Citigroup and Daiwa Securities Group are expanding their Japan investment banking teams as dealmaking accelerates amid governance reforms and changing attitudes to takeovers.

Citigroup intends to lift headcount in its Japan investment banking unit by around 30% by the first half of 2026, the bank’s vice-chair for Japan Masuo Fukuda told Bloomberg.

He did not disclose the current size of the team.

Tokyo-based Daiwa has restarted overseas recruitment for merger advisory roles and is reinforcing its cross-border merger and acquisition (M&A) capability, according to CEO Akihiko Ogino.

The renewed hiring follows domestic deal activity and rising earnings from M&A-related work.

Japanese corporates have become more open to transactions after governance reforms increased focus on shareholder returns.

Companies are selling non-core assets and pursuing acquisitions overseas to drive growth, while hostile bids have become more acceptable.

M&A involving Japanese companies is nearing $350bn in 2025, the highest level since data tracking began in 1998.

Daiwa’s shift marks a reversal from a more cautious approach six months earlier, when Ogino paused recruitment after tariff announcements by US President Donald Trump.

It aims to expand its global M&A banker workforce from about 640 to 900 by March 2031.

The Japanese group launched a four-member cross-border M&A team in April and has since added two bankers.

The firm is also considering lifting its mergers advisory revenue target for the year ending March 2031 to Y100bn ($642m) from Y70bn.

Other banks are also adding capacity. Goldman Sachs has overhauled its Japan M&A advisory operations and plans to invest more than $5bn in the country over the next decade.

Jefferies Financial Group and UBS have made senior appointments.

Fukuda said the Bank of Japan’s recent decision to raise benchmark interest rates to 0.75% was unlikely to slow deal activity.