(Bloomberg) -- Prime Minister Fumio Kishida set out plans to attract more asset managers to Japan that include increased services in English and cuts to red tape, even as Tokyo slipped out of the top 20 in a ranking of the world’s top financial centers. 

In a speech in New York, Kishida said funds under management in the country had ballooned by 50% over the past three years to about ¥800 trillion ($5.4 trillion). The government will aim to sweep away “unique business practices” and other barriers to entry, to encourage “sophisticated asset management,” he said.  

Tokyo has long sought to revive its status as one of the world’s most important financial centers. While Japan boasts more than ¥2,000 trillion in personal financial assets, its capital tumbled to 21st place in the Global Financial Centres Index published in March, compared with 16th place in Sept. 2022 and third place in 2020. 

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High tax rates have been cited as one deterrent to efforts to expand the financial sector, even after the government reduced some levies. 

Kishida said the government would set up special business zones for asset managers, where administrative procedures could be carried out in English. He announced the formation of an asset management forum consisting of US and Japanese institutions, to ensure planned reforms meet their needs. Japan will ease regulations to allow asset management firms to outsource back office operations, he said. 

He also pledged to press ahead with corporate governance reforms, encouraging management of Japanese companies to improve their valuations. Almost half of Tokyo Stock Exchange-listed companies were trading with a price-to-book ratio of less than one earlier this year, prompting investors and the bourse itself to push them for action to improve share prices. 

While inflation has focused more attention on investment, Japanese households keep an average 54.2% of their assets in cash and deposits, compared with 12.6% in the US and 35.5% in the Euro area, according to a report published by the Bank of Japan in August. 

--With assistance from Nao Sano, Yuki Hagiwara and Russell Ward.

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