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Japan joins Islamic banking revolution

Japan is planning to launch a new range of services compliant with Islamic Shariah law, according to reports.

The Islamic banking industry is booming worldwide and Tokyo is now looking into gaining a share of the lucrative market for Shariah-compliant financial products.

A Japanese newspaper report in Nihon Keizai Shimbun claims that the government-backed Japan Bank for International Co-operation (JBIC) has established a new advisory board consisting of four leading Islamic legal scholars to examine possible ways of entering the Islamic financial services market.

JBIC is also teaming up with Sumitomo Mitsui Banking, Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi to study the Islamic banking market and Japan Asia Investment has created its own advisory panel of Islamic legal scholars to assess its Shariah Asian Investment Fund.

The move is being seeing as an attempt to attract Middle Eastern oil money, as global fuel prices continue to soar.

Islamic law forbids Muslims from receiving or paying interest of any kind from loans and bans investment in certain markets and products. Currently worth around $300 billion, the Islamic banking sector is expected to soar to $1 trillion by 2013.

In the UK, the chancellor of the exchequer Gordon Brown has announced his intention to make Britain a gateway for Islamic trade and finance, forging new links between the country and the Muslim world.