Activist investing in the country surged in 2025. Companies should prepare for more activity in 2026.
Shareholder activism in Japan set new records in 2025, and activity levels are already heating up so far this year. Companies need to proactively address shareholder concerns before an activist does.
Year-end data from Barclays shows Japan saw 56 activist campaigns in 2025, making it the busiest year on record for activism in the country. Japan now accounts for almost half of all global activism outside the U.S..
What was once seen as primarily a Western approach has become an increasingly common tool in the Japanese market, including among domestic investors. Global activist leaders like Elliott Investment Management and Oasis Management launched multiple campaigns targeting Japanese companies in 2025. Japan’s Murakami Funds outpaced both hedge funds, with eight campaigns last year, joining Starboard Value as the third-busiest activist in the world.
Activist investor tactics are evolving and adapting to every market they enter. That means companies and their communicators need to constantly refine their response plans. They need to be ready with quick, cohesive messaging and targeted outreach to stakeholders, especially top shareholders. Most importantly, they must have a willingness to engage constructively with activist investors, even when views differ.
Past experience from other markets shows that purely defensive positions rarely succeed. Going back a decade, U.S. company responses often saw management teams and boards shutting out the activist entirely, hoping shareholders would back them. That approach is now rare, save for some smaller cap campaigns, as boards have learned that meaningful engagement with activist shareholders, while challenging, is typically more effective than resistance.
Activists’ path to Tokyo
While activist investor interest in Japanese companies has been high for decades, several developments have accelerated activity. The country’s move from deflation to inflation, combined with the Tokyo Stock Exchange's 2023 "price-to-book 1.0" initiative, created a shared framework around cost of capital and return on equity. This made productive conversations between activists and management more feasible.
Capital allocation also became a primary focus point, with share buybacks and dividend hikes comprising 50% of campaign demands in 2025, according to Lazard.
Activists aren’t stopping there: Operational and strategy demands surged to 30% of Japanese campaigns last year, with some campaigns resulting in CEO changes. If Japan’s activist arc is anything like the U.S.’s, soon dissidents will lean more heavily on pushing companies to sell certain parts, or the whole business altogether.
Larger Japanese companies are also increasingly targeted, with companies in the $5-20 billion range representing 24% of targets, well above their 15% share of the Japanese public market.
Meanwhile, Japan’s investor base is broadening and globalizing. Non-local hedge funds accounted for 43% of activity, Lazard data show, as international players like Elliott, ValueAct and Palliser joined Asia-based firms Strategic Capital and 3D Investment Partners in waging multiple campaigns.
How to prepare
While Japan’s market has distinct characteristics, certain shareholder and activist investor engagement principles apply universally. Here are key steps Japanese companies should consider in 2026:
Be your own activist
Management teams, board members and outside advisors (financial, legal and communications) should collaborate to identify potential areas of concern before an activist does.
This includes examining potential operations, shareholder value, cash management, succession planning and leadership issues.
Create a Break Glass plan
These are now standard for companies around the world.
Build a communications response plan covering typical scenarios (usually between three and five) that emerge during activist campaigns. This should be updated and test-deployed regularly to ensure its effectiveness.
Engage a proxy solicitor
Consider hiring a proxy solicitor, and utilize their stock watch features, which will alert the company to movement in the shareholding base.
Also monitor IR webpage traffic and the IP addresses analyzing the company’s online disclosures and information – this too can be an early warning sign.
Speak to the largest and most loyal shareholders
Proactively engage these investors before an activist does.
Regular dialogue helps leadership understand their priorities and concerns - do not assume full alignment with corporate strategy.
Such conversations should mirror an investor roadshow, with clear articulation of the strategic direction and capital allocation plans.
Companies without a proactive investor engagement strategy and a clear narrative around strategy and capital allocation are leaving themselves exposed. Proactive engagement is no longer optional but essential for building and maintaining investor and stakeholder confidence when an activist investor approaches your company.