Wall Street Week – “Fan Favorite: Japan’s New Horizon”
Host: David Westin/Bloomberg
Aired: April 3, 2026

Overview

In this special episode, David Westin explores the economic evolution of Japan, chronicling its journey from the “lost decades” of stagnation to a resurgence positioned on fundamental reforms, generational shifts, and changing approaches to business and investment. Through conversations with top business leaders including Mark Rowan (Apollo Global Management), Hiromi Yamaji (Japan Exchange Group), Eiji Ueda (Apollo), Maria Solis (Brookings Institution), and CEOs from global Japanese giants like Sony and Panasonic Automotive, listeners are given a comprehensive look at how Japan’s economy, business governance, capital markets, and culture are being transformed for a new era.

Key Themes & Discussions

1. The End of Stagnation: Japan’s Economic Turnaround

• The episode opens by recounting Japan’s boom of the 1980s and ensuing “lost decades” after the asset bubble burst and a slow government/banking response (01:50-03:23).
• Despite decades of deflation, low growth, and lagging markets, leaders argue that Japan is now at an inflection point due to adversity (COVID, global supply chain shocks, Ukraine war) and the return of inflation.

“Most people's expectation of Japan or business mindset of Japan is 30 years of stagnation... that is so dynamic here today.”
—Mark Rowan, Apollo Global Management (03:59, 05:04)

2. Return of Inflation and Behavioral Shifts

• Inflation around 3% has changed risk/reward calculations for businesses and consumers—prompting deployment of savings and a reassessment of asset allocation (04:05-06:14).
• The longstanding Japanese preference for holding cash is breaking down, as both households and corporates seek better returns to keep up with inflation and fund retirement (04:05-05:52).

“With the inflation at close to 3%, cash is not the right asset to own. It’s actually the worst asset to own.”
—Eiji Ueda (05:52)

3. Market and Corporate Reforms: From Abe to Today

• Reform under Prime Minister Abe (2015) kickstarted corporate governance changes, with policies continued by successive prime ministers, culminating in the current administration’s push for even deeper reforms (06:14-08:14).
• Notable changes: Emphasis on increasing profitability, capital efficiency, gender equity (“womenomics”), and board diversity (06:39-07:30).

“We have overused the image of the lost decades... undercurrents of change have repositioned where Japan stands today.”
—Maria Solis, Brookings (06:39)

• Tokyo Stock Exchange CEO Hiromi Yamaji describes market reforms: focus on raising price-to-book ratios, breaking up interlocking shareholdings, and requiring independent directors (08:14-09:43).

“I think a fundamental challenge is to transform the mindset of the management of the companies.”
—Hiromi Yamaji (09:17)

4. Aging Population and Labor Participation

• Japan’s demographics—an aging and shrinking workforce—are forcing action. The country presses for increased labor force participation among women, seniors, and foreign workers, but also faces limits in these areas (11:19-12:51).
• Automation, digitalization, and AI are seen as solutions to the productivity gap (12:51).

“Japanese companies have been making huge investment into automation or digitalization, AI usage. I think those are very important to enhance productivity...”
—Hiromi Yamaji (12:51)

5. The Capital Shift: Moving Money Off the Sidelines

• Traditional Japanese investing focused on bank deposits and JGBs (government bonds). This is rapidly changing as cash is reallocated toward equity, capex, and alternative investments (17:04-19:14).
• By 2024, household cash deposits drop from 55% to 50%, and equity investments rise to 14% (18:12).

“Japanese companies are quite receptive for new development of technologies like AI... at the same time, how do we take advantage of those new technologies...”
—Hiromi Yamaji (18:40)

6. Rise of Private Markets and Alternative Capital

• The Japanese capital market has primarily been bank debt and equity—with limited bond markets and little tradition of private credit. Firms like Apollo offer a “third way” with long-dated, investment-grade private capital (20:02-24:44).
• Supply and demand for alternative financing are projected to increase dramatically due to multi-trillion-dollar capital needs (infrastructure, AI, energy, etc.) (13:47-14:34).

“The equity market... is actually quite small... There's not the well-developed kind of corporate bond market that exists throughout the US... we're watching... corporate CFOs... now understand that there are three types of finance.”
—Mark Rowan (20:20)

“Private credit can play a bigger role in Japan as well.”
—Hiromi Yamaji (23:14)

• Japanese companies/corporates are open to private solutions, especially when accompanied by their trusted banking partners (24:09-24:53).

7. Ongoing Risks and the Global Landscape

• Rowan notes downside risks: Rather than cyclical credit or market risks, he's focused on geopolitics, government deficits, and unpredictable “out of bounds” scenarios (25:02-26:26).

“The chance of an outside-the-sidelines outcome was small and unpredictable... Today I only think 70, 75% of the outcomes are between the two sidelines... we can’t ignore that there is an increased risk of an out-of-the-box, out-of-expected outcome.”
—Mark Rowan (25:02)

8. Corporate Restructuring, Carve Outs, and Discipline

• Reforms are changing Japanese corporate culture. Companies are pressured to increase capital efficiency and justify remaining listed on the stock exchange (30:19-32:36).
• Delistings and spin-offs (carve outs) have increased as companies reconsider business focus and ownership structure.

“The number of delisting used to be only 50 companies... Now last year was 125 companies delisted... companies are scrutinizing whether to keep listing.”
—Hiromi Yamaji (32:09)

• Example: Panasonic sold a majority stake in its automotive unit to Apollo, focusing the business and improving capital efficiency (33:23-34:37).

“Partnering with Apollo we can really 100% commit to automotive sectors field. So this is rather positive for us to really stick to that strategy.”
—Masashi Nagayasu, Panasonic Automotive (34:37)

9. Sony’s Transformation: From Hardware to Content

• Sony has pivoted from consumer electronics to entertainment, with games, music, and films now driving 60%+ of revenues (37:45-40:07).
• This shift required letting go of traditions and pursuing partnerships for long-term, stable capital, such as Apollo's role in buying music catalogs (42:04-43:15).

“...each capital resource has a different risk appetite as well as a different time horizon... as we diversify our business... we can find out the best fit of the capital investment and asset class.”
—Hiroki Totoki, Sony (42:45)

10. Japanese Business and Culture: A Nation in Transition

• The notion of the lifetime “salaryman” is becoming obsolete, as career flexibility, job-hopping, and start-up culture take hold—even among recent graduates (47:16-50:33).

“About one out of three new freshmen to the companies are thinking to leave the company to join the startups... that’s a kind of stereotype, kind of image of Japanese workers.”
—Hiromi Yamaji (49:47)

• Companies like Panasonic Automotive and Sony strive to balance core legacy values with radical market shifts, emphasizing communication and evidence-driven transformation (51:01-53:21).

“Panasonic is almost 110 years history. But Panasonic Automotive has 80 years history... this is our backbone. This won’t change. But otherwise we can change.”
—Masashi Nagayasu (51:14)

“Most important thing is how to persuade with rationale this is the right thing we have to do... sometimes the transformation is very severe, but we have to do.”
—Hiroki Totoki (53:21)

• Culturally, the show challenges the idea that Japanese are inherently risk-averse—arguing that economic environment, not deep-seated conservatism, shaped the “cash is king” era (54:11-55:39).

“I don’t think this is the cultural thing... people basically make a rational decision with the macro environment... If people make a rational decision, economically rational decisions, I think people are open for various ideas...”
—Eiji Ueda (54:56)

Notable Quotes & Memorable Moments

• “What a lovely day in Tokyo.” —Mark Rowan opens his segment with optimism and lightness (03:59)
• “The need for Japan to finance what it needs to finance and the opportunity that Japan has.” —Mark Rowan on the convergence of aging and opportunity (11:53)
• “We are about to spend every dollar since the invention of fire.” —Mark Rowan jokes about the scale of global infrastructure and digital investment needs (13:47)
• “I take it in a very positive way with fewer Panasonic group constraints. So I don’t want to say the freedom, but we really can focus on what we need to do.” —Masashi Nagayasu, on the discipline and focus of working with Apollo vs a conglomerate (36:10)
• “We have to transform the entire Sony, otherwise we can't survive.” —Hiroki Totoki (53:21)
• “There’s nothing like 3% inflation to get people to think differently.” —Mark Rowan (55:39)

Timestamps—Important Segments

• [01:50] – Context: history of Japanese economic rise and stagnation
• [03:59] – Mark Rowan’s first impressions and the sea change in Japan
• [04:05] – Generational and corporate changes in Japan
• [06:14] – Market and governance reforms (Abenomics and beyond)
• [11:19] – The demographic challenge—aging population and labor force
• [13:47] – Massive future capital needs (infrastructure, AI, energy)
• [17:39] – Japanese cash reserves and their movement
• [20:02] – The promise and role of private credit/alternative capital
• [24:53] – Risk assessment—known and “out of bounds” risks
• [30:19] – Corporate governance, boardroom change, and “shame-driven” reform
• [33:23] – Panasonic Automotive carve out case study
• [37:45] – Sony’s portfolio pivot from hardware to entertainment
• [47:16] – Changing workplace culture: The “salaryman” myth and startup surge
• [54:11] – Is Japanese conservatism culture or circumstance?

Conclusion

Japan stands on the cusp of a new economic era. After thirty years of low growth and deflation, the return of inflation—plus hard-earned reforms—is driving deep changes in the nation’s markets, business practice, and even culture. Firms like Apollo are at the forefront of deploying patient, long-dated capital, while Japanese corporates are rethinking everything from listing status to global partnerships and digital transformation. The old stereotypes of stagnation and risk aversion are rapidly being overturned by a dynamic, pragmatic, and forward-thinking Japan—a nation now viewed as a model for advanced economies confronting demographic, financial, and technological disruption.

Useful for anyone wanting to understand Japan’s modern economic transformation, its challenges, and the multi-layered cultural and corporate shifts now underway.