Banks Race to Retain Deposits as Savers Fuel Japan 225 Record Highs

Japanese banks are racing to secure deposits as retail savers shift cash into equities amid record highs for the Japan 225 and an AI-driven investment boom. The expansion of tax-free NISA accounts, which doubled to ¥71 trillion by end-2025, combined with inflation and BoJ rate hikes, has pulled household money into stocks. Banks face a loans-to-deposits ratio of 65.7% at end-September 2025 and are responding with integrated services such as SMFG’s Olive and MUFG’s Emut, dollar bond issuance by Mizuho, and a pivot toward transaction banking and fee income to sustain lending growth.