Japan FinTech Observer #23

Welcome to the twenty-third edition of the Japan FinTech Observer. This week, we have crossed 7,000 subscribers, and we appreciate you all spending your valuable time with us. Since there is quite a flow of non-FinTech news crossing our desk as well, we have created the "Japan Startup Observer" LinkedIn group in the hope that those who are interested broadly in the Japanese startup ecosystem find it useful, and might also contribute.

Here is what we are going to cover this week:

• Venture Capital & Private Equity: Nomura invests into a fund managed by New Forests Asia; Headline invests in Vietnam's MFast; gumiCryptos invests in IronMill; Mitsui Sumitomo Insurance invests in nuclear fusion and autonomously driving trucks; Incubate Fund invests in Cerby & Hyperithm in Campaign; Softbank exits some Latin American investments and sells a stake in India's Zomato
• Regulation: the FSA published its administrative objectives for this year
• Payments: the BOJ published the English version of its annual review
• Capital Markets & Asset Management: the TSE published the results of its survey of international investors regarding English disclosures of Japanese companies; the TSE will also update its incentives for ETF market making on October 1; the OSE's TONA interest rates futures have been a smashing success since launching in May; Rakuten Securities and SBI Securities will go "zero fee" for domestic stock trading
• The Last Word: A History of 10Y JGB Yields

Forbes Asia 100 to Watch

Forbes has published its cross-industry list of 100 Asia startups to watch, and while not a systematic survey, it does provide another data point for the startup ecosystem in Japan, which accounted for three of the startups included, from the biotechnology and enterprise technology sectors. Regional FinTech leadership is claimed again by Hong Kong and Singapore, with each contributing four FinTech startups to the list.

Venture Capital & Private Equity

• Nomura has entered into an agreement through a subsidiary to invest in Tropical Asia Forest Fund 2, a Southeast Asia forestry fund managed by New Forests Asia; this is Nomura’s first investment into a forest fund managed by New Forests; Mitsui & Co., Ltd. , a joint shareholder of New Forests, has also signed an investment agreement with TAFF2
• MFast is a financial product distribution platform with a leading network of collaborators in Vietnam; the company successfully raised USD 6m in a Series A funding round led by Wavemaker Partners, with the participation of two new investors Finnoventure Fund I (managed by Krungsri Finnovate - owned by MUFG ) and Headline - Asia , along with other investors
• IronMill announced that it has raised USD 2.6m in seed funding led by gumi Cryptos Capital , and including LongHash Ventures , Superscrypt , Kestrel, and others
• nT-Tao Compact Fusion Power announced that Mitsui Sumitomo Insurance Group Venture Capital has joined the Series A funding round in a deferred investment for an undisclosed sum
• 株式会社T2 has raised a total of JPY 3.5bn (USD 24m) in a Series A round with participation from Mitsui Sumitomo Insurance and Sumitomo Mitsui Trust Bank , alongside Usami Mineral Oil, Toho Acetylene, Mitsui-Soko Logistics, JA Mitsui Lease, KDDI Corporation, Kiyo Capital Management, and Daiwa Logistics, to expand its Level 4 autonomous truck program
• Cerby raises USD 17m to mitigate the risks of nonstandard applications; Incubate Fund participated in this Series A
• Hyperithm has invested in Campaign, a no-code platform for creators and brands to build customer engagement programs
• SoftBank Investment Advisers exited stakes in Pismo , Avenue Holdings Cayman, and Yaydoo ; SoftBank Group Corp. says they remain committed to Latin America; the company has invested USD 7.6bn in the region and has USD 2bn reserved for future investments in Latin America
• SoftBank's Vision Fund also sold a 1.17% stake in Indian food delivery firm Zomato in a deal valued at 9.47 billion rupees ($114.7 million)

Regulation

• The Financial Services Agency, Japan (JFSA, 金融庁) published its “Financial Administration Policy,” which is a set of priority issues in financial administration and policies for addressing financial administration for the 2023 administrative year; with an English version of the document currently not available, we have provided a translation of the overview section

Payments

• The Bank of Japan published the English translation of its “Annual Review 2023”, covering the fiscal year that ended in March, and there were eight mentions of “CBDC”, re-confirming the Bank's thinking around the project

Capital Markets & Asset Management

• The Tokyo Stock Exchange has published the results of its second survey of overseas investors on English language disclosures by Japanese companies (the first survey was conducted two years ago); the verdict: zero percent satisfied
• The Tokyo Stock Exchange introduced an ETF Market Making Incentive Scheme in order to improve liquidity in the ETF market in July 2018; thereafter, TSE launched ETF Market Making Scheme Version 2.0 (Ver.2.0) in April 2019 and will now be updating said scheme on October 1, 2023
• With an anticipated rise in Japanese interest rates, 3-Months Tokyo overnight average rate?(TONA) Futures have attracted the interest of investors worldwide since debuting on the Osaka Exchange in May
• Both SBI Securities and Rakuten Securities, Inc. announced that they will start offering zero fee domestic stock trading starting from the end of September and beginning of October, respectively; this moves comes in light of surging (in JPY terms) Japanese stock markets, and a number of new entrants such as Woodstock , Webull Securities (Japan) Co. Ltd. , and ブルーモ証券 Bloomo Securities

Other Media

• Ministry of Finance, Japan, "Japanese Government Bonds Newsletter", August 2023 edition
• Bank of Japan, "Annual Review 2023"
• Bank of Japan Governor Ueda at the Jackson Hole Economic Policy Symposium, "Globalization at an Inflection Point"
• Blockchain Governance Initiative Network , recordings of the sixth session in July 2023

The Last Word - A History of 10Y JGB Yields

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Have an awesome week ahead.