaul of its financial regulations two decades ago and its pool of English-speaking workers helped to make London Europe's top financial centre ahead of Germany's Frankfurt.

The head of the Tokyo Stock Exchange, Taizo Nishimuro, also warned that the plan for a new district for foreign banks, while welcome, will not be enough on its own to boost Japan's financial competitiveness.

"We cannot wait until the time when those high-rise buildings are to be built before the Tokyo financial market gets bigger and greater," he told reporters recently, noting such "hindrances" as regulations and high taxation.

But experts say major foreign banks look set to stay in Tokyo, hoping to benefit from a pick-up in demand for stocks from Japanese individuals and investment banking opportunities in partnership with local players.

US giant Citigroup last month secured a takeover offer of the scandal-hit Japanese securities firm Nikko Cordial for 7.7 billion dollars as hostility to takeovers by foreign companies gradually abates.

And with the Japanese economy recovering from its long slump, Tokyo looks set to remain "a very big market which cannot be ignored by the bigger players," said Schulz.
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Old June 4th, 2007, 08:49 AM   #2
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wonderful news
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Old June 4th, 2007, 01:59 PM   #3
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This would indeed be a perfect time to revive Nihonbashi and Kabutocyo areas

So I support these tax incentives for creating new business districts in Japan.
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Old June 4th, 2007, 04:56 PM   #4
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I like to think Asia is big enough for Tokyo, HK and Singapore to all be major financial centers. And Tokyo is, without a doubt, a happening place. But I agree that buildings alone don't make a financial center and the Tokyo/Japanese govt still needs to create extra incentives to draw the crowd. Now, a 'special zone' within Tokyo -- with a unique tax and regulatory environment -- would be an interesting place indeed.
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Old June 4th, 2007, 05:39 PM   #5
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I don't want those foreign financial companies to come to Japan..
They are like hyaena, they just exploit Japanese society
and I believe the loss generated by them is far bigger than the benefits they bring to Japanese society.
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Old June 5th, 2007, 04:07 AM   #6
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Tokyo is already an international financial centre, albeit a domestic one. Japan is a huge market on its own.
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Old June 5th, 2007, 05:16 PM   #7
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Quote:
Originally Posted by Fox-Tale View Post
I don't want those foreign financial companies to come to Japan..
They are like hyaena, they just exploit Japanese society
and I believe the loss generated by them is far bigger than the benefits they bring to Japanese society.
too late, dude, they have all been here for years already.
exactly how do they exploit japanese society?
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Old June 7th, 2007, 03:18 AM   #8
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Quote:
Originally Posted by hkskyline View Post
Tokyo is already an international financial centre, albeit a domestic one. Japan is a huge market on its own.
A "Domestic international finance centre," eh?
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Old June 7th, 2007, 05:18 AM   #9
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Originally Posted by superchan7 View Post
A "Domestic international finance centre," eh?
Money flows in and out to international markets, but to service primarily Japanese domestic companies rather than multinationals.
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Old June 8th, 2007, 02:54 AM   #10
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"there is a deep suspicion of capitalism"

really? I didnt know that
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Old June 13th, 2007, 08:54 AM   #11
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@ [anyone]

How much further can Tokyo's finnacial markets be exploited by Foreign-financial firms? They're already here in Tokyo! Furthermore, the Japanerse financial market is already extremely mature.
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Old June 27th, 2007, 11:01 AM   #12
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Fidelity moves Japanese equity trading to Hong Kong

TOKYO, May 29 (Reuters) - U.S. asset management company Fidelity plans to shift its Japanese equities trading desk to Hong Kong from Tokyo in a move that may be the latest sign of Japan's diminishing importance in Asian finance.

Fidelity said on Tuesday it will send seven of its traders to Hong Kong, integrating them with a larger, cross-market trading desk there. The company's 21 Japan fund managers will remain in Tokyo.

A spokeswoman for Fidelity, which in Tokyo has a staff of about 450 and manages about $47 billion in assets, said the firm was not pulling away from the world's second-largest economy.

"We purely made this decision from an operational efficiency standpoint, and it has no impact on the way we do business in Japan," said Tomoko Aikawa, the company's director of corporate communications in Tokyo. "It's not going to change our commitment (to Japan)."

But that may be little consolation for Yuji Yamamoto, Japan's financial services minister.

Last week, Yamamoto admitted what many financial players have said for some time: Tokyo risks becoming Asia's financial backwater.

"Japan's internationalisation efforts have lagged," Yamamoto said in a speech to the American Chamber of Commerce in Japan.

Despite its economic strength, Japan accounts for only 5 percent of financial industry profits worldwide.

In 1990, Tokyo's stock market capitalisation made up 30 percent of the global total. By 2006, the contribution had fallen to below 10 percent.

The merger and acquisition market here is just a 12th of the size of the U.S. M&A market, and currency trading amounts to about half of the U.S. market total, according to the Nikkei business daily.

EXODUS FROM TOKYO

High taxes and finicky regulators have been blamed for driving foreigners to smaller but more cosmopolitan centres such as Singapore and Hong Kong.

"The Asia FX market was focused all around Tokyo. In the last two years, we've seen an exodus, literally an exodus, from Tokyo towards Singapore and Hong Kong, with Singapore leading the way," said a currency broker in Hong Kong.

With the rise of those centres, Tokyo is increasingly seen as a national financial hub, not an international one, said Nick Frank, director of Strategem Global Recruitment in London.

"Even though my background is Tokyo and my original recruitment network has always been in Tokyo ... 70 to 80 percent of my business in now in Singapore and Hong Kong," said Frank, who specialises in placing bankers in Asia.

Yamamoto has acknowledged that countries with low corporate taxes such as Singapore have had an easier time luring foreign firms than has Japan.

However, he has so far given no hint that Japan would ease its tax rate for companies.

He has said Tokyo should launch its own version of London's Canary Wharf, a revitalised district now home to some of the world's largest financial firms.

More favourable zoning rules could help lure more financial firms to the Nihombashi area near the Bank of Japan, he said.
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Old June 27th, 2007, 11:37 AM   #13
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It`s never too late. I want to remind to everybody that behind Japan there is a strong economy and a lot of liquidity...try to ask to CITIgroup if they are not interested in Japan!!
The problem is: the japanese governemt plan will be successful??
I want to see the plan before judging
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Old August 11th, 2007, 07:09 AM   #14
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Boost for Tokyo bourse as Chinese firm soars on debut

TOKYO, Aug 8, 2007 (AFP) - Shares in the first mainland Chinese company to list on the Tokyo Stock Exchange's main section got off to a flying start Wednesday, boosting the bourse's hopes of attracting more foreign firms.

China Boqi Environment Solution Technology (Holding) Co. drew strong investor interest at its debut, ending the first day of trading at 258,000 yen, 61 percent higher than the initial offering price of 160,000 yen.

The TSE has been struggling to attract foreign firms, particularly after a string of technical problems, hindering its efforts to compete with overseas rivals seeking to become Asia's pre-eminent bourse.

Only 25 foreign companies are now listed on TSE, mostly from the United States and Europe, compared with a peak of 127 in 1991.

"As the Tokyo Stock Exchange is trying to boost its position as Asia's core bourse, we want to invite more Chinese companies," said TSE spokesman Toru Onoda.

China Boqi, which is officially registered in the Cayman Islands tax haven, engages in designing, building and installing environmental equipment, including desulphurisation devices used at coal-fired power plants.

"Environmental protection is a big task as the Chinese economy grows. The government is set to require stricter measures. It will be a big business opportunity for China Boqi," chief executive Bai Yunfeng told reporters.

The 32-year-old executive said the group also wanted to advance into carbon emissions trading, garbage disposal in urban areas and projects to convert sea water into fresh water.

The group, which has acquired environmental technology from top Japanese companies Chiyoda and Kawasaki Heavy Industries, is the first foreign company to list its shares only on the Tokyo bourse.

China Boqi chose Tokyo because of the group's ties with Japan as well as the Tokyo bourse's long history and large scale, Bai said.

"We are also opening a channel through which we will communicate and make technical exchanges with Japanese companies that have high technology," he said, adding the group had no plan to list elsewhere at the moment.

China Boqi raised some 800 million yuan (105.6 million dollars) from the share offering in Japan after paying commissions, according to chief finance officer Tien Chau.

As concerns about global warming grow, environment-related stocks are becoming increasingly popular among investors, noted Nikko Cordial Securities broker Hiroichi Nishi.

"Institutional investors and investment trusts are actively buying environmental shares for their portfolios," he said.

Bai noted the flotation came exactly one year ahead of the Beijing Olympics, saying the group wanted to help "hold a green Olympics."

In an effort to expand its global reach, the TSE has been stepping up global alliances, linking up with the New York, London and Singapore exchanges.

The TSE has had a difficult time of late. It suffered its worst-ever system crash in November 2005. The following January it closed early for the first time ever after a scandal at Internet firm Livedoor sparked a wave of selling.
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Old August 11th, 2007, 07:35 AM   #15
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just wondering, hkskyline: what's your personal view on Tokyo's plans to re-establish itself as Asia's financial hub? can it succeed, or is there just too much competition from more internationalized centers like HK and Singapore? Does the Japanese govt actually do anything to make it more attractive to foreign companies?
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Old August 11th, 2007, 07:52 AM   #16
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Japan itself is a huge market, so Tokyo being a domestic financial centre alone is enough to put it ahead of Hong Kong and Singapore. However, a financial centre ought to be strong both domestically and internationally. The infrastructure is there for Tokyo to succeed except English language skills. If English levels are far better to cater to the international crowd, then Hong Kong and Singapore would be on the run, not the other way around. From a logistics point of view, I'd rather have the largest market in Asia cover the whole continent if I can. On the other hand, Asia is really divided from a cultural standpoint, so having several large financial centres in the region is much more feasible than say, in the US.

I don't think Tokyo can succeed beyond a huge domestic financial centre unless English levels improve. But even then, it won't be the ultimate Asian financial centre. China won't let that happen, while SE Asia is probably too far away. The region would be split between a few cities.
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Old August 12th, 2007, 10:51 AM   #17
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So the key driver is for more Japanese people to learn the English language?

Thanks for the heads-up info.
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Old August 12th, 2007, 01:12 PM   #18
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As much as I love Japan and think Tokyo is a wonderful place it is only a global city because of its economic importance. Tokyo has completely missed the boat in my opinion, if the Japanese could have used some of the excitement surrounding the economy in the 1980s to attract more foreign workers (and not just english teachers!) then perhaps this momentum could have carried on well into the 90s and set the city firmly on a path to internationalisation.

Now Tokyo's rivals aren't just London and New York, they are Hong Kong, Singapore, a resurgent Shanghai and Dubai whose sheiks seem to have an unlimited amount of cash and ambition.

I used to live in Osaka and worked in Tokyo for a few months whilst I was in Japan. What really hit me when I worked in Japan were how few foreigners there were.

The biggest employer of foreigners in Japan apart from the US Navy is NOVA Group, who employ around 7000 teachers, most of which are concentrated in Kansai and Kanto.

Even in areas such as Nihombashi in Tokyo or Umeda you could go around walking for hours without seeing even one westerner. Kobe deserves a mention too but is overwhelmingly Japanese. It was still a case of 'spot the lost foreigner'.

I always enjoyed the fact that Japan was so isolated however because it felt more special and unique living, working and travelling around the country.

But to go back to the original topic. Hong Kong, Singapore and say Bangkok all feel international, they first two have histories to link them with Britain and its former Empire which gives them a different feel. Being a foreigner in Hong Kong or Singapore feels more natural, being a gaijin in Japan is a totally different feeling, exclusive rather than inclusive, and outsider rather than an insider.

I was researching on the internet the other day and according to Tokyo Metropolitan government there are around 7800 British people living in the city. In London there are more than 20,000 Japanese, a lot of them students. There are 18,000 Americans in Tokyo and 45,000 in London as of 2001.

I walked through the campuses of Tokyo and Waseda universities back in 2006 and hardly saw any foreign students. This wasn't suprising though, I had become used to not seeing many tourists/foreign residents in my 2 years in Japan.

In London where I studied at UCL, Kings and LSE there are thousands of foreign students. 25% of UCL's undergraduate intake is from outside the UK and the figure is nearly 70% from the LSE. It feels cosmopolitan and international in London, anyone can feel at home here. In Tokyo though the ex-pat community is largely comprised of English teachers (transient), embassy staff and financial workers (also transient to an extent). The only parts of the city that feel remotely international are Roppongi (perhaps not the best advert!) and Higashi-Shinjuku.

Tokyo's problem is largely Japan's problem however. The country hasn't really fully opened up to the rest of the world yet and, to be honest, the people who I talked to despite being impeccably polite and welcoming, harboured an attitude towards foreigners as a cross between an exotic homonoid species and mistrust. This is something that will have to change in my opinion as well as the regulations if Tokyo is to rival Hong Kong and Singapore. This will take a generational shift rather than a few slick domestic advertising campaigns though.

At the moment I do love Japan as it is though, a homogenous bunch of polite, decent and hard working people. That is something that makes it special and unique in today's world. But it is also something that is still holding this great country back.

Last edited by dom; August 12th, 2007 at 01:23 PM.
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Old August 15th, 2007, 05:44 PM   #19
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Even in areas such as Nihombashi in Tokyo you could go around walking for hours without seeing even one westerner.
I would stay away from that area, and never touch it.
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Old August 15th, 2007, 06:18 PM   #20
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Quote:
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Even in areas such as Nihombashi in Tokyo or Umeda you could go around walking for hours without seeing even one westerner.
Exaggerated in my opinion. For instance, most times I ride the Yamanote line I come across with other westerns in the wagon.
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