Japan Alternative Financial Investments

Japan is undergoing a strategic transformation in its financial landscape, offering a timely opportunity for U.S. asset management companies and alternative investment fund managers. As of December 2024, Japanese households held a staggering $14.7 trillion (¥2,230 trillion) in financial assets, yet more than half remains in cash or bank deposits, significantly underweighted in securities compared to the United States. To stimulate long-term economic vitality, the Japanese government is actively encouraging a shift from savings to investment, setting the stage for a more dynamic financial ecosystem.

Alongside household assets, Japan’s institutional investor base, which includes pension funds, insurance companies, banks, university endowments, and family offices, is a powerful financial force. According to the Boston Consulting Group, global assets under management (AUM) hit a record $128 trillion in 2024, up 12% from the previous year. Japan’s own AUM followed suit, rising 12% to $5.9 trillion. In 2024, Japan’s Government Pension Investment Fund (GPIF), the world’s largest asset owner, alone managed $1.6 trillion (¥250 trillion).

Low interest rates in the Japanese domestic market have prompted institutional investors to look outward, and alternative investments are gaining traction. Over 90% of Japanese institutional investors, including major pension funds, have incorporated alternatives into their portfolios. While GPIF currently allocates just 1.63% of its assets to alternatives (as of March 2025), its 5% ceiling leaves substantial room for growth.

This growing momentum that is driven by both government policy and market realities makes Japan a compelling destination for U.S. alternative fund managers and advisors. Demand is rising for global expertise, innovative fund structures, and reliable cross-border partners. U.S. firms that can offer competitive returns, transparency, and tailored solutions are well-positioned to capitalize on this expanding trend.

For more information, contact Office.Tokyo@trade.gov or visit our website at https://www.trade.gov/japan.