Bank deposits in Tokyo and three neighboring prefectures accounted for 50.7% of all deposits across Japan at the end of fiscal 2025, according to data from the Bank of Japan.
The combined deposits in the Japanese capital and Kanagawa, Saitama and Chiba prefectures stood at ?523.1 trillion ($3.29 trillion) as of March 31 this year, highlighting the concentration of bank deposits in the?metropolitan area.
This trend is partly because assets owned by people from local areas are being inherited by their children living in the greater Tokyo area following their deaths.
The financial bases of regional banks may weaken if the gaps in bank deposits held in metropolitan and regional areas widen further. Deposits at Japan Post Bank and shinkin banks are not included in the BOJ data.
By prefecture, deposits in Tokyo stood at more than ?394 trillion, occupying about 40% of the national total. Deposits in Kanagawa, Saitama and Chiba came to some ?53 trillion, around ?38 trillion and about ?37 trillion, respectively.
The combined amount in Tokyo and the three neighboring prefectures stood at ?181.7 trillion at the end of fiscal 1998. The amount grew?2.9 times by the end of fiscal 2025. The balance in Tokyo alone expanded 3.2 times.
The Tokyo metropolitan area¡¯s share has been rising yearly since hitting 39.3% at the end of fiscal 1998.
The rate of increase in bank deposits in regional prefectures has remained low, with Kochi posting the lowest growth of 29%. The rate stood below 50% in Wakayama, Akita and Aomori. By contrast, deposits grew nearly twofold in Miyagi, Hiroshima and Fukuoka.
A rise in the number of companies seeking to keep cash on hand in the wake of economic crises, including one caused by the 2008 collapse of U.S. investment bank Lehman Brothers, also led to the increase in deposits in the Tokyo metropolitan area, home to numerous corporations.
Bank deposits will probably be concentrated further in the greater Tokyo area amid declining local populations and the increased use of online banks, which do not have local branches.
The importance of banks obtaining deposits, a key resource for lending, has been increasing as interest rates in the country are on the rise.
¡°There are concerns that regional banks will see their operations shrink and competitiveness gaps between major and local banks will widen¡± following the concentration of deposits in the Tokyo area, said Hideo Oshima, a researcher at the Japan Research Institute.
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