Japan’s exceptionally tight graduate labour market is intensifying competition among banks, hedge funds and other investment firms seeking to recruit the country’s strongest young talent, according to a report by Bloomberg.

With almost all university graduates finding employment and many receiving multiple offers before leaving school, financial firms are increasing starting salaries and adding benefits and career opportunities to attract candidates.

The recruitment push comes as stronger market activity and dealmaking improve prospects across Japan’s financial sector, while demographic changes continue to constrain the supply of workers. Domestic megabanks recruit hundreds of graduates each year, while international firms and hedge funds are targeting smaller pools of candidates through campus programmes and early-career initiatives.

The broader Japanese employment market stands in contrast to conditions facing graduates in several other major economies, where the impact of artificial intelligence adoption and corporate caution over hiring have made securing entry-level positions more difficult.

Around 98% of university students graduating in March 2026 found employment, according to Japan’s Ministry of Health, Labour and Welfare. The figure highlights the strength of demand for newly qualified workers, with around 600,000 students completing undergraduate programmes each year.

Students are also entering the market with multiple options. Career-tasu data indicates that Japanese undergraduates had received an average of about 2.4 job offers before graduation, compared with 0.79 offers for US bachelor’s degree graduates in a separate survey by the National Association of Colleges & Employers.

Finance remains considerably more difficult to enter than the broader Japanese job market. Recruit Works Institute estimates that there were around five graduate applicants for every finance-sector position this year, making it the most competitive of the eight industries covered by its research.

At the same time, demand for financial graduates is increasing. The number of finance-sector openings for students graduating in March 2027 is expected to rise by more than 10% to roughly 10,400, according to the institute.

Higher compensation is another feature of the competition. Starting salaries in Japan’s finance and insurance sector increased 7.4% this fiscal year, according to Recruit Works, the largest increase among the industries it tracks. More than two-thirds of financial companies surveyed said they had raised salaries.

Several major financial institutions have already increased starting salaries. Mitsubishi UFJ Morgan Stanley Securities, Daiwa Securities Group and Sumitomo Mitsui Financial Group’s brokerage business are among those offering higher pay to new graduates.

Daiwa is offering substantially more to graduates with advanced skills in data analysis, programming, mathematics, science and technology. Its specialist “expert course” carries starting pay of at least JPY500,000 a month, with a further increase planned for the next fiscal year. The brokerage also offers interest-free student-loan repayment beginning in an employee’s sixth year.

Sumitomo Mitsui Banking Corp has introduced 11 recruitment tracks covering areas including global banking and retail, allowing graduates to pursue more specialised career paths. Employees joining the global banking track can also undertake overseas assignments after completing their initial training in Japan.

International banks are competing for the same pool. Bank of America says it runs one of the most active campus recruitment programmes among foreign banks operating in Japan, with graduate hires required to be bilingual. Citigroup has recruited between 20 and 30 new graduates annually in Japan since 2020 and says AI has not altered its commitment to entry-level hiring.

Hedge funds are also becoming more active in the battle for graduates as the Japanese investment-management industry expands.

Point72 selected 20 candidates from roughly 300 applications for a one-week workplace programme in Tokyo this year. Since launching talent-development initiatives for Japanese students and graduates in 2017, the firm has hired seven associates, two of whom have subsequently become portfolio managers.

The competition is extending beyond traditional hedge funds and banks. Private equity, private credit and real estate are increasingly driving activity and recruitment across Japan’s asset-management industry, according to Fuyuki Samejima, a director covering financial services and consulting at recruiter Robert Walters Japan.