Japan's Financial Services Agency is targeting legislative changes as soon as 2027 to increase lending to startups, according to a report by Nikkei Asia. This move comes as seed-stage startup funding in Japan has declined by 40%, reflecting growing investor selectivity.

Japanese financial authorities plan to relax legal requirements for nontraditional lenders to help startups raise capital more easily. The initiative is part of broader efforts to support innovation and startup growth in Tokyo and across Japan.

The funding downturn highlights challenges faced by early-stage companies in securing investment, prompting government intervention to stimulate the startup ecosystem.

Sources