The Japan financial market has played an important role in setting up a strong economic base in Japan. The financial market of Japan makes arrangements for sufficient amount of funds to support the new industries. It has also established a sound asset management system.
In keeping with the impact of globalization, the financial market in Japan also looks into the fact that Japan provides adequate amount of funds to the rest of the world. Resource distribution is a key area of functioning of the Japan financial market.
The Japanese financial market efficiently channelizes the individual savings in Japan that amounts to more than 1200 trillion yen. The aim is to rejuvenate the market by making the financial institutions dispose off the bad loans. The reform process is free, fair and global in the true sense.
The big boom experienced by the Japanese economy has led to the establishment of a new framework known as the “Japan’s Big Bang”. This enabled the financial market of Japan to compete at an international level. With the view of establishing a better regulatory system, the Financial Supervisory Agency has been set up.
The threat of non-performing loans has also been kept at bay. The functions of the Japan financial market includes balancing of demand and supply of loanable funds and also determine the market rate of interest. The financial market in Japan acts as the main source of fund besides being an important means of investing excess funds both for individuals and companies. The market is a chief supplier of equity capital. Through effective channelization of equity capital, overall productivity can be raised. Those companies that have raised productivity and managed to earn high rates of returns on investment have access to equity capital.
In order to prevent a possible collapse of the financial market of Japan, public funds are being used to support the banking system of Japan. In the recent past, the financial institutions of Japan are participating in Merger and Acquisition activities. This has resulted in furthering the impact of the “big bang”.
Last Updated on : 1st August 2013