It isn’t just unemployed bankers that are saying sayonara to Japan. Last month, HSBC announced it would relocate its Japanese equity operations to Hong Kong, a move that came shortly after Nomura revealed that its head of global equities and head of investment banking would no longer be working out of Japan. But they aren’t the only ones leaving.

Warwick Pearmund, a senior consultant for finance sector recruitment at Boyd & Moore, says he has seen a trend in front-office and IT over the past year to relocate to Hong Kong and Singapore for cost-cutting reasons.

Kirstin Duffy, managing director of Morgan McKinley Tokyo, says she has also seen some movement of roles from Japan to Hong Kong and Singapore as global financial institutions continue to assess their cost bases. “So far, it seems these have been predominantly in equity-related areas and on a relatively small scale,” she says.

But why are HK and Singapore cheaper? The answer is tax. Japan’s 30% corporate tax rate, combined with a local enterprise tax of approximately 7% and inhabitants tax of 6%, is almost double the 20% corporate tax rate in Singapore and the 17.5% rate in Hong Kong.

Yet even with the obvious savings to be had by moving certain functions out of Japan, we probably shouldn’t be expecting a mass exodus of jobs. Pearmund says although there are plenty of roles in IT and front office that with today’s technology could be run from anywhere in the world, many functions still require a local presence.

“If you have a domestic client base or coverage you need to be based in Japan. And many clients – especially domestic ones – like the fact that they can have someone on the ground to contact,” he adds.