Foreign banks are downsizing their operations in Japan, sparking fears that Tokyo's status as a global financial centre is under threat.
Several major investment banks have already significantly reduced headcount in their Japanese bases, while Standard Chartered will close its branch in central Tokyo next year, the Financial Times reports.
Regulatory filings show that Goldman Sachs cut staff numbers in Japan by 14 per cent in the 12 months to March 2012, with UBS trimming the number of employees based in the country by 12 per cent over the same period.
"Everybody is taking it down to the bare minimum," one analyst at a foreign bank told the newspaper.
Reasons for the trend include the high cost of operating in Japan, with the yen having risen by 24 per cent against the dollar since Lehman Brothers collapsed in 2008.
In addition, the perception of Tokyo as a difficult market for foreign bankers to do business in remains.
"Japan is not open; it doesn't encourage people to come here," a foreign fund manager commented.
By Asim Shah