Saudi Arabia’s Sovereign Fund Plans to Boost Investments in Japan to $27 Billion by 2030https://english.aawsat.com/business/5215035-saudi-arabia%E2%80%99s-sovereign-fund-plans-boost-investments-japan-27-billion-2030
Saudi Arabia’s Sovereign Fund Plans to Boost Investments in Japan to $27 Billion by 2030
A photo from the opening ceremony of the Priority Summit in Tokyo (Future Investment Initiative)
Yasir Al-Rumayyan, Governor of Saudi Arabia’s Public Investment Fund (PIF) and Chairman of the Future Investment Initiative (FII) Institute, announced that the Kingdom is aiming to increase its investments in Japan to $27 billion by 2030.
Speaking at the FII Priority Asia Summit in Tokyo, held under the theme “New Asia,” Al-Rumayyan described Japan as a “principal partner” for Saudi Arabia, noting that 39% of Japan’s oil imports come from the Kingdom.
He said PIF invested $11.5 billion in Japan between 2017 and 2024, adding: “We expect this figure to rise to $27 billion by the end of 2030.”
These investments currently contribute an estimated $6.7 billion to Japan’s GDP, a figure he hopes will reach $16.6 billion by the end of the decade.
He further highlighted a series of memorandums of understanding signed last October with major Japanese financial institutions, including Mizuho Bank, Sumitomo Mitsui Financial Group, MUFG Bank, Nippon Export and Investment Insurance (NEXI), and the Japan Bank for International Cooperation (JBIC).
Valued at more than $51 billion, the agreements aim to stimulate bilateral capital flows through debt instruments and capital-market cooperation.
At the end of last year, Mizuho Financial Group launched the One ETF FTSE Saudi Arabia Index, now listed on the Tokyo Stock Exchange. With an initial market capitalization exceeding 15 billion Yens, it has become the largest Japan-listed ETF focused exclusively on the Saudi market. Both PIF and Mizuho are anchor investors in the fund.
Al-Rumayyan outlined sectors where he sees strong potential for Japanese companies in Saudi Arabia, including tourism, travel, entertainment, advanced manufacturing, and innovation. He also emphasized promising opportunities in industrial development, logistics, clean energy, and renewable infrastructure.
He stressed the importance of critical minerals in the electric-vehicle and AI era, noting that Saudi Arabia’s extractable mineral resources exceed $2.5 trillion, including significant reserves of uranium and cobalt. The Saudi mining company Maaden is expanding its investments to support growth in EVs, batteries, and other strategic industries.
During a special session on artificial intelligence, Al-Rumayyan said Saudi Arabia is well positioned to become a global AI hub, citing its energy capacity, land availability, and government commitment to building the sector.
These initiatives, he said, reinforce the Kingdom’s commitment to “investing for the future” and strengthening Asia’s role as a global center of innovation.
Tokyo Governor Yuriko Koike officially opened the summit, highlighting Asia’s dynamic role in shaping the future of trade, technology, and investment. She called on global leaders to take bold action and deepen collaboration to drive the region into a new era of prosperity.
Prince Faisal bin Bandar bin Sultan Al Saud, President of the Saudi Esports Federation and Vice Chairman of Savvy Games Group, emphasized the importance of youth development and infrastructure in advancing the esports industry.
Hiromi Yamaji, CEO of the Japan Exchange Group, said Japan’s markets are experiencing renewed momentum driven by an exit from decades of deflation, rising foreign-investor interest, and significant progress in corporate governance.
Alongside the summit, the FII Institute released the fifth edition of the Global Future of Work Compass, focusing on Asia. Based on surveys of 200 companies and 100 young people across nine major Asian economies, the report identifies emerging risks and opportunities related to AI automation and youth skills.
The Institute also unveiled the Global Future of Work Navigator, a digital platform that compiles regional insights into a comparative interface for policymakers.
The report shows that Asia accounts for 25% of global R&D and 70% of patent applications, driven largely by China, Japan, South Korea, and Singapore. But adoption of AI varies sharply: only 64% of executives in Japan expect to use AI within five years, the lowest rate in the region, compared with 86% in emerging Asian markets, where companies still face constraints such as limited size and funding.
Skills gaps are also widening. STEM graduates make up about 40% of China’s workforce, versus 20% in Japan, where 81% of employers report difficulty hiring qualified talent.
Goldman Sachs Cuts Oil Price Forecasts after US-Iran Deal
Vessels at the Strait of Hormuz, as seen from Musandam, Oman, June 15, 2026. REUTERS/Stringer
Goldman Sachs lowered its fourth-quarter Brent crude oil price forecast to $80 from $90 and cut its 2027 average estimate to $75 from $80, after the US and Iran signed a preliminary agreement to reopen the Strait of Hormuz.
The revision is the bank's second cut in a week after it lowered its oil price forecast for 2027 on Friday, Reuters reported.
Analysts said in a note released late on Monday that they now expect Gulf exports to normalize to pre-war levels by the end of July, earlier than their previous forecast of end-August.
Oil prices eased on Tuesday, having slipped nearly 5% to their lowest since March 10 after US President Donald Trump said a memorandum of understanding was signed to end the US-Israeli war with Iran, which had closed the Strait of Hormuz.
FILE PHOTO: A drone view of vessels anchored in the Strait of Hormuz as seen from Musandam, Oman, June 8, 2026. REUTERS/Stringer/File Photo
The recent breakthrough in the Strait of Hormuz crisis is more than a temporary development aimed at ensuring the flow of energy shipments. It represents a strategic shift with deep and direct economic and investment implications for the financial systems of the Gulf Cooperation Council (GCC) states. As this vital waterway serves as the main artery of global energy trade, carrying the bulk of Gulf oil and gas exports to international markets, the restoration of normal shipping activity opens new prospects for broader regional stability.
The United States and Iran recently announced a preliminary agreement to end the war in the Middle East and reopen the strategically important Strait of Hormuz after months of bloodshed and global economic disruption. US President Donald Trump said the strait, a critical route for global oil supplies that Iran had restricted since the start of the war, would be reopened. He added: “The deal with the Islamic Republic of Iran is now complete. Ships of the world, start your engines. Let the oil flow.”
Global markets reacted immediately to news of the preliminary agreement. Benchmark Brent crude futures fell more than 4.5 percent, dropping below $84 a barrel as investors awaited the signing of a formal treaty in Switzerland next Friday. The return of normal maritime traffic has opened new prospects for broader regional stability.
In comments to Asharq Al-Awsat, financial and economic adviser Dr. Hussein Al-Attas said the easing of the crisis goes beyond preventing disruptions to crude supplies and should instead be viewed as a structural support for financial stability. He noted that the benefits of renewed confidence far outweigh the temporary oil price spikes generated by geopolitical tensions.
Last week, the World Bank indicated that the expected gradual resumption of oil and gas flows through the Strait of Hormuz would help ease financial bottlenecks across GCC countries. It said the recovery of oil export growth would gradually support regional GDP growth, which is projected to reach 4.2 percent in 2027.
These optimistic recovery forecasts mark a turning point after a severe contractionary period. The World Bank noted in its structural analysis that the economic impact of the disruption was not uniform across GCC states, but depended largely on each country's reliance on the strait as its sole export outlet.
Kuwait and Iraq were identified as the most severely affected because neither has alternative maritime export routes outside the Arabian Gulf. The disruption created acute financing gaps and large budget deficits as millions of barrels per day remained stranded during months of restrictions.
Qatar faced complex logistical challenges in securing alternative shipping routes for liquefied natural gas exports bound eastward, resulting in delayed shipments, operational pressure on liquefaction facilities, and a sharp increase in insurance costs for Qatari tankers.
Major regional ports were also affected, particularly in re-export activity and logistics services. The financial and banking sectors in the UAE and Bahrain incurred direct costs as international funds increased the risk premium applied to investment assets in both countries.
In contrast, Saudi Arabia demonstrated considerable logistical and structural resilience during the crisis, benefiting from advanced infrastructure that enabled it to redirect more than 60 percent of its oil exports through the Red Sea via the East-West Pipeline. Likewise, Oman's ports on the Arabian Sea and Indian Ocean, including Sohar and Duqm, provided the Omani economy with geographic flexibility beyond the constraints of the Strait of Hormuz.
FILE PHOTO: A drone view of vessels anchored in the Strait of Hormuz as seen from Musandam, Oman, June 8, 2026. REUTERS/Stringer/File Photo
Filling Financial Gaps
Technical analyses of energy markets indicate that the gradual restoration of navigation through the strait will allow Gulf producers to return to normal export levels and generate the revenues needed to close multibillion-dollar financing and budget gaps that emerged as a result of the maritime restrictions.
The breakthrough also coincides with substantial pent-up demand from major Asian energy importers. Governments and refiners across Asia sharply curtailed consumption during the conflict and drew down inventories. They are now prepared to rebuild strategic reserves, ensuring sustained demand over the medium and long term.
Despite these positive prospects, energy experts quoted in a notable Associated Press report expect it will take several months before energy companies can fully restore operations to meet global demand. They noted that slow shipping and refining processes, along with lingering concerns about safe passage through the strait, mean the agreement's full positive impact will not be felt immediately.
In managing the crisis, Saudi Arabia's logistical and structural resilience again stood out. During the conflict, the Kingdom successfully utilized its advanced infrastructure to redirect more than 60 percent of its oil exports through the Red Sea via the East-West Pipeline, enabling it to maintain supply flows, seize market opportunities and mitigate export disruptions. This demonstrated the effectiveness and capability of Riyadh's alternative logistics infrastructure even under the most challenging geopolitical conditions.
A person sits in shallow water as cargo and commercial vessels are anchored in the Strait of Hormuz off Bandar Abbas, Iran, Monday, June 8, 2026. (Amirhosein Khorgooi/ISNA via AP)
Declining Risk Premium
Al-Attas told Asharq Al-Awsat that the most immediate benefit of the breakthrough is the decline in the geopolitical risk premium. During periods of conflict and uncertainty over potential closures, this premium rises automatically across Gulf assets and markets, creating pressure on financial markets and increasing operating costs.
With tensions easing, the premium falls sharply, directly boosting the confidence of regional and international investors and encouraging a strong return of both short-term and long-term investment flows to regional markets.
This decline is also closely linked to a recovery in maritime logistics and lower transportation and insurance costs. Continued tensions in the strait had driven shipping rates and war-risk insurance premiums to record levels, affecting trade flows and supply chains across the Gulf and beyond.
As stability returns, these costs are expected to decline significantly, improving the efficiency of both regional trade and international shipping routes.
Vessels at the Strait of Hormuz, as seen from Musandam, Oman, June 14, 2026. REUTERS/Stringer
Momentum for Financial Markets
Al-Attas expects Gulf financial markets, including equities and fixed-income instruments, to respond positively to lower geopolitical risks. Investor appetite for blue-chip stocks is likely to increase, particularly in the banking, petrochemicals, transportation and logistics sectors, which serve as key drivers of regional exchanges.
The benefits will extend beyond equities. Gulf bonds and sukuk are expected to gain from lower yields and reduced risk premiums, increasing the attractiveness of sovereign and corporate debt instruments to global investment funds.
Greater clarity in the outlook also enhances the appeal of foreign direct investment. Global capital is constantly in search of stable and secure environments. As concerns over international shipping routes and energy corridors recede, Gulf countries become increasingly attractive destinations for foreign investment, particularly given the large-scale opportunities in tourism, industry and technology tied to national development plans and economic diversification efforts.
Regarding oil markets, Al-Attas said that although oil prices could ease somewhat as fears of supply shortages and disruptions fade, this price stability should be viewed as a positive development and a genuine gain over the medium and long term. Gulf states are not seeking temporary price spikes; rather, they benefit more from sustained global demand and the reliable, secure delivery of exports to both traditional and emerging customers.
This stability is also expected to improve the domestic business environment by accelerating major economic projects. Periods of uncertainty often lead companies and large investment groups to postpone expansion decisions or slow capital spending and liquidity deployment. With risks receding, private-sector decision-makers now have a clearer outlook for advancing strategic planning, investment expansion and hiring, supporting the region's long-term development goals.
Most Gulf Markets Gain on Iran Dealhttps://english.aawsat.com/business/5284240-most-gulf-markets-gain-iran-deal
Traders wait at the Bahrain Bourse in Manama_ Bahrain_ November 8_ 2020. REUTERS
Most Gulf equities rose in early trade on Monday after the US and Iran announced a preliminary deal to end the war and restore traffic through the Strait of Hormuz.
Pakistan's prime minister said the two countries are expected to sign a memorandum of understanding in Switzerland on Friday, following mediation by Islamabad.
Trump said on Sunday the waterway would reopen "toll free" and that the US blockade of Iranian ports would be lifted, while Iran's Mehr news agency reported the draft deal envisages reopening it within 30 days under Iranian arrangements.
Saudi Arabia's benchmark index gained 0.5%, with the country's biggest lender by assets, Saudi National Bank.
However, oil giant Saudi Aramco slipped 1.1%.
Brent crude futures fell $3.65, or 4.2%, to $83.68 a barrel by 0630 GMT.
Qatar's benchmark index advanced 1%, with Qatar National Bank, the region's largest lender, jumped 1.9%.
UAE bourses were closed for a public holiday.
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