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Facilitating Japanese Globalisation through SWIFT

by Helen Sanders, Editor

Japan is in the midst of an economic transformation, as corporations shift from a largely domestic focus to embrace international markets. The global downturn, including recession in Japan, has resulted in depressed domestic demand and increasing price pressure, exacerbated by growing competition from countries such as China. At the same time, huge government debt and Japan’s credit rating downgrade has meant that the cost of borrowing has increased. All these challenges, combined with the effects of the tragic earthquake and tsunami in 2011 have changed the industrial and economic landscape in Japan dramatically. Hans Janssen, Head of Treasury and Securities Services, Japan, J.P. Morgan comments,

“Traditionally, Japanese corporates have enjoyed close relationships with Japanese banks, with a primarily domestic commercial focus. However, challenges within the Japanese economy and broader macroeconomic trends have resulted in many corporates accelerating their overseas expansion.”

Consequently, we see Japanese companies focusing on international markets as a source of growth. As well as bringing new opportunities, trading internationally brings challenges too, not least the difficulty of maintaining visibility and control over cash balances and flows as global banking relationships become more numerous and complex. In this context, leveraging SWIFT as a single channel for bank communication can bring considerable advantage.