TOKYO, April 16 : Japan’s financial regulator sees private credit as a potential key pillar of its new strategy to meet rising corporate funding demand driven by a surge in M&A activity, a senior official told Reuters, despite turbulence in overseas private credit markets. The move reflects a shift in Japanese corporate behaviour, with rising inflation prompting firms to invest cash piles they have been sitting on for long, a trend analysts say could accelerate as Prime Minister Sanae Takaichi prioritises investment-led growth. In contrast with overseas private credit markets that are taking heavy redemption hits, Japan’s market “remains underdeveloped and needs cultivation,” Michinori Haba, the Financial Services Agency’s deputy director-general in charge of financial markets, said in an interview. Haba said funding demand has strengthened further as the Takaichi administration promotes investment alongside rising M&A activity, accelerating government debate over the need to diversify providers of capital. “Under the government’s new financial strategy, domestic private credit could form one of the key pillars,” he said, adding that the policy is premised on close monitoring …