Landscape view of Tokyo (©JAPAN Forward by Kaito Hidemitsu)
The Mori Memorial Foundation's Institute for Urban Development announced the Global Power City Index (GPCI) 2025 on December 17. Tokyo ranked second for the first time, marking its highest position ever.
Gains in cultural appeal, international exchange, and environmental initiatives contributed to the rise. At the same time, the survey pointed to challenges, including a relative decline in economic competitiveness.
Tokyo Rises to Second Place
The top three cities in the 2025 rankings were London in first place, followed by Tokyo and New York.
London held on to the top spot for the 14th consecutive year. Along with its role as a global financial center, the city scored highly for its ability to attract talent and for the strength of its content industries. However, rising housing costs driven by inflation weighed on its livability score.
Tokyo recorded a sharp increase in the cultural interaction category, alongside continued stability in its living environment. The data clearly reflects the city's growing cultural appeal, which underpins inbound tourism demand. At the same time, Tokyo's ranking in the economic category declined from 2024, suggesting the influence of external factors such as the weak yen.
New York slipped from second to third place. While high inflation had a negative impact, the city's economy remains strong, led by the financial sector, allowing it to maintain a solid overall standing.
Beyond the top-ranked cities, the survey shows that inflation, currency fluctuations, and other external factors have affected rankings across many cities, particularly in Europe and the United States. Rising prices and rents are increasingly being reflected as pressures on urban life.
Cultural Interaction
Japanese cities stood out for their growth in the culture interaction category. Tokyo even surpassed London in its evaluation for nightlife. This trend is not limited to Tokyo and can also be seen in major East Asian cities such as Osaka, Shanghai, Beijing, and Seoul.
Osaka rose to 18th place, up from its position in 2024. At the press conference announcing the results, Hiroo Ichikawa, an honorary professor at Meiji University and a board member of the Mori Memorial Foundation, noted that much of the data was collected before the opening of Expo 2025, Osaka, Kansai. As a result, the survey does not yet capture inbound tourism demand or the economic impact during the Expo period.
Ichikawa said that urban growth often accelerates before and after major international events, adding that Expo 2025 likely contributed to Osaka's urban competitiveness.
Advanced Talent
As competition among cities intensifies, the ability to attract and retain highly skilled talent was identified as a key factor in expanding urban potential. Tokyo ranked fourth in the advanced human resources category, but placed only 19th in the GPCI Financial Centers index. This highlights the gap with London and New York, as well as with Asian financial hubs such as Hong Kong and Singapore.
The GPCI Startup Ecosystems index also pointed to the need for stronger development of entrepreneurial talent and improvements in educational environments as important challenges for Tokyo's future growth.
Responding to a question from JAPAN Forward, Heizo Takenaka, honorary professor at Keio University and chairman of the Mori Memorial Foundation's Institute for Urban Development, emphasized the importance of labor market reform.
"One of the most important reform issues is the labor market. We have to make it much more flexible," he said.
Adaptability
The 2025 survey highlights that urban strength is shaped not only by efforts to enhance a city's own appeal, but also by how effectively cities respond to uncertain external factors such as inflation and currency fluctuations.
Going forward, the ability to adapt existing strengths while responding to changes in the external environment will be crucial. The findings suggest that cities will increasingly need to adopt more strategic and flexible approaches to remain competitive.
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Author: JAPAN Forward
