Gaia Series 111: Options to become a shareholder

A shift in investment culture is underway in Japan, where shareholding is taking root among regular citizens.

For years, Japan’s stock market struggled to inspire retail enthusiasm. But as inflation bites, wages stall and savings erode, a new generation is rethinking how they grow wealth, and who they grow it with.

In early August, more than 10,000 people packed into Tokyo Big Sight for an investment expo. Among the flashier booths promoting foreign exchange trading, real estate and precious metals, one corner quietly drew the longest queues: a free consultation desk for NISA, Japan’s revamped tax-free investment scheme.

“I haven’t started NISA yet,” said one attendee. “But I want to try, since people around me have.”

NISA, or Nippon Individual Savings Account, exempts profits from investment tax. Under new rules introduced in 2024, individuals can invest up to 3.6 million yen (S$33,000) annually with no time limit on their holdings. As inflation rises and interest rates stay low, the response has been swift. Account numbers have surged, particularly among younger working adults.

“With just savings, I don’t think you can beat today’s soaring prices,” said a mother juggling work and childcare. “Investment is necessary.”

Motonobu Matsuo, Vice Chairman of the Japan Securities Dealers Association, called it a perfect storm. “The new NISA, together with inflation, an ageing and shrinking population, and strong corporate earnings; these four factors have coincided,” he said. “For decades, ‘from savings to investment’ had not moved, but suddenly it surged.”

The shift is being noticed in the markets. In August, the Nikkei index reached new record highs, climbing past the 43,000-yen mark. Yet amid this momentum, questions linger: what kind of investor will Japan produce, and what kind of companies will welcome them?

One view comes from Kazushige Okuno, Chief Investment Officer of Obune, an equity fund run by Norinchukin Value Investments. Known for a meticulous, Buffett-style approach, he holds only 28 stocks in the fund’s portfolio, each chosen for long-term strength and not short-term gains.

“If a business isn’t strong, no matter how cheap it is, we won’t hold it,” Okuno told a seminar of individual investors. “We monitor constantly, year by year. That’s our perspective as long-term investors.”

He recently paid a visit to Ajinomoto, one of Obune’s holdings. Meeting the company’s president at its Tokyo headquarters, Okuno raised concerns about its frozen food division. “Their frozen dumplings are really tasty,” he said. “I thought they must be hugely profitable.” President Shigeo Nakamura replied candidly: “The margins are low.” But he pointed to the company’s strength in science and nutrition. “AI lets us properly assess nutritional value. If we communicate this well, it could be a strategy. It’s something only Ajinomoto can pursue.”

This kind of access, and dialogue, reflects a broader shift in corporate transparency. Okuno also travelled to Brazil to meet executives at John Deere, a company his fund has held for over 10 years. Their share price has grown sevenfold. At a global investor briefing, Okuno was the only Japanese participant, asking sharp questions on labour costs and automation. Deere’s CFO, Joshua Jepsen, said food security, shifting diets and the need for skilled labour were global challenges their technology aims to solve.

“I want investors to feel a stronger sense of ownership,” Okuno said. “That’s what keeps us going.”

If Obune represents the methodical, institutional path to wealth, entrepreneur Yusaku Maezawa is building a highway for the masses. The flamboyant founder of fashion platform ZOZO, and one-time space tourist, launched a new company last year called KABU & PEACE. Its hook? Give away shares, not loyalty points, to users of everyday services.

“I want to lower the barrier to the daunting world of stock investment,” Maezawa said.

“Everyone should become shareholders and join this capitalist society.”

KABU provides services such as electricity, internet and mobile phone plans. Instead of loyalty points, users earn vouchers that can be exchanged for unlisted shares in the company. Within months, KABU issued 400 million shares to more than 690,000 people — becoming Japan’s ninth-largest firm by shareholder count.

Among the new shareholders was Yosuke Michikawa, a 43-year-old doctor in Yokohama. “The service feels much the same as points,” he said. “It’s just whether you use them as shares or points.”

Sho Kurasawa, a 35-year-old delivery driver in Chiba, said it changed his life. “I was shocked that they said, ‘We’ll give shares away.’ I’ve started studying investing. I never used to read books. Now I watch economics videos. I actually find it interesting.”
More than half of KABU’s shareholders were first-time investors.

“Of course, I’m the founder. I hold the largest stake,” Maezawa acknowledged. “But the more supporters we have, the more I want to dilute my share. Then it will be everyone’s company. A true public institution.”

One public company that has taken a dramatically different route is ASICS. The Kobe-based sportswear brand has spent the last three years reinventing its shareholder base and management style. Under CFO Koji Hayashi, ASICS has divested its long-standing cross-shareholdings, a common but opaque practice in Japan, and turned instead to individual and overseas investors.

“We call them Kabrunner,” Hayashi said with a grin. “Fans who love ASICS shoes will also buy ASICS shares.”

The company now holds events nationwide where individual investors and curious members of the public can try on shoes, scan their foot shape, and hear directly from the chairman and CEO. Since 2022, sales have hit record highs, with shares rising sixfold. More than 50 per cent of shareholders are now overseas.

Hayashi, who meets investors over 400 times a year, coined a new slogan to tackle one of their biggest concerns: inventory. At a warehouse in Sydney, he rallied staff around the goal of “Excess Zaiko Zero” — no excess stock. “That’s the action we need to do,” he told them, urging tighter control to protect brand value.

On August 13, when ASICS released its interim results, the share price hit an annual peak. Its market capitalisation crossed the three trillion yen mark for the first time. “It’s a real milestone,” said chairman Yasuhito Hirota. “When I became president, we were barely at 300 billion yen. Now it’s gone tenfold. We must keep showing our growth strategy.”

Whether it’s Okuno’s focus on fundamentals, Maezawa’s mission to democratise investing, or Hayashi’s brand-first management, one message is becoming clear: in Japan, shareholding is no longer reserved for the elite. From boardrooms to backstreets, more people are asking what it means to own a piece of the future — and how to make it grow.