MUFG’s Risk-Sharing Push Reflects a Bigger Shift in How Japan Plans to Finance the Buyout Boom

MUFG Bank chief executive Masakazu Osawa told Reuters that the bank wants to diversify funding sources for large corporate transactions, including leveraged buyouts, rather than carry the full risk itself. He said the bank increasingly needs to structure the whole deal, including equity finance, if it wants to win mandates, and identified life insurers, non-life insurers, government entities and private credit funds as potential partners. That is a meaningful departure from a model in which relationship banks mainly underwrote large loans on their own books.

The change is being driven by the scale of Japanese dealmaking. Reuters said M&A activity involving Japanese companies more than doubled in 2025 to a record 53 trillion yen, showing that corporate appetite for strategic transactions remains strong even with conflict in the Middle East disrupting trade and energy markets. In that environment, MUFG’s message is that banks still want to support major acquisitions, but they no longer see it as prudent or competitive to do so only through traditional balance-sheet lending. Risk-sharing is becoming part of the product.

What makes the story broader than one bank’s strategy is that Japanese policymakers are also trying to develop private credit as a new funding pillar. Reuters reported last week that Japan’s Financial Services Agency views private credit as part of its evolving strategy to meet rising corporate financing needs, with a senior official describing the domestic market as underdeveloped and in need of cultivation. That policy stance matters because it gives institutional backing to the kind of financing partnerships MUFG is now openly seeking, especially in an economy where companies are under pressure to deploy cash, restructure portfolios and pursue more ambitious acquisitions.

At the same time, the shift is happening under a more complicated risk backdrop. The Bank of Japan said in its April 2026 Financial System Report that heightened Middle East tensions have already pushed up oil prices and increased volatility, while also warning that Japan’s financial system is becoming more interconnected with foreign non-bank financial intermediaries and private funds. The report said Japanese banks have increased lending to foreign investment funds with unique risk characteristics and that continued attention is warranted as shocks from global markets or private funds could spread more easily. That means MUFG’s strategy sits at the intersection of opportunity and caution: Japan wants a deeper private-credit market to finance growth, but it also knows that relying more on non-bank partners can create new channels of financial contagion if conditions deteriorate.