⚠ The Japanese Venture Moves With the MarketLow threat

Morgan Stanley (MS) — threat to the moat

Morgan Stanley's Japanese joint venture costs it $129 million for every 10% fall in value.

Part of Morgan Stanley's Asian exposure is an investment rather than a business it runs. Its joint venture with MUFG in Japan is accounted for under the equity method, and the firm estimates that a 10% decline in the value of its MUMSS investment would cost $129 million1. Morgan Stanley holds a 40% economic interest in the venture, and MUFG 60%2.

Loss from a 10% decline in value ($M)629IM-related investments493Other investments129MUMSS (Japan JV)Morgan Stanley Form 10-K FY2025, market risk sensitivities
The Japan stake is the smallest of three.

That sensitivity sits alongside others. A 10% decline would also cost $629 million on investments related to Investment Management and $493 million on other investments3.

The venture's results land in the Other line of Institutional Securities4, which was $1,114 million in 2025 and a loss of $152 million in the second quarter of 202656.

Morgan Stanley holds 40% of the votes in one of the two Japanese entities and 51% in the other, while MUFG holds the remainder7. Its share of the venture's income is booked under the equity method in the Other line of Institutional Securities8.

The exposure is small against the firm's pre-tax income of $21,954 million in 20259. Watch the Other line in Institutional Securities: a string of losses there alongside falling Japanese markets would show the venture turning from a contributor into a drag.

References
  1. ReportedIts joint venture with MUFG in Japan is accounted for under the equity method, and the firm estimates that a 10% decline in the value of its MUMSS investment would cost $129 million.
    Morgan Stanley Form 10-K for fiscal 2025 - Item 1A risk factors, competition and legal proceedings. — FY2025 · publ. 19 February 2026 · source ↗
  2. ReportedMorgan Stanley holds a 40% economic interest in the venture, and MUFG 60%.
    Morgan Stanley 2026 proxy statement (DEF 14A) - principal shareholders, the MUFG investor agreement and board designees, the Japanese joint venture, and executive compensation. — 2026 · publ. 2 April 2026 · source ↗
  3. ReportedA 10% decline would also cost $629 million on investments related to Investment Management and $493 million on other investments.
    Morgan Stanley Form 10-K for fiscal 2025 - Item 1A risk factors, competition and legal proceedings. — FY2025 · publ. 19 February 2026 · source ↗
  4. ReportedThe venture's results land in the Other line of Institutional Securities, which was $1,114 million in 2025 and a loss of $152 million in the second quarter of 2026.
    Morgan Stanley Form 10-K for fiscal 2025 - segment results, revenue lines and regional net revenues. — FY2025 · publ. 19 February 2026 · source ↗
  5. ReportedThe venture's results land in the Other line of Institutional Securities, which was $1,114 million in 2025 and a loss of $152 million in the second quarter of 2026.
    Morgan Stanley Form 10-K for fiscal 2025 - segment results, revenue lines and regional net revenues. — FY2025 · publ. 19 February 2026 · source ↗
  6. ReportedThe venture's results land in the Other line of Institutional Securities, which was $1,114 million in 2025 and a loss of $152 million in the second quarter of 2026.
    Morgan Stanley second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - segment results for Institutional Securities, Wealth Management and Investment Management. — Q2 2026 · publ. 15 July 2026 · source ↗
  7. ReportedMorgan Stanley holds 40% of the votes in one of the two Japanese entities and 51% in the other, while MUFG holds the remainder.
    Morgan Stanley 2026 proxy statement (DEF 14A) - principal shareholders, the MUFG investor agreement and board designees, the Japanese joint venture, and executive compensation. — 2026 · publ. 2 April 2026 · source ↗
  8. ReportedIts share of the venture's income is booked under the equity method in the Other line of Institutional Securities.
    Morgan Stanley Form 10-K for fiscal 2025 - segment results, revenue lines and regional net revenues. — FY2025 · publ. 19 February 2026 · source ↗
  9. ReportedThe exposure is small against the firm's pre-tax income of $21,954 million in 2025.
    Morgan Stanley Form 10-K for fiscal 2025 - financial highlights, income statement, balance sheet and business description. — FY2025 · publ. 19 February 2026 · source ↗
Sources
Generated September 26, 2026