Speech by Nikhil Rathi, FCA chief executive - Japan and the UK: Shared growth, shared future

Event: Japan Weeks 2025, opening reception

Delivered: 20 October 2025

Note: this is the speech as drafted and may differ from the delivered version

Key points

• Investability comes from the strength of longstanding global centres and predictability that allows consumers to make informed decisions.
• London and Tokyo have a shared commitment to and responsibility for financial excellence, innovation and global leadership – and there is enormous potential to strengthen the links between our markets.
• Our newly established Asia-Pacific office will foster greater collaboration, aligned standards and shared growth, and we encourage businesses to engage directly with us.

While most people might expect Japan and the UK to be quite different, I have found that we have quite a bit in common.

Our countries share a love of timeliness, preparedness, queueing – and, apparently, Paddington Bear.

The UK has loved seeing His Excellency Hiroshi Suzuki, Japanese Ambassador to the UK, bringing Paddington everywhere from London to Nagoya – via Shinkansen, no less.

These are recent links.

The relationship between the UK and Japan spans centuries.

In 1858, we signed the Treaty of Amity and Commerce. I find that name fitting, as the spirit of friendship has endured.

In the nineties, both countries held festivals showcasing the other's culture.

And during a recent visit to Japan, the Duchess of Edinburgh and Crown Princess Akishino planted an English oak tree at the State Guest House – one grown from a tree planted by Queen Elizabeth II in 1975.

But the spirit of commerce has continued, too.

• Lloyd's of London appointed its first agent in Japan in 1868.
• The Bank of Tokyo was the first Japanese bank to open in London, in 1884.
• In 1988, Sanko Gosei became the 100th Japanese firm to invest in the UK.
• In 1995, our then foreign ministers endorsed the UK/Japan Action Agenda, which offered concrete ways to bolster bilateral cooperation.

It still underpins our relationship.

In 2021, the UK-Japan Comprehensive Economic Partnership Agreement marked the UK's first major trade deal as an independent trading nation.

Today, Japan is one of the UK's top investors, and trade between our countries has reached £31 billion.

We welcome Japanese investment and participation in the UK's global financial services centre, and honour the exceptional contributions made by Japanese firms throughout history.

I believe we have the potential to become even greater partners, and the UK is committed to fostering our relationship.

To instil in it chowa – what Hideaki Omiya described as ‘a spirit of harmonious partnership' – by enhancing our financial cooperation across regulation, innovation and investment.

Deepening the UK-Japan relationship

Before signing the Treaty of Amity and Commerce, Queen Victoria gifted the Japanese Emperor a ship called HMY Emperor as a token of friendship.

This year, the UK Navy visited Tokyo in one of its most powerful ships: the HMS Prince of Wales. 

It covers hundreds of miles a day, conducts strike missions and deploys troops. But it also fosters our international relationships – just like the HMY Emperor did.

I grew up in a ship-building town and know the quiet power a ship carries.

In many instances, it is a first line of security.

But in today's world, conflict is no longer just physical. It's economic and technological – which means our security must be, as well.

One-third of Japanese firms have experienced a cyberattack. And over a quarter of UK businesses have been hit by one in the past year.

These attacks are devastating, even for large businesses like Asahi Group and Marks & Spencer.

Asahi saw falling share prices, product launch delays and near-empty shelves.

Marks & Spencer went without contactless payments, inventory systems and online shopping.

These threats are real. But when we signed the Hiroshima Accord, our countries promised to ‘stand shoulder to shoulder' – and we remain each other's closest security partners.

So, we will guard against threats together. With amity and commerce.

We will tackle global challenges through investment, within nations and between friends. Because finance is part of national security.

And sound security is what underpins market integrity, and therefore growth and competitiveness.

Our countries are already working on this together.

• The Sumitomo Corporation has partnered with the UK government to invest £7.5 billion into offshore wind and hydrogen projects.
• With the recent Program for Promotion of Foreign Direct Investment in Japan, the UK will increase investment into key growth sectors.
• As part of Project Guardian, we are working together alongside the Swiss Financial Market Supervisory Authority (FINMA) and the Authority of Singapore (MAS) to explore tokenisation and decentralised finance.

It comes at an especially opportune moment for the FCA as we prepare to design the next stage for asset management.

Tokenisation could play a pivotal role – and drive changes that benefit both industry and consumers.

As home to 2 of the world's leading financial markets, our countries have plenty to offer each other.

Japan leads in manufacturing and green technologies, and has a deep pool of capital. Its sense of stability is also a huge appeal to UK investors.

The UK has the size, scale and stability of its markets, plus proven performance and a diverse investor base. We also offer a stable and well-established legal environment and a strong record of innovation.

Leading markets with global commitments

We were pleased to hear of the Japan Financial Services Agency's (JFSA) goals at this year's UK-Japan Financial Regulatory Forum.

Many of the initiatives shared in the plan for Promoting Japan as a Leading Asset Management Center resonate strongly with the FCA's objectives.

• Ensuring open, competitive markets.
• Reducing unnecessary barriers to entry.
• Fostering greater international alignment.

These are critical for Japan's asset management market, which is worth $4.9 trillion and set to reach $9.6 trillion by 2030.

But they're also critical to our partnership.

They allow UK firms to operate with confidence in Japan and support Japanese firms accessing the UK market.

Transparency and simpler access frameworks strengthen trust and underpin sustainable cross-border capital flows – priorities at the heart of our growth and competitiveness mandate.

And they make clear that our countries share a commitment to open, high-standard markets and engagement with international standard setters like the International Organization of Securities Commissions (IOSCO).

Looking ahead

I'd like to recognise and commend the JFSA for its work in positioning Japan as a global asset management hub.

The reforms on corporate governance and asset ownership have led to a high-performing equity market and considerable innovation in recent years, making Japan attractive to domestic and international managers alike.

Moreover, allowing managers of all sizes to delegate their investment decisions will provide them access to the best opportunities worldwide.

These plans are already attracting global attention, and I suspect they will continue to do so.

They are also strongly aligned with the UK's own reform agenda.

As the JFSA builds upon its vision and the FCA works to embed growth and competitiveness into regulation, we find ourselves with an opportunity. To collaborate and strengthen the links between our markets.

How do we ensure that asset management benefits both countries, particularly given the challenges like demographic shifts, limited financial literacy, overexposure of foreign assets, and making savings more productive?

By:

• Working together to facilitate market understanding.
• Deepening regulatory cooperation.
• Aligning policy frameworks.
• Supporting innovation while protecting stability and facilitating capital flows and co-investment.

As the world's second-largest international asset management centre, with £14 trillion AUM, the UK is here to support you as you build your asset management centre.

When we developed our own, we found that a commitment to global standards and an openness to international competition were especially helpful.

We also welcome Japanese capital in infrastructure, sustainable finance and private markets.

And we are eager to continue building upon the transfer of knowledge we're already seeing.

For example, discussions with the JFSA helped shape our approach to creating a crypto regime and stablecoin rulebook.

And the Nippon individual savings account (NISA) was modelled on the UK's individual saving account.

With raised contribution limits, greater tax benefits and simpler procedures, investments have increased by 68% since 2023.

Of course, there are other ways in which we can help each other, especially in terms of sustainable finance.

Working together and adopting international sustainability standards will help us mitigate the unique sustainability challenges and threat of natural disaster we face as island nations.

When the FCA developed a Code of Conduct for sustainability data and ratings providers, we received valuable input from the JFSA and IOSCO to encourage international consistency.

It's exciting to consider what might be possible when we continue learning from each other, even in a time of change.

With this in mind, I would like to extend my sincere thanks to Shigeru Ariizumi for his partnership and guidance as he moves onto his new role.

I look forward to welcoming my new counterpart.

Conclusion

I'd like to leave you with this: investability comes from 2 things.

1. The strength of longstanding global centres like London and Tokyo.
2. A sense of predictability, which empowers customers to make better and more informed decisions.

That is how we will create a ‘virtuous cycle of growth and distribution,' both in Japan and in the UK.

I look forward to deepening our countries' cooperation and having regular exchanges between regulators and industry as we work to make this vision a reality.

Of course, we realise our presence plays a role in this.

We have established our Asia-Pacific office to provide you with greater access to us and our services.

I encourage all of you to engage with us directly.

Let's continue to build our partnership, align our standards, and create shared growth across our markets – together.

Because, like an English oak tree's, our countries' roots are deeply entwined, highly adaptable, and strong enough to withstand the test of time.