Japan’s Asset Management Business

The Japanese asset management industry has grown since the BOJ embarked on ultra-accommodative monetary policy in response to former prime minister Abe’s call for bold monetary easing to vanquish deflation. Its operating profits have nearly tripled by virtue of asset inflows coupled with sustained asset price appreciation. Of the investor segments the industry serves, the one that has contributed least to its AUM growth of recent years is retail investors. While pension funds, banks and other institutional investors have been divesting JGBs and reinvesting the proceeds with asset management companies, households have not shifted much of their assets out of savings deposits into investment trusts or other investment products.