Hostname: page-component-6b989bf9dc-cvxtj Total loading time: 0 Render date: 2024-04-14T08:34:14.496Z Has data issue: false hasContentIssue false

Tokyo's booms and busts: Placing Japan in the global financial network

Published online by Cambridge University Press:  09 November 2023

Liam Keenan*
University of Nottingham UK
Dariusz Wójcik
University of Oxford UK
Corresponding author: Liam Keenan, Faculty of Social Sciences, University of Nottingham, Sir Clive Granger Building, Nottingham, NG7 2RD, UK. Email:
Rights & Permissions [Opens in a new window]


Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

Tokyo is conspicuous for its now decades-long absence in the headlines of global financial news. In this article, we revisit the evolution of Tokyo as an international financial centre through the lens of Global Financial Networks (GFN). Drawing on insights from high-level interviews, we present a chronology of Japan's financial history between 1980 and 2020. This reveals a pattern wherein financial sector reforms and financial centre initiatives are repeatedly interrupted by crises. The GFN framework helps to demonstrate how structure and agency intertwine at the global, national, and local scales to shape this reform-boosterismcrisis cycle. Nationally and locally, we find that despite repeated attempts by coalitions of actors to elevate the status of Tokyo, engrained cultural and political economic conditions have hindered its development into a truly global financial centre. Globally, these conditions have been structured and amplified by Japan's historical position as a rule-taker in the governance of international finance. These factors have conspired to situate Japan on the periphery of the GFN, a position aggravated by the rising financial power of China.

Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (, which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
© 2022 The Author(s)


Alvesson, M. (2003) Beyond neopositivists, romantics, and localists: A reflexive approach to interviews in organizational research. Academy of Management Review, 28(1): 1333.10.5465/amr.2003.8925191CrossRefGoogle Scholar
Cassis, Y. (2018) Introduction. In: Cassis, Y. and Wójcik, D (eds.) International Financial Centres after the Global Financial Crisis and Brexit. Oxford: Oxford University Press, 115.10.1093/oso/9780198817314.001.0001CrossRefGoogle Scholar
Centre for Strategic and International Studies. (2021) Resolved: Tokyo can become the next financial hub in Asia. Center for Strategic and International Studies [Online], 27 May. Available at: <>. Accessed 30 March 2022..+Accessed+30+March+2022.>Google Scholar
Choi, D., Seade, J., Shirai, S. and Young, S. (2009) Competition among financial centres in Asia-Pacific: Prospects, benefits, risks and policy challenges. In: Young, S., Choi, D., Seade, J. and Shirai, S (eds.) Competition among Financial Centres in Asia-Pacific. Singapore: ISEAS Publishing, 360.Google Scholar
Christophers, B. (2014) Geographies of finance I: Historical geographies of the crisis-ridden present. Progress in Human Geography, 38(2): 285–93.10.1177/0309132513479091CrossRefGoogle Scholar
Coe, N., Lai, K. and Wójcik, D. (2014) Integrating finance into global production networks. Regional Studies, 48(5): 761–77.10.1080/00343404.2014.886772CrossRefGoogle Scholar
Dolan, R. and Worden, R. (1994) Japan: A Country Study. Washington DC: GPO for the Library of Congress.Google Scholar
Dore, R. (2000) Stock Market Capitalism: Welfare Capitalism. Oxford: Oxford University Press.10.1093/acprof:oso/9780199240623.001.0001CrossRefGoogle Scholar
Fohlin, C. (2016) A brief history of investment banking from medieval times to the present. In: Cassis, Y., Grossman, R. and Schenk, C (eds.) The Oxford Handbook of Banking and Financial History. Oxford: Oxford University Press, 133–62.Google Scholar
Fujita, K. (2003) Neo-industrial Tokyo: Urban development and globalisation in Japan's state-centred developmental capitalism. Urban Studies, 40(2): 249–81.10.1080/00420980220080271CrossRefGoogle Scholar
Gehrig, T. (2000) Cities and geography of financial centres. In: Huriot, J., Thisse, J (eds.) Economics of Cities: Theoretical Perspectives. Cambridge: Cambridge University Press, 415–46.Google Scholar
Grote, M. H. (2008) Foreign banks’ attraction to the financial centre Frankfurt: An inverted ‘U’ -shaped relationship. Journal of Economic Geography, 8(2): 239–58.Google Scholar
Hall, S. (2018) Regulating the geographies of market making: Offshore Renminbi markets in London's international financial district. Economic Geography, 94(3): 259–78.10.1080/00130095.2017.1304806CrossRefGoogle Scholar
Han, J. N. (2012) Conserving the heritage of shame: War remembrance and war-related sites in contemporary Japan. Journal of Contemporary Asia, 42(3): 493513.10.1080/00472336.2012.687634CrossRefGoogle Scholar
Haberly, D., MacDonald-Korth, D., Urban, M. and Wójcik, D. (2019) Asset management as a digital platform industry: A global financial network perspective. Geoforum, 106: 167–81.CrossRefGoogle Scholar
Haberly, D. and Wójcik, D. (2022) Sticky Power: Global Financial Networks in the World Economy. Oxford: Oxford University Press.10.1093/oso/9780198870982.001.0001CrossRefGoogle Scholar
Higgins, H. (2004) Corporate governance in Japan: Role of banks, Keiretsus and Japanese traditions. In: Gul, F. and Tsui, J (eds.) The Governance of East Asian Corporations. London: Palgrave Macmillan, 96116.10.1057/9780230523272_5CrossRefGoogle Scholar
Hattori, S. (2020) Financialization in Japan. Evolutionary and Institutional Economics Review, 17(2): 295311.10.1007/s40844-020-00159-0CrossRefGoogle Scholar
Jackson, G. and Moerke, A. (2005) Continuity and Change in corporate governance: Comparing Germany and Japan. Corporate Governance, 13(3): 351–61.Google Scholar
Kageyama, Y. (2021) Japanese economy sees recovery from pandemic slump. AP News [Online], 15 February. Available at: <>. Accessed 10 April 2021..+Accessed+10+April+2021.>Google Scholar
Kushida, K. and Shimizu, K. (2013) Syncretism: The politics of Japan's financial reforms. Socio-Economic Review, 11(2): 337–69.10.1093/ser/mwt003CrossRefGoogle Scholar
Lai, K. (2018) Agency, power, and state-firm relations in global financial networks. Dialogues in Human Geography, 8(3): 285–88.CrossRefGoogle Scholar
Lai, K. (2012) Differentiated markets: Shanghai, Beijing and Hong Kong in China's financial centre network. Urban Studies, 49(6): 1275–96.CrossRefGoogle Scholar
Lavery, S., McDaniel, S. and Schmid, D. (2019) Finance fragmented? Frankfurt and Paris as European financial centres after Brexit. Journal of European Public Policy, 26(10): 1502–20.10.1080/13501763.2018.1534876CrossRefGoogle Scholar
Lu, C. (2008) Shame, guilt and reconciliation after war. European Journal of Social Theory, 11(3): 367–83.10.1177/1368431008092568CrossRefGoogle Scholar
McCann, P. (2001) Urban and Regional Economics. Oxford: Oxford University Press.Google Scholar
McKay, H. (2014) Tokyo's ultimately failed bid for first tier international financial center status: Why did it fall short and what are the lessons for Shanghai? In: Woo, W., Pan, Y., Sachs, J. and Qian, J (eds.) Financial Systems at the Crossroads. London: Imperial College Press, 187226.10.1142/9789814566896_0006CrossRefGoogle Scholar
Pan, F., Yang, C., Wang, H. and Wójcik, D. (2020) Linking global financial networks with regional development: A case study of Linyi, China. Regional Studies, 54(2): 187–97.CrossRefGoogle Scholar
Peck, J. and Theodore, N. (2007) Variegated capitalism. Progress in Human Geography, 31(6): 731–72.10.1177/0309132507083505CrossRefGoogle Scholar
Port, T., Abdelal, R., Alfaro, L. and Schlefer, J. (2012) Crisis and reform in Japan's banking system. Harvard Business School Working Paper, 9-710-037.Google Scholar
Qu, S. G. and Dumay, J. (2011) The qualitative research interview. Qualitative Research in Accounting and Management, 8(3): 238–64.CrossRefGoogle Scholar
Sheard, P. (2009) Japan and the global financial crisis. Global Asia [Online], March. Available at: <>. Accessed 11 April 2021..+Accessed+11+April+2021.>Google Scholar
Shiller, R., Kon-Ya, F. and Tsutsui, Y. (2013) Why did the Nikkei crash? Expanding the scope of expectations data collection. In: Ikeda, S., Kato, H., Ohtkae, F and Tsutsui, Y (eds.) Behavioural Interactions, Markets, and Economic Dynamics. Tokyo: Springer, 335–56.Google Scholar
Shirai, S. (2017) Tokyo as a leading global financial center: The vision under the spotlight again. Asian Development Bank Institute Working Paper, 758.Google Scholar
Stone, D and Ziemba, W. (1993) Land and stock prices in Japan. Journal of Economic Perspectives, 7(3): 149–65.CrossRefGoogle Scholar
Takeno, Y. and Hiromot, F. (2021) The asset management review: Japan. The Law Reviews [Online], 27 September. Available at: <>. Accessed 31 March 2022..+Accessed+31+March+2022.>Google Scholar
Tett, G. (2004) Saving the Sun. London: Random House.Google Scholar
Thorsten, M. (2004) Shame to vengeance: The grande cliché of the Japanese superstate. Alternatives: Global, Local, Political, 29(2): 219–38.CrossRefGoogle Scholar
Töpfer, L. M. (2018) China's integration into the global financial system: Toward a state-led conception of global financial networks. Dialogues in Human Geography, 8(3): 251–71.10.1177/2043820618797460CrossRefGoogle Scholar
Tsukamoto, T. (2012) Neoliberalization of the development state: Tokyo's bottom-up politics and state rescaling in Japan. International Journal of Urban and Regional Research, 36(1): 7189.CrossRefGoogle Scholar
Wójcik, D. (2018a) Rethinking global financial networks: China, politics and complexity. Dialogues in Human Geography, 8(3): 272–75.CrossRefGoogle Scholar
Wójcik, D. (2018b) The global financial networks. In Clark, G., Feldman, M. P., Gertler, M. S. and Wójcik, D. (eds.) The New Oxford Handbook of Economic Geography. Oxford: Oxford University Press, 557–74.Google Scholar
Wójcik, D., Pažitka, V., Knight, E and O'Neill, P. (2019) Investment banking centres since the global financial crisis: New typology, ranking and trends. Environment and Planning A: Economy and Space, 51(3): 687704.10.1177/0308518X18797702CrossRefGoogle Scholar
World Bank. (2021) GDP (current US$). World Bank [Online]. Available at: <>. Accessed 29 September 2021..+Accessed+29+September+2021.>Google Scholar
Z/YEN. (2022) Global financial centres index. Z/YEN [Online]. Available at: <>. Accessed 29 March 2022..+Accessed+29+March+2022.>Google Scholar