Tokyo, 15 May 2026 – The Bank of Japan has warned that expanding activity by investment funds could become a more important source of financial-system risk, as hedge funds, private equity firms and other non-bank financial intermediaries deepen their role in Japan’s markets and corporate restructuring landscape.
The warning highlights a growing concern among global regulators: financial risks are no longer concentrated only inside traditional banks. While Japan’s financial system remains broadly stable, the central bank is paying closer attention to the way overseas funds, private capital and leveraged investment strategies can transmit shocks across borders and asset classes.
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