Will they, or won't they? The Bank of Japan's Monetary Policy Meeting (MPM) will publish its rate decision on Tuesday, although, if you are reading the Nikkei, you would be forgiven to believe the decision has already been made (the BoJ has as many leaks as a long-abandoned akiya).
Similar to the Nikkei extending beyond the bubble high, and cracking 40,000, any BoJ move in March (or April) will be largely symbolic and not change the mid-term path for Japanese interest rates. NIRP will end, and the range for short-term interest rates move from between -0.1% and 0% to between 0% and 0.1%. Expect an upper range of 0.25%, or possibly 0.5% by the end of the year.
FX markets did not budge. The JPY/USD exchange rate is set by the Fed, and not the Bank of Japan, having moved from the lower 140s at the end of last year, when economists were expecting up to six Fed rate cuts, back close to 150 now that the consensus seems to settle on three.
Here is what we are going to cover this week:
- Venture Capital & Private Markets: Decima has completed a funding round of 4.5 billion yen for its fund jointly managed with gumi, MZ Cryptos, SBI Holdings, and Animoca Brands; Integral Corporation announced the first closing of “Fund V Series” at JPY 180 billion raised; M&A Cloud has raised a total of 1.25 billion yen through debt financing from Kiraboshi Bank, Shizuoka Bank, Japan Finance Corporation, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and Fivot (Flex Capital); Hyperithm has invested in Superfluid
- Green Finance: FANPS (Sumitomo Mitsui Financial Group, MS&AD Holdings, Japan Finance Corporation, Norinchukin Bank) has established a platform to accumulate knowledge related to "nature positive"; Carbon EX, a 50/50 joint venture between ASUENE and SBI Holdings, demonstrates strong growth; Hitachi, in collaboration with Persefoni Japan, has developed a green house gas (GHG) emissions calculation service
- Insurance: international InsurTech bolttech has partnered with refurbished device marketplace Back Market for one of its first commercial launches in Japan; Dai-ichi Life acquire a 19.9% strategic minority stake in Canyon Partners; AXA Life Insurance and AXA Direct Life Insurance merge
- Banking: an alliance of Airbnb, ORICO, and Akikatsu, is aiming at promoting the effective utilization of vacant homes through ORICO-guaranteed loans from regional financial institutions; Hokkoku Financial Group plans to build a fully cloud-based acquiring system in collaboration with Visa and Infcurion
- Payments: Wise Payments Japan has obtained a Type 1 license as a Money Transfer Operator; the Japanese government is reportedly in discussions with Southeast Asian countries about sharing QR code payment services; PayPay, PayPay Bank, and PayPay Securities launched a simplification of account opening procedures
- Capital Markets & Asset Management: Japanese securities firms stepping up support for startups; Nomura has realigned the firm’s collective asset and investment management capabilities in the Americas; Matsui Securities has selected Broadridge Financial Solutions' cloud-based SaaS post-trade processing solution for its stock lending business
- Digital Assets: TIS has started a collaboration with Umi Labs, integrating web2 and web3 technologies on the Sui Network; Sony Bank announced the release of “Sony Bank CONNECT” in summer 2024, aiming to contribute to the expansion of the creator and fan economy in the web3 era; KDDI, STYLY, monoAI technology, and REALITY XR cloud announced the launch of the “Open Metaverse Network”
Venture Capital & Private Markets
- Decima GP Limited has completed a total funding round of approximately 4.5 billion yen for Decima Fund; the Fund was established with the purpose of incubating domestic projects aiming for overseas expansion and overseas projects aiming to enter the Japanese market, as well as investing in listed tokens; the Fund will be jointly managed with GPs that have expertise in the Web3 domain, including gumi, MZ Cryptos, SBI Holdings, and Animoca Brands
- Integral Corporation announced the first closing of their new funds, the “Fund V Series”, with several domestic and foreign investors participating, and approximately JPY 180 billion raised; the final Capital Commitment goal is more than JPY 200 billion for the Fund V Series, expected to be completed during 2024
- M&A Cloud has raised a total of 1.25 billion yen through debt financing from Kiraboshi Bank, Shizuoka Bank, Japan Finance Corporation, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and Fivot (Flex Capital); the funds raised will be invested in hiring to strengthen the organization, as well as in marketing to expand the advisory business and the matching platforms “M&A Cloud” and “Funding Cloud”
- Hyperithm has invested in Superfluid, an Ethereum-based token streaming protocol that enables real-time crypto transfers; Superfluid is a revolutionary asset streaming protocol that brings subscriptions, salaries, vesting, and rewards to DAOs and crypto-native businesses worldwide
- Deerpath Capital, one of the largest providers of customized, cash-flow based senior debt financing to lower middle market companies across North America, announced the opening of its latest international office in Tokyo
Green Finance
- FANPS has established a platform to accumulate knowledge related to "nature positive" through industry-academia cooperation and is working to support companies in achieving that goal; FANPS comprises members centered around Sumitomo Mitsui Financial Group, MS&AD Holdings, Japan Finance Corporation, Norinchukin Bank, and their affiliated think tanks, as well as collaborations with researchers in related specialized fields such as ecology
- The number of registered buyer and seller companies on Carbon EX, a 50/50 joint venture between ASUENE and SBI Holdings, has exceeded 900; additionally, the available trading volume of domestic and international carbon credits on Carbon EX has reached approximately 5 million tons; Carbon EX facilitates the sale and purchase of various credits, including voluntary carbon credits, J-Credits, non-fossil certificates, and overseas renewable energy certificates
- Hitachi, in collaboration with Persefoni Japan, has developed a green house gas (GHG) emissions calculation support service for investment/lending targets at financial institutions to assist in calculating financed emissions (GHG emissions from investment/lending targets); this will be provided by Hitachi as an additional offering for the environmental information management service utilizing EcoAssist-Enterprise
Insurance
- International InsurTech bolttech has partnered with leading refurbished device marketplace, Back Market; the partnership, which marks one of bolttech's first commercial launches in Japan, will deliver embedded device protection to Back Market's customers through a seamless online experience
- Canyon Partners, a $24 billion global alternative investment manager, announced that Dai-ichi Life Holdings has agreed to acquire a 19.9% strategic minority stake in the Canyon business; Under the terms of the agreement, Dai-ichi has the right to acquire up to 51% of the equity interest in Canyon in 2027 and up to 100% in 2029
- The FSA has given approval to AXA Life Insurance and AXA Direct Life Insurance for the merger of the two companies based on the provisions of Article 167, Paragraph 1 of the Insurance Business Act, under the name AXA Life Insurance, a 100% subsidiary of AXA Holdings Japan
- On the occasion of InsureTech Connect Tokyo last week, Plug and Play have released their Japan "Insurtech Report 2024"
Banking
- Accenture has published its take on Aozora Bank's US commercial real estate exposure and the overall Japanese banking sector in its February 2024 macro economic brief; we have previously reported on Aozora's earnings adjustment for this fiscal year in the Japan FinTech Observer
- An alliance of Airbnb, ORICO, and Akikatsu, is aiming at promoting the effective utilization of vacant homes; users of the web information platform “Akikatsu Navi,” which matches vacant homeowners with prospective buyers, will be able to obtain a “Home Sharing Loan” when purchasing or renovating a vacant home for the purpose of home sharing; the “Home Sharing Loan” is an unsecured loan or small business loan with high convenience to meet a wide range of funding needs related to personal and corporate home sharing operations; the loan limit is expected to range from 500,000 yen to 1,000,000 yen, with a maximum repayment period of 5 to 10 years; ORICO will guarantee the loans from regional financial institutions
- Hokkoku Financial Group announced the initiation of building a full cloud-based acquiring system in collaboration with Visa Worldwide Japan and Infcurion; this system is equipped with functions necessary for acquiring operations such as authorization, clearing, merchant settlement and management, and connections to payment centers and international brands, for the latter of which Hokkoku FG will be the first domestic company to utilize “Visa Cloud Connect”
Payments
- Wise Payments Japan has obtained a Type 1 license as a Money Transfer Operator from the Financial Services Agency of Japan; Wise is one of the first foreign international financial service companies to obtain this license (Nium reported obtaining such license on March 1), which enables transfers of up to 150 million yen to over 50 countries (including US dollars, British pounds, euros, and Australian dollars) using the mid-market rate with no hidden costs
- The Japanese government is reportedly in discussions with Southeast Asian countries about sharing QR code payment services; the potential linkages will let Southeast Asian travelers use their homegrown payment apps for transactions in Japan – and vice versa
- PayPay, PayPay Bank, and PayPay Securities launched a simplification of account opening procedures; if a user has completed identity verification (eKYC) with PayPay, the mini apps “PayPay Bank” and “PayPay Asset Management” within the cashless payment service, “PayPay” now offers a service that allows skipping of some of the procedures required to open an account, such as ID verification documents and taking a selfie
Capital Markets & Asset Management
- Japanese securities firms stepping up support for startups
- Nomura Holdings has realigned the firm’s collective asset and investment management capabilities in the Americas under the new brand Nomura Capital Management (NCM); NCM is a subsidiary of Nomura Holding America (NHA) and will integrate Nomura Group’s public and private credit offerings to maximize the firm’s growth opportunities and to better serve institutional and intermediary clients in the Americas
- Matsui Securities has selected Broadridge Financial Solutions' cloud-based SaaS post-trade processing solution to drive operational efficiency in its stock lending business; system integrator Intelligent Wave will develop the front office component and system integration as well as provide project management and overall consultation to Matsui Securities
- Asset manager Franklin Templeton has appointed, effective April 1, Takashi Takamura as the president and country head of Japan, reporting to Tariq Ahmad, head of Asia-Pacific, with responsibility for leading the firm’s retail and institutional business in Japan
- Nomura has published its "Individual Investor Survey March 2024"
Digital Assets
- TIS has started a collaboration with Umi Labs Japan from March 2024, aiming for social implementation by integrating web2 and web3 technologies utilizing zero-knowledge proofs, decentralized ID/VC/VP, and OAuth on the Sui Network; in this collaboration, TIS will be responsible for planning, design, and production, while Umi Labs Japan will take charge of technology research and development, with the goal of creating new markets
- Sony Bank announced the release of “Sony Bank CONNECT” in summer 2024, aiming to contribute to the expansion of the creator and fan economy in the web3 era; users will be able to enjoy digital content such as NFTs previously distributed by Sony Bank through campaigns, and digital content to be presented to customers who purchase Sony Bank’s digital security “US Dollar-Denominated Green Finance Security Token (№1 of 2024)”
- KDDI, STYLY, monoAI technology, and REALITY XR cloud announced the launch of the “Open Metaverse Network,” Japan’s largest metaverse alliance that connects multiple metaverse platforms; this alliance enables companies and municipalities considering business utilization of the metaverse not only to use a single metaverse platform but also to connect multiple metaverse platforms and incorporate real-world spaces for multidimensional project planning; it offers comprehensive services, from consulting for smooth implementation and solving business challenges to event planning and spatial content production
In the Region
- We have published the first edition of the "Korea FinTech Observer" as we have seen sufficient news flow crossing our desk; we might aim to release the Korea coverage twice per month
- We have taken a deep dive into the startup support programs the HKSTP - Hong Kong Science and Technology Parks Corporationoffers; Connie Guoprovided a comprehensive account of HKSTP offers for startups and investors; the recording is available on our YouTube channel
- The 136th episode of the eXponential FinancePodcast features Arthit (T) Sriumporn, Founder & Chief Executive of Rakkar Digital, a digital asset custodian; you can find the podcast on all major platforms, or through our Podlink
Have an awesome week ahead.
