Saudi wealth fund plans to more than double investments in Japan

[SAUDI ARABIA] Saudi Arabia’s sovereign wealth fund is looking to increase its investments in Japan to about US$27 billion by the end of 2030.

This is as the kingdom looks to deepen ties in Asia and expand in areas from critical minerals to financial markets. 

The Public Investment Fund (PIF) aims to deploy more capital after investing US$11.5 billion in Japan from 2019 to 2024, Governor Yasir Al Rumayyan said at the FII Priority Asia Summit in Tokyo on Monday (Dec 1).

He highlighted the spending in public and private markets and predicted that the recently-launched exchange-traded funds (ETFs) between Saudi Arabia and Japan will “go further”.

“Asia is big for us. We want to have better ties, better relationships, better procurement process, access to the supply chain,” Al Rumayyan said. “Japan at some stage was one of the largest partners for Saudi Arabia, and we want to get that back.”

Japan is Saudi Arabia’s third-largest trading partner at present.

The sovereign wealth fund expects its investments in the country to contribute as much as US$16.6 billion to Saudi Arabia’s gross domestic product, Al Rumayyan said.

He also hopes to see more return investment to the kingdom in areas including travel and tourism. 

These sectors are among six areas of priority for the US$1 trillion PIF under its 2026 to 2030 investment strategy, which is set to be unveiled early next year.

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The board has approved the plan and will be hammering out its details over the next few days at a summit on the Red Sea in Saudi Arabia, Al Rumayyan said.

The comments suggest that Japan will remain a priority for PIF global investment as the fund seeks to increase its annual deployment of capital to US$70 billion after this year. It allocated nearly US$57 billion across the priority sectors in 2024.

Saudi Arabia has been leaning more heavily into its relationships with Asian nations in recent years, as it seeks to draw more foreign partners to help advance the country’s multi-trillion dollar Vision 2030 economic transformation programme. 

There has been a strong emphasis on the financial sector, with multiple ETFs launched in markets including mainland China, Hong Kong and Japan to track Saudi assets over the last two years. Asian banks have emerged as major financiers for Saudi entities.

In energy, Saudi Arabia is working with Japan on developing the market for blue ammonia.

Additionally, the kingdom is developing Dragon Ball and anime theme parks at its Qiddiya mega entertainment city on the outskirts of Riyadh, in partnership with Japan.

The Future Investment Initiative (FII) Tokyo conference held from Nov 30 to Dec 1 was the second FII event held in Asia. BLOOMBERG