A CONTACT WHOM Euromoney has known for years offers sage advice about his fellow bankers. "This visit will be a good test of your relationships," he says as he looks out of his office window at Tokyo on a late July evening. "The ones who tell you everything is fine are lying to you."
With its famous neon lights dimmed to save power and its restaurants half-full, Japan’s capital has the hushed and frazzled atmosphere of a recent disaster survivor beginning to look to the future. The country’s companies are coming out of immediate disaster-recovery mode, piecing together their supply chains again and – in the more forward-looking cases – thinking about the ways in which the March earthquake, tsunami and subsequent nuclear scare exposed their reliance on the domestic market.
For the financial institutions that cater to these companies’ capital-raising and acquisition needs, the first half of the year has been understandably tough. Dealogic data for the first half of 2011 show core investment banking revenues in Japan at $1.3 billion, down 32% from the $1.9 billion they made in the first half of 2010. That is a punishing decline in revenues for any industry.