EquitiesFirst Financing Could Help Japanese Firms Unlock Capital in a High-Rate Era

"Japanese executives are sitting on a potential liquidity source worth hundreds of billions of dollars at precisely the moment when traditional financing channels are tightening. One study found that direct ownership in listed firms averages approximately 4% across the market, which would represent substantial total equity in companies capitalized at a total of $6.3 trillion as of February 2025. Yet these shareholdings remain largely locked up, even as borrowing costs climb and export revenues weaken."

""We're seeing a fundamental repricing of capital access in Japan," said Al Christy Jr., founder and CEO of EquitiesFirst, an alternative financing firm that specializes in equities-backed financing. "The transitions from deflation to inflation, from negative rates to positive rates-these can force a complete reassessment of corporate finance strategies." The Bank of Japan's policy normalization, combined with mounting trade pressures, has created conditions where alternative financing structures may gain traction."

Executives in Japan collectively hold roughly 4% direct ownership in listed firms, representing substantial equity across a market capitalized at $6.3 trillion as of February 2025. Those shareholdings remain largely immobilized even as borrowing costs rise and export revenues weaken. The Bank of Japan has normalized policy, raising the benchmark to 0.5% with potential further increases, increasing debt servicing and refinancing pressures. Bank lending has become more conservative, especially for small and mid-sized firms. Alternative financing structures, including equity-secured lending, may gain relevance as traditional credit channels tighten and capital access is repriced.

Read at Business Matters