Susan Chan, head of BlackRock Group's Asia Pacific region, said that with the Bank of Japan's monetary policy changes and Japan's corporate governance reforms, Japan has become a popular target for global investors.

“The market has turned and is gathering strong momentum, and we are basically seeing the end of decades of deflation and economic stagnation in Japan,” Chan said.

Chan said that the normalization of interest rates and the emergence of inflation will encourage local residents to switch from holding cash to investing, such as investing in ETFs. More than half of the 2141 trillion yen (about 13.7 trillion US dollars) of financial assets owned by Japanese households exist in the form of bank deposits.

According to Chan, as clients reconsider their portfolios and meet changing needs, BlackRock, the world's largest asset management company, has seen Japan as one of Asia's main opportunities. Earlier this year, the Bank of Japan cancelled the last negative interest rate policy in the world, and the Japanese stock market surpassed the record high of 34 years ago.

Although aging poses challenges to Japan, Chan notes that Japan's focus on automation, robotics, and semiconductors puts it “in an advantageous position” when more countries around the world face the same problems. “All of these topics are globally relevant, making Japan an amazing and worthwhile economy to participate in,” she said.

Chan is also optimistic about the growth of ETFs in the Asia Pacific region, particularly Japanese ETFs. According to data compiled by foreign media, the capital inflow to Japanese ETFs so far this year is close to 15 billion US dollars, which is more than the sum of 2022 and 2021.

Over the past year, BlackRock deepened the company's presence in Japan by launching a new ETF, and is now the fifth largest issuer of such products in Japan. “We are seeing investor demand for ETF listings, which is particularly evident in Japan, where we see a good level of acceptance across the region,” Chan said.

Furthermore, Chan also stated, “If the Federal Reserve actually cuts interest rates, investors' pursuit of returns will become more common. I think in this field, the private market will continue to provide lasting support to our customers.”

Despite the generous yields offered by the open market, investors continued to pour into private equity and debt. According to a report released by McKinsey in March, the asset size of the private equity industry continued to grow 12% to reach $13.1 trillion as of June 2023.