Greenhill has hired bankers Kensuke Hotta and Hiroto Yamada to launch an advisory business in Japan, where it will guide companies through domestic deals and cross-border investments into the US and other developed markets.

The merger advisory firm, which already generates more than half of its revenue from outside the US, said late on Tuesday that Mr Hotta would be chairman of Greenhill Japan, effective immediately, while Mr Yamada would start as managing director of the business in January.

Greenhill, which has been considering whether to open an operation in Japan for almost four years, believes Japanese clients are anxious to hammer deals together despite the still-tight credit markets.

"Japan is a well-developed market," said Robert Greenhill, the firm's founder and chairman.

"The corporations are strong and liquid now - they weren't in this position 10 years ago", in the wake of the country's own banking crisis.

He added: "Many Japanese companies now have the liquidity to do things they have been wanting to do for years."

Mr Hotta joined Morgan Stanley from Sumitomo Bank in 2001 after helpingto create Sumitomo's mergers and acquisitions department.

He stepped down as chairman of Morgan Stanley Japan last December but retained a role as an advisory director who worked closely with the bank's Japanese clients.

Mr Yamada will move to Greenhill after leaving Merrill Lynch, where he worked as head of the bank's Japan M&A group.

He spent nine years at Goldman Sachs before joining Merrill, specialising in deals involving financial institutions and telecommunications, media and technology companies.

Greenhill already has foreign offices in London, Frankfurt and Toronto.

Mr Greenhill acknowledged that the global merger advisory business could slow further if credit remains difficult or exorbitantly expensive to obtain.

However, he said themarket's overall mood appeared to be shifting now that US and European governments have announced sweeping plans to buy stakes in banks and guaranteevarious types of loans and deposits, along with a range of other moves aimed at loosening the rigid financing markets.

"The prescription that they've put forward should provide the ability for banks to start lending to each other," he said.

"There is now a basis for developing liquidity in the market."