Financial Services Strategy To Promote Growth Investment: Press Conference By KATAYAMA Satsuki, Japan Minister Of Finance And Minister Of State For Financial Services

[Questions and answers:]

Q.

The Financial Services Strategy to Promote Growth Investment, formulated by the government on July 21, sets a target of increasing the combined share of equities, investment trusts, and debt securities in household financial assets to 40% by 2040. This would represent an approximate doubling from the level as of March 2025. How do you believe this target can be achieved? There is also criticism that households could become more exposed to the risks of market fluctuations and that lower-income households without the financial means to invest could be left behind. How do you view such criticism?

A.

Under the Financial Services Strategy to Promote Growth Investment, formulated on July 21, we intend to promote steady asset building by households so that people can benefit from the fruits of growth generated by the approximately 370 trillion yen in growth investment to be undertaken going forward. From this perspective, we have set a target of increasing the combined share of securities, including equities, investment trusts, and debt securities, in household financial assets to 40% by 2040, a level comparable to that in Europe. This target is the result of intensive deliberations by the committee members. Toward this target, we will further improve the usability of NISAs, for which practical improvements are already underway, and conduct public outreach to promote their wider adoption and firmly establish their use. We will also work to make further improvements to corporate defined contribution pension plans and iDeCo. We take seriously, and humbly acknowledge, the fact that criticism of the kind you have raised can naturally arise. The Financial Services Agency will promote financial and economic education tailored to individual life plans, working with the Japan Financial Literacy and Education Corporation (J-FLEC) and other relevant organizations. Our aim is to ensure that no one, from younger people to older people, is left behind and that people can invest within reasonable limits after properly understanding the risks involved. The number of NISAs held has already reached 28 million. Given the perception that traditionally existed in Japan that holding equities was something reserved for a particular type of person, I think you can probably appreciate that such a figure would once have been difficult to imagine. Considering also that more than one in four people now hold such an account, I believe that equities and investment accounts may no longer be something limited to only a segment of the wealthy. At the same time, we fully understand that, in order to create the financial capacity to invest, real wage growth must remain positive. Real wage growth has recently turned positive, but we must first concentrate on firmly establishing this trend. It is then important, in my view, to achieve as soon as possible stable economic conditions in which investment can generate a virtuous cycle. We also announced corporate governance reforms. When we published the announcement in English as well as in Japanese, it attracted a very large number of visits. I believe the reforms may also be highly regarded by those considering investment in Japan. To create conditions in which Japanese companies can grow sustainably, it is important to enhance corporate governance and asset management services in various respects. I also believe that asset ownership reform aimed at serving the best interests of beneficiaries and initiatives to promote customer-oriented business conduct are important. We intend to continue advancing these initiatives.

Q.

Yesterday, there were reports concerning a business integration between Iyo Bank and Ehime Bank. I believe moves toward the consolidation of regional banks have been gaining momentum across Japan. As Minister of State for Financial Services, how do you view these reports and the broader trend?

A.

I am aware of the reports. As has consistently been our practice, we do not comment specifically on business decisions of this kind made by individual financial institutions. That said, speaking in general terms, we consider it desirable, from the standpoint of harnessing regional financial power, for regional financial institutions to undertake forward-looking management reforms, strengthen their business foundations, and enhance their financial functions in light of changes in the business environment, including regional population decline. We believe it is very important for them to consider a range of options for advancing these initiatives and enhancing their corporate value as financial institutions.