Why Foreign Investors Are Seeing Opportunity in Japan
Speakers
Summary
- Japan holds ¥2,000 trillion in retail assets, with historically 55% sitting in cash (the highest ratio globally).
- The Japanese corporate bond market is surprisingly small (¥60 trillion), roughly the size of NVIDIA's market cap, leaving a massive financing gap.
- Japan is undergoing "Senkaku" (fundamental reform), shifting from cash hoarding to investing in productivity, AI, and industrial renaissance.
- Private Credit is emerging as the "third way" of financing, filling the void left by banks (constrained by capital restrictions) and the underdeveloped public bond market.
Trade Ideas
"The equity market... is roughly the size of NVIDIA... there's not the well-developed corporate bond market... Banks have so many restrictions... capability to provide lending to a private sector is getting to a limited amount." Japan has a massive demand for long-dated capital for its "industrial renaissance" but lacks the banking capacity or public bond market to fund it. Apollo is explicitly positioning itself to fill this gap with private credit (investment grade, long-dated) and is partnering with local banks to tap into the ¥2,000 trillion retail cash pile seeking yield against 3% inflation. Apollo is the primary beneficiary of the structural shift in Japanese finance described in the video. Cultural resistance to foreign financial products or a sudden reversion to deflation which makes cash attractive again.
"Japanese companies are starting to use that cash to change the way they do business... receptive for new development of technologies like A.I... Japan is well-positioned for the industrial renaissance." The "Senkaku" reform is forcing companies to stop hoarding cash and start spending on CapEx and technology to boost productivity. This shift from balance sheet safety to active investment drives equity valuations higher. Sony is explicitly named as a company already working with Apollo to finance this transformation. Long Japanese equities (specifically broad indices or industrial/tech leaders like Sony) to capture the productivity uplift. Global recession dampening demand for Japanese industrial exports.
Marc Rowan
CEO, Apollo Global Management
"We are not going to Japanese corporates directly. We're going with their long time banker... In partnership with the Japanese banking system... We don't provide advice... That's the purview of the banking system." While Japanese banks are losing direct lending market share to private credit due to capital constraints, they are pivoting to become distributors of these private products. They retain the client relationship and advisory fees. This transforms them from pure lenders to fee-generating intermediaries. Watch to see if fee income from distributing alternative products offsets the stagnation in traditional corporate lending. Private credit firms eventually bypassing banks to go direct-to-consumer/corporate as the market matures.
Up Next
This Bloomberg Markets video, published February 21, 2026, features Marc Rowan, Hiromi Yamaji discussing APO, EWJ, DXJ, SONY, SMFG, MFG. 3 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Marc Rowan, Hiromi Yamaji · Tickers: APO, EWJ, DXJ, SONY, SMFG, MFG