Japan Wants USA Companies to IPO 

Japan is becoming more shareholder-oriented and capitalistic to promote growth. Japan wants USA companies to IPO on the Stock Exchange, give more stock options, and recruit foreign investment.

Key Points:

• Japan is moving towards a more capitalist market, but PLEASE DO NOT BECOME SILICON VALLEY.
• Japan Stock Exchange wants USA companies to IPO if foreign companies have material business in Japan
• Employees are getting more and more stock options
• Rents and property prices are increasing
• But the fun of Japan is at the goofy festivals like this washtub race and our little league baseball exchange
• Written by Kurt edited by ChatGPT and Grammarly

I recently returned from a quick two-week trip to Japan. I lived there for three years from 2013-2016, and in 1999; each time I went back, I tried to understand not only what had changed, but what the changes said about where the country was headed.

This time, one shift felt impossible to miss: Japan wants people to own more equity.

That may not sound revolutionary to an American. In Silicon Valley, equity is practically a language of its own. Employees compare option grants, startups celebrate funding rounds, and an IPO is treated as both a corporate milestone and a personal payday.

Japan’s postwar economic model was never built primarily around maximizing shareholder returns. It emphasized stable employment, long-term relationships, market share, and the interests of employees, customers, banks, and suppliers. Shareholders were only one constituency among many—and often not the most important one.

That balance is changing.

From savings to investment

The most visible evidence is the stock market. On August 10, 2026, the Nikkei 225 closed at 66,970—roughly twice its level at the beginning of 2024. Japan Exchange Group CEO Hiromi Yamaji describes the broader transition as a shift “from savings to investment,” encouraged by the expanded NISA tax-advantaged investment program, corporate-governance reform, and pressure on companies to pay closer attention to their cost of capital and stock price.

For decades, Japanese households accumulated enormous cash savings while many Japanese companies sat on excess cash and accepted mediocre returns. The new message from policymakers and the Tokyo Stock Exchange is different: capital should be put to work.

If you want to understand the philosophy behind the shift, watch this discussion with Yamaji. His message is essentially that Japan does not merely want more companies to list. It wants better companies, better governance, more investment, and a stronger culture of equity ownership.

Japan wants USA Companies to IPO on the Japan Stock Exchange, too

The most surprising point was that the Tokyo Stock Exchange is not thinking only about Japanese companies. It is interested in overseas companies that have meaningful revenue, customers, or operations in Japan.

That creates an intriguing proposition for foreign founders: if Japan is already an important market for your business, why not give Japanese customers, employees, and investors the opportunity to participate in your growth?

Foreign investment is already moving in that direction. Japan’s inward foreign direct investment stock reached a record ¥53.3 trillion at the end of 2024, according to JETRO. That remains modest relative to the size of the Japanese economy, but the direction is clear.

And of course, we all know about Berkshire Hathaway’s large stake in the three biggest trading firms in Japan and more recently in Tokio Marine Insurance Company. 

But big companies aside, Japan wants USA Companies to IPO — provided they have a material business in Japan.

Employees are becoming owners

Equity compensation has historically played a much smaller role in Japan than in the United States. Japanese employees generally joined companies for salary, status, training, and long-term security—not for the possibility that stock options might transform their wealth.

That is beginning to change. More startups and established companies are using stock-based compensation, while tax and regulatory reforms have made stock options more practical. Japan is still well behind the United States in the share of compensation tied to equity, but that gap is precisely the opportunity.

As employees become owners, their relationship with work changes. They are not just participating in a company; they have a direct stake in its growth. Japan is urging up to 30% equity compensation for employees and executives, compared to 40-50% in Europe and 70% in the US. Used wisely, equity can help Japanese startups compete for talent, reward risk-taking, and create more founders and angel investors after successful exits.

The danger is importing the worst parts of the American model: excessive executive pay, short-term decision-making, and the belief that every human activity must be financialized. Japan should not become Silicon Valley. It should borrow the useful incentives without abandoning the social cohesion that makes Japan distinctive.

And I can see that Tokyo culture is taking a lot from Silicon Valley. I hope it doesn’t continue.

The price of becoming more attractive

For owners and investors, that creates wealth. For younger workers and renters, it creates a less comfortable reality. A more dynamic Japan may also become a more unequal and expensive Japan.

That tension deserves attention. Rising asset prices can make a country feel prosperous even when the benefits are unevenly distributed. The success of Japan’s new capitalism should not be measured only by the Nikkei or the number of IPOs. It should also be measured by whether ordinary people can participate in the upside.

And if more comapanies go IPO, these prices will continue to increase. Japan wants USA companies to IPO!

The real Japan is still outside Tokyo

I held a fun baseball exchange with Long Beach Little League Baseball with my old friend and teammate Kevin. We even took batting practice at Ichiro’s batting cages growing up!

I also had a crazy washtub race in Atami, fell out of the boat, and pulled my groin.