Nomura's dominance myth has been cracked open! Mizuho (MFG.US) is redrawing Japan's underwriting landscape with global IPOs.

Mizuho Financial Group Inc Sponsored ADR (MFG.US) is gaining a foothold in Japan's equity capital markets through a unique and lucrative niche: capturing robust U.S. demand for artificial intelligence (AI) financing while connecting with Japan's massive pool of household savings. Anthropic's listing project is another blockbuster deal for which Mizuho recently secured a lead underwriting role, with the company planning to raise up to US$3.5 billion from Japanese investors. The deal confirms that Mizuho can leverage the results of its U.S. business to compete in a market traditionally dominated by Nomura Holdings, Inc. Sponsored ADR (NMR.US) and where domestic IPOs have continued to languish. The company developing the Claude chatbot Siasun Robot&Automation is another large-scale financing project landing in the Japanese market after SpaceX (SPCX.US). What attracts them is Japan's cash-rich individual investors and a relatively streamlined offering mechanism. Bank of Japan data shows that Japanese household financial assets total approximately 2,400 trillion yen (equivalent to US$15 trillion), nearly half of which is held in cash and deposits. For over a decade, Mizuho has been steadily increasing its U.S. market presence, aiming to join the ranks of Asia's top investment banks. The fruits of its long-term investment have earned it these IPO underwriting mandates, giving it an edge over domestic rivals such as Nomura, the long-standing champion of Japanese equity underwriting. Compiled data shows that Mizuho ranks 18th in this year's global equity and equity-linked securities underwriting league table, the highest among Japanese banks; Nomura ranks 21st. Although Nomura still holds more than a quarter of Japan's shrinking IPO market, overseas business advantages are increasingly becoming the core pillar of Mizuho's strategy. Overseas expansion has brought it closer to global issuers, while its domestic banking network gives it strong in-country distribution capabilitiesthe combination creates formidable competitiveness in global underwriting deals. Industry research analyst Michael Makdad said: "There is potential for a strong virtuous cycle here: winning top-tier global IPOs can help Mizuho attract Japanese individual clients; and demonstrating to overseas issuers the subscription capacity of Japanese retail funds can help it compete for underwriting mandates on subsequent global IPOs." Such overseas offering projects have become a key pillar of Japan's IPO marketdomestic IPO volumes are at a 13-year low. Data shows that the Japanese portion of Anthropic's offering alone will be the largest offering in Japan since SoftBank's (SFTBY.US) listing in 2018. Japan's third-largest bank previously participated in the SpaceX project, which raised US$2.2 billion from Japanese individual investors; it also underwrote the Japanese allocation portion of PayPay (PAYP.US), backed by SoftBank Group, which was the largest U.S. exchange listing by a Japanese company in a decade. All these deals used the POWL (Public Offering Without Listing) structure: overseas issuers can directly sell shares to Japanese retail investors alongside an overseas IPO without listing on the Tokyo Stock Exchange. Toyoki Samejima, an analyst at SBI Securities in Tokyo, said: "Mizuho's growing influence in the U.S. investment banking market has helped it win these global projects. The POWL mechanism benefits Mizuho by expanding its client base and opening up more business opportunities." A Mizuho spokesperson declined to comment. A Nomura spokesperson said that since 2001, Nomura has completed more than 30 POWL transactions, accumulating mature experience in retail distribution and deal review; the bank will continue to evaluate project opportunities on a case-by-case basis, prioritizing investor protection and adequate disclosure. Under CEO Masahiro Kihara, Mizuho has accelerated its international expansion, marked by the acquisition of boutique M&A investment bank Greenhill & Co. When Arm (ARM.US) listed in 2023, Mizuho was also among the four core underwriters, partly thanks to its decades-long relationship with SoftBank Group. However, past POWL offerings have not delivered impressive returns to investors. PayPay's share price has fallen below its US$16 IPO price since listing in March this year; SpaceX's share price also briefly broke below its offering price and has since fluctuated around it. Even so, Japanese investors' scarcity of new stock targets and enthusiasm for AI concepts give them formidable purchasing power in large financing deals. Makdad noted that Mizuho has already used the SpaceX project to demonstrate to the outside world the subscription potential of Japanese funds, laying the groundwork for attracting more overseas projects to Japan. "Japanese retail money could become an increasingly important source of funding for global equity offerings," he said. "Japan will be better suited than in the past to host top-tier global listings." Mitsubishi UFJ Financial Group, Inc. Sponsored ADR (MUFG.US) is also one of the underwriters for the Anthropic project. Mizuho Securities is coordinating the Japanese portion of the offering, with Goldman Sachs Group, Inc. (GS.US), Mitsubishi UFJ Morgan Stanley Securities, Morgan Stanley MUFG Securities, Rakuten Securities, SBI Securities and other institutions jointly taking investor orders.