FinCity.Tokyo Discussion and Jesper Koll: Guiding Japan's Financial Future

Tokyo's Place as a Financial Leader in a Changing World

The FinCity Global Forum 2025 was held on January 24 at the KABUTO ONE Hall & Conference, located in the neighborhood of Nihonbashi Kabutocho, known as Japan's Wall Street. The event featured a series of programs, panel discussions and pitch sessions looking at how Tokyo will evolve and keep its crown position in the ever-faster changing world of international finance. The opening declaration was delivered by Governor of Tokyo Koike Yuriko, and keynote dialogue, titled "Annual Outlook for 2025 International Financial and Economic Policies, and Tokyo's Role as a Financial Center," was moderated by Jesper Koll, and attended by FinCity.Tokyo Chairman Nakaso Hiroshi and Kanda Masato, a former Ministry of Finance official who is now President of the Asia Development Bank.

A native of Germany, Koll was educated in Europe and the United States before coming to Japan in 1986. He currently serves as an expert director of Monex Group and Japan Catalyst Fund, Japan's first corporate interest rate participation/activist fund based on retail investors. 
Koll has held several positions on the advisory boards of the Japanese government and business, including a member of the Advisory Panel for Global Financial City Tokyo, and he was appointed as a FinCity.Tokyo Ambassador.

Global Changes Bring Opportunity to Tokyo's Finance Sector

Koll opened the discussion noting that "the global economy is fragmented", meaning that there are more trade routes and capital flow than have traditionally been in place. "The past 30 years, give or take, have been marked by a dispersion—call it globalization—of trade growth and capital growth across the globe," he said in an interview after the panel discussion, where he dived into some details. "The world used to be easy, in that you used to have these nice, neat blocs like the G7, but now trade and capital is much more diffuse," he concluded. But the diffusion of trade has opened up a whole world of problems. And, as Koll sees it, a world of opportunities as well, and Japan appears to be particularly well positioned to leverage these new chances and changes in global trade.

What is the appeal of Japan? "It's very simple. It's two things," said Koll. "Number one, Japan has the cheapest assets, by any valuation metric.  Japan stands out because it is really, really cheap. Your entry price, therefore, is very low. Second, it's a very rich country.  It is rich in terms of financial assets, many of which are 'sleeping'," meaning the assets of Japan have incredible untapped potential.

Koll used the example of housing as an example of the affordability of Japan. "If you search for cheap houses in Japan, you get lots of returns. There is no way I can buy a house anywhere in Europe, anywhere in Asia, or anywhere in the USA, for the price I can buy a house here in Japan."

Coordination Between Government and the Financial Sector Yields Results

The fact that the Tokyo Metropolitan Government (TMG) is paying attention to the economics of the capital is great news to Koll. And, while there have been attempts before by the TMG and other governmental organizations to jumpstart the economy of a particular city or sector, this time is different because all parties are coming together to work for a common goal. The TMG is working in unison and acting as a leader among several other groups.    
     
In Koll's view, this cooperation was necessary. "You cannot point to one thing or one policy that they did that had such and such effect. There is nothing haphazard that happens here. You have the backbone, the buy-in and support from the central governments, the pension association and other entities, and the coordinated effort is unbelievable," he said. And the strength of decisions made in Japan hold much more than those made in other countries, where decision makers can change their mind. "It takes much longer here to make a decision than, say, in the US, but once the decision is made, Japan moves."

This is a significant change from the Japan that Koll saw when he landed in the country back in 1986. The years immediately leading up to 1986 were a time of major inflection points for the Japanese financial industry. The Yen-Dollar committee of 1984, followed by the Plaza Accord in 1985, set the yen loose on the markets. Meanwhile, in 1986, the first six foreign firms were allowed to become members of the Tokyo Stock Exchange. "Japan committed to a program of deregulation of all of its financial markets, from interest rates through to commodities, the stock market and so on."

So, what does the future hold? Koll would like Japan to have true national champions in three to four years' time, so that industrial reorganization through M&As will accelerate, and he is optomistic about Japan's place in global finance. "Japan will still be a high current account surplus, rich creditor country and, last but not least, Japan will continue to beat the German national soccer team," he laughed.

Jesper Koll

Jesper has been one of the foremost Japan specialists since his time as Chief Strategist at Tokyo offices of JP Morgan and Merrill Lynch and has been passionately advocating Japan's strengths through appearances at conferences and in media.  As a member of Governor Koike's expert panel to discuss Tokyo as a global financial center in 2016-17, he was one of the architects of Tokyo's vision.