Tokyo, Luxembourg sign financial cooperation MoU

FinCity.Tokyo, Japan’s financial innovation hub, and Luxembourg for Finance, Luxembourg’s financial centre development agency, have signed a memorandum of understanding ( MoU) aimed at strengthening cooperation between the two international financial centres.

The agreement was signed on April 27  by Hiroshi Nakaso, chairman of FinCity.Tokyo, and Tom Théobald, chief executive of Luxembourg for Finance.

The MoU establishes a framework for collaboration in financial promotion activities, including joint events, bilateral visits and knowledge-sharing initiatives. The signing comes ahead of 2027, which will mark 100 years of diplomatic relations between Japan and Luxembourg.

The two organisations said the partnership comes amid geopolitical uncertainty, rising capital needs linked to decarbonisation and accelerating digital transformation across financial services.

The countries highlighted the complementary strengths of their financial sectors. Tokyo is home to a large concentration of financial institutions, technology companies, venture capital firms and startups, while Luxembourg is a major hub for cross-border fund distribution, banking and sustainable investment in Europe.

The cooperation will focus in part on mobilising private capital for the net-zero transition. Transition finance, carbon credits and support for emerging asset managers were identified as areas for potential collaboration.

Nakaso commented: “I see three areas for collaboration. One is inviting more emerging asset managers from Luxembourg, which has a great deal of expertise in fund management. Secondly, I think we can learn a lot from each other in the area of decarbonisation. As shown by the disruption in the Middle East, humanity is still very much dependent on fossil fuels, and climate change must be addressed. Thirdly, Luxembourg has a strong pool of talent, sophisticated financial institutions, and service providers that we can introduce into the Japanese financial system to elevate Tokyo’s global role as a finance hub.”

Théobald commented: “There is real added value in sharing best practices and identifying concrete areas such as carbon credits and support for emerging fund managers that we can work on jointly. On the green finance side, Luxembourg has about a 40 percent market share of ESG funds in Europe. On the stock exchange side, in particular the Luxembourg Green Exchange, we have a 44 percent market share globally for sustainable and green securities. So we see a lot of opportunity in leveraging the platform we have in Luxembourg to mobilise global capital to finance projects across the globe, including in Japan.”