Japan Post Bank aims to launch an investment fund with local financial institutions to help revitalize small-town economies, taking the first step toward increasing the risk exposure of its 200 trillion yen ($1.66 trillion) in assets under management.
The Financial Services Agency is clearing the regulatory path for the bank, part of government-owned Japan Post Holdings, to contribute to investment funds.
Once that happens, the launch could occur as early as next year.
“Safety first” has long been the rule for managing Japan’s postal savings. Never before have they been mobilized as risk capital for small and midsize enterprises located beyond a major metropolis.
This would shift Japan Post Bank’s business model, as the fund represents a way for the bank to diversify its assets, which are heavy in government bonds, in hopes of generating higher returns.
The fund’s investments, in turn, could prime the pump for new flows into local companies.