But two prime ministers on, what’s evolving is more ambitious, suggesting that Japan is becoming an innovator rather than just a follower in asset management.
Some of the manifestations of this thinking were outlined recently by Hiroshi Nakaso, chairman of FinCity.Tokyo, a quasi-government financial promotion agency, at an event in the Japanese capital.
“At the core of this effort is strengthening Japan’s investment chain, centred on asset owners such as pension funds, including corporate pensions – and asset managers,” Nakaso said at the event organised by FinCity.Tokyo and the Tokyo metropolitan government.
He said the vision of an asset management nation adopted by the Kishida administration has been firmly accepted by succeeding administrations.
What this envisages is continuing reform of Japan’s corporate pension system, drawing upon models such as Australia’s superannuation system.
Under this framework, employees are mandatorily enrolled, employers are required to make contributions, and individuals choose funds that reflect their occupation and investment preferences.
“System-level investment”
Japan, according to Nakaso, needs to strengthen asset building opportunities for employees of small and mid-sized enterprises, where the adoption rate of corporate pensions remains low.
He suggested that by making greater use of individual defined–contribution schemes and allowing employers to make additional contributions, it’s possible to create a low-cost alternative to traditional corporate pensions, one that can also help improve employee retention.
Another important concept is encouraging employees to engage more actively with how their money is managed. When employees engage with asset owners and investment policies reflect their values, it can create a virtuous cycle: improve investment outcomes, strengthen corporate governance, and contribute to resolving broader social challenges.
Nakaso said “system-level investment” is an emerging theme that may become increasingly important and which can strengthen the entire investment value chain. This concept shifts the focus away from short-term excess returns at the individual company level toward improving the stability and resilience of the market system as a whole.
The underlying recognition is that structural risks such as climate change and widening inequality cannot be fully addressed through portfolio-level risk management alone.
Nakaso said that long-term investors may need to engage more actively with the system through market design, policy dialogue, and strengthening the social and economic infrastructure.
“System-level investment could become a shared agenda for asset owners, asset managers, and regulators, and may well shape the next phase of responsible investment”, he said.
