Vanderbilt Journal of Transnational Law


Mitsuru Misawa

First Page



The internationalization of the Japanese capital market began in 1955, but for a considerable length of time the market served only as a source of foreign capital needed to cover the deficits in the nation's balance of payments. It was not until after 1970, when the Japanese balance of payments showed a steady surplus, that the Japanese market could accommodate the issue and acquisition of foreign securities on a full-fledged scale, and that Tokyo could become a truly international capital market. This trend, however, proved to be short-lived, for the steep rise in the cost of oil imports has recently forced the Japanese Government to revert to its pre-1970 policy, and take measures to reduce the deficits in the nation's long-term capital payments balance.

It is now a subject of debate in the international business world whether the Tokyo capital market will ever reemerge as an international capital market. This article attempts to evaluate whether and in what form the Tokyo capital market can be expected to regain its former place in international finance. To evaluate this prospect, one must examine Japan's economy and international balance of payments position, as well as Tokyo's development as an international market and the relevant laws and regulations governing the operation of this market.