Japan Records the Lowest Number of IPOs in 15 Years

Japan's initial public offering (IPO) market has posted its weakest first half of the year in 15 years. According to Dealogic data, only 18 companies went public during the first six months of the year, marking the lowest figure since 2011 and well below the long-term average of 35 IPOs annually. Total proceeds from new listings reached just $917 million, the lowest amount recorded since 2022.

The slowdown has come despite the strong performance of Japan's stock market. The Nikkei 225 index has gained roughly one-third this year, yet the rally has failed to encourage more companies to go public. The largest IPO so far was the listing of ride-hailing app Go, which raised 89 billion yen (approximately $550 million).

According to investment bankers and market advisers, a rapid recovery is unlikely. Japan currently lacks a strong pipeline of young companies operating in high-growth sectors such as artificial intelligence, data centers, and semiconductors—industries that could take advantage of today's elevated market valuations. At the same time, investors remain cautious toward IPOs from more traditional sectors, while heightened market volatility, partly driven by geopolitical tensions including the conflict involving Iran, has prompted many businesses to postpone their listing plans.

Analysts at Bank of America and Goldman Sachs expect market activity to improve gradually toward the end of the year and continue strengthening in 2026. They believe the recovery will be supported primarily by companies backed by private equity funds, alongside a gradual return of growth-oriented businesses to the public markets.

Japan's strict listing requirements also continue to weigh on IPO activity. Most companies are required to provide two years of audited financial statements before going public, while startups must present at least one year of audited results. These rules are more demanding than those in many other major financial markets and are designed to protect Japan's large base of retail investors.

Despite the current slowdown, investment bankers believe Japan's IPO market is becoming increasingly attractive to international investors. The successful listing of Go highlighted this trend, with foreign investors purchasing around 70% of the offering, well above the average seen in recent years.