Japan deal drought cuts IPO fundraising to lowest in 14 years

Initial public offerings (IPOs) in Japan are experiencing a significant slowdown, marking the lowest nine-month fundraising period since 2012, according to Bloomberg data. The decline can be attributed to regulatory changes and a lack of artificial intelligence (AI)-related companies in the pipeline, which have typically fueled IPO activity globally.

In contrast, Asia as a whole has seen a surge in dealmaking, with companies like taxi app provider Go raising funds at a four-year low. The absence of a vibrant AI startup ecosystem in Japan, similar to the success seen in China, has hindered the country's ability to captivate investor interest in the same way. Some companies considering an IPO have also been discouraged by the Tokyo Stock Exchange's (TSE) plan to raise the bar for companies seeking to remain listed in its startup section, as part of efforts to attract higher-quality issuers.