Finance tech jobs in Japan have been steadily moving to other parts of Asia for some time, and now it seems Tokyo is losing out to Hong Kong and Singapore in more sectors than ever before.
“IT is the hardest hit, but other areas are also suffering.
The flow of financial services jobs from Tokyo to Hong Kong and Singapore is affecting a wide range of functions from front office to back office,” says Bruce Lepore, country manager of T2 Tokyo.
Lepore says some trading desks for equities and equity derivatives and other Japan-specific products are being relocated. The off-shoring of significant portions of trade processing and other operational groups, which started prior to the financial crisis, is also continuing.
“In general, Japan is considered a very high-cost location to employ people, and anything that can be handled effectively from an off-shore location, without upsetting the regulators, will be hired elsewhere – and the current exchange rate is not helping matters,” adds Lepore.
Martin Eastgate, a senior consultant at CDS, has seen firms primarily relocating middle and back-office roles to Hong Kong and Singapore.
“Earlier this summer a major real estate asset manager began to build up its Singapore operation with financial reporting staff, with some of the roles requiring Japanese language skills. Another international real estate investor decided to base a Japanese-speaking fund manager in their Singapore operation to cover their Japan specific fund,” he says.
Eastgate has also seen front-office hires with a specific Japan focus getting based in Singapore and Hong Kong. One firm formed by former Japanese bankers, he says, has established its platform in Singapore, basing the investment committee there whilst retaining a local deal team in Japan to cover real estate and distressed-related transactions.
“Hedge fund managers and distressed investors have also taken the option of hiring Japan specialists and basing them within the regional headquarters to cover Japan remotely,” says Eastgate.
But relocation isn’t just to Singapore and Hong Kong; some roles are going to Australia.
Eastgate points to one major investment manager which has decided to centralise its regional finance team in Sydney and has hired Japanese finance managers to relocate. Although that’s nothing new.
“Three years ago, we were asked by a European bank to introduce Japanese and Japanese-speaking candidates to join the back office and operations staff in Sydney to support the revenue teams in Tokyo,” says Eastgate.
Not everything, however, is gloomy. Sales and distribution roles, as well as client-services functions, seem to be staying put in Japan. In some cases they are even growing.
“These roles require Japanese language and local relationships and can’t really be handled remotely. For tech and operational positions, roles that require significant, daily interaction with the business will remain here in Japan for obvious reasons,” explains Lepore.