The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
▶ Japan eyes takeover of critical factories during emergencies
15 Feb, 2025
The Japanese government has revised its legal guidelines to enhance economic security, allowing it to temporarily take over factories producing critical goods like semiconductors in emergencies. This measure aims to ensure stable production of essential items like medical supplies during crises and protect key technologies from foreign influence. The revisions to the Economic Security Promotion Act, effective next Wednesday, will enable government intervention if private sector support isn't enough to secure supply chains. However, the government pledges to be cautious and avoid excessive interference in private businesses. A similar system already exists in the defense industry.
Nikkei Asia: https://asia.nikkei.com/Politics/Japan-eyes-takeover-of-critical-factories-during-emergencies
▶ Only 9% of Japanese people have used generative AI: survey
15 Feb, 2025
A survey by the Nomura Research Institute reveals that while 61% of Japanese people are aware of generative AI, only 9% have used it. The use of AI is more common among younger people, with 20% of those aged 15-19 and 21% in their 20s having tried it. Japan hopes AI will address labor shortages due to its aging population, but concerns about privacy and security persist. In the business sector, AI adoption is more common, especially in industries like retail, though a lack of AI specialists and knowledge hinders further use. The government is working on a plan to promote AI development safely.
Mainichi: https://mainichi.jp/english/articles/20250215/p2g/00m/0sc/021000c
▶ Japan, Australia to bolster IT personnel of Pacific island nations
17 Feb, 2025
Japan and Australia are partnering to develop IT personnel in Pacific island nations to counter China's growing influence in the region. The two countries are hosting a three-day session in Japan with 15 Pacific Islands Forum members, focusing on building digital infrastructure and providing training in areas like undersea cables and Open RAN technology. The initiative aims to strengthen local capacity for managing communications systems and reduce reliance on Chinese companies. This collaboration is part of broader efforts to ensure the Pacific islands remain engaged amid China's expanding presence through its Belt and Road initiative.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Japan-Australia-to-bolster-IT-personnel-of-Pacific-island-nations
▶ Japan's GDP grows annualized real 2.8% in Oct.-Dec., outlook murky
17 Feb, 2025
Japan's economy grew by an annualized 2.8% in the October-December 2024 quarter, marking three consecutive quarters of expansion, driven by strong corporate spending. Nominal GDP reached 609.29 trillion yen ($4.01 trillion), surpassing the 600 trillion yen mark for the first time. However, private consumption remained weak, reflecting the impact of inflation and stagnant real wages. While capital investment increased and exports saw growth, domestic demand, particularly imports, showed signs of weakness. Despite this, the economy is expected to continue growing, though uncertainties remain, particularly regarding global demand and the potential impact of U.S. tariffs on Japanese exports.
Mainichi: https://mainichi.jp/english/articles/20250217/p2g/00m/0na/010000c
▶ Basic energy plan pushes a return to nuclear power
18 Feb, 2025
The Japanese government officially approved its new basic energy plan on February 18, emphasizing nuclear power alongside renewable energy to meet rising electricity demand and reduce carbon emissions. The plan includes a "Green Transformation 2040 Vision" aimed at decarbonization, with nuclear power's share in electricity generation targeted to increase to 20% by 2040, up from less than 10% today. Public reaction has been divided, with many criticizing the pro-nuclear stance due to unresolved safety concerns, particularly related to the Fukushima disaster. The government plans to
boost renewable energy to 40-50% of the energy mix by 2040, while reducing reliance on thermal power. However, experts caution that achieving the nuclear power target will be challenging and urge more transparency about the costs and risks involved.
Asahi: https://www.asahi.com/ajw/articles/15630626
METI: https://www.meti.go.jp/english/press/2025/0218_001.html
▶ High Costs a Headwind for Offshore Wind Projects; Construction Hampered by Expense of Imported Parts
20 Feb, 2025
Japan's offshore wind power projects, seen as crucial for decarbonizing the nation, are facing challenges due to rising material and construction costs, forcing companies to reconsider their plans. The government aims to boost renewable energy's share to 40-50% by 2040, with offshore wind as a key component. However, rising costs have led companies like Mitsubishi Corp. and Marubeni Corp. to reevaluate their projects. To address this, the government plans to introduce a system in 2025 allowing material cost increases to be reflected in power prices to help businesses continue their offshore wind ventures.
Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20250220-239685/
▶ Japan trade minister eyes US visit to push for tariff exemptions
20 Feb, 2025
Japanese Economy, Trade, and Industry Minister Yoji Muto is planning a visit to the U.S. to seek exemptions for Japanese products from higher tariffs imposed by President Trump. The U.S. administration intends to impose 25% tariffs on steel, aluminum, automobiles, semiconductors, and pharmaceuticals, which could impact Japan’s exports. Muto aims to convince U.S. officials that exemptions would benefit the U.S. by highlighting Japan's high-quality steel and the job creation by Japanese carmakers like Toyota. Trump's focus on tariffs is part of his strategy to boost domestic manufacturing and reduce trade deficits.
Mainichi: https://mainichi.jp/english/articles/20250220/p2g/00m/0bu/017000c
▶ Just 1 in 6 Japanese hold world's second-strongest passport
21 Feb, 2025
As of the end of 2024, only 17.5% of Japanese nationals held passports, a significantly lower rate than other advanced economies. Japan's passport ownership rate has steadily declined since peaking in 2013, partly due to rising overseas travel costs, a weakening yen, and shifting attitudes toward travel. The number of Japanese traveling abroad also remains well below pre-COVID levels, with many young people showing less interest in international experiences. Additionally, the number of Japanese students studying abroad has decreased, raising concerns about the nation's global competitiveness.
Nikkei Asia: https://asia.nikkei.com/Business/Travel-Leisure/Just-1-in-6-Japanese-hold-world-s-second-strongest-passport
▶ U.S., Japan, South Korea to team on hydrogen, advanced tech research
21 Feb, 2025
Japan, the U.S., and South Korea will launch joint research in fiscal 2025 on hydrogen power, computing, and sensors, with a focus on technology security. The initiative will involve 10 institutions and a 650 million yen budget, aiming to improve hydrogen storage and prediction models for climate and earthquakes, while preventing leaks to adversarial nations.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/U.S.-Japan-South-Korea-to-team-on-hydrogen-advanced-tech-research
▶ Hitachi wins $660m in orders for U.S., German railway controls
15 Feb, 2025
Hitachi Rail has secured railway control system renewal projects worth around 100 billion yen ($657 million) in Germany and the U.S. The company joined a €6.3 billion project to modernize Deutsche Bahn's control systems, alongside Siemens and Alstom. Additionally, it received an order from the San Francisco Municipal Transportation Agency to upgrade its streetcar signaling system. The recent acquisition of Thales' railway signal division has strengthened Hitachi Rail's position as a global leader in railway information systems and is helping it expand its operations management system orders worldwide.
Nikkei Asia: https://asia.nikkei.com/Business/Transportation/Hitachi-wins-660m-in-orders-for-U.S.-German-railway-controls
▶ Japan's Itochu to invest in Thai used car loan company, bet on middle class
17 Feb, 2025
Itochu, a Japanese trading house, is set to invest 540 million baht ($16.3 million) for a 25% stake in Eastern Commercial Leasing (ECL), a Thai automotive loan company. ECL specializes in providing loans to subprime borrowers for used cars. The investment, which follows Itochu's long-term involvement in Thailand’s consumer loans market, aims to introduce artificial intelligence to enhance credit screening and streamline operations. Despite a decline in Thailand's new car market, the used car market is expected to grow significantly, driven by a rising middle class. This move is part of Itochu’s broader strategy to capitalize on Thailand's growing economy and financial development.
▶ Osaka Gas and MHI Launch CO₂NNEX® Digital Platform for Management and Transfer of Clean Gas Certificates for e-Methane, for Use during Expo 2025
18 Feb, 2025
Osaka Gas and Mitsubishi Heavy Industries (MHI) have launched CO2NNEX®, the first digital platform in the city gas industry to manage CO2 trading and Clean Gas Certificates for e-methane. The platform will be used during Expo 2025 Osaka to track the production and lifecycle CO2 emissions of e-methane and biogas, facilitating the transfer of Clean Gas Certificates to ensure carbon neutrality at the Expo. Collaborating with other gas companies, Osaka Gas and MHI aim to enhance the adoption of e-methane technology and contribute to a carbon-neutral world by 2030.
Mitsubishi Heavy Industries: https://www.mhi.com/news/250218.html
▶ Seven-year-old startup leads Japan's lunar navigation bid
18 Feb, 2025
ArkEdge Space, a Japanese satellite startup, is leading Japan's efforts to develop lunar and terrestrial navigation services. The company makes small satellites for navigation, communication, and remote sensing. In collaboration with JAXA, ArkEdge is working on lunar navigation services, with plans for Japanese astronauts to explore the moon by 2031. The startup has launched 11 satellites and is expanding its production capacity to 100 satellites per year by 2026. ArkEdge is also exploring commercial navigation systems, offering high-precision positioning services, and is in talks with countries like Singapore, Indonesia, and Vietnam to support maritime security.
▶ Acquisition of Shares in 'FGEN LNG Corporation,' Owner and Operator of Floating LNG Terminal in the Philippines
19 Feb, 2025
Tokyo Gas has acquired a 20% stake in FGEN LNG Corporation, the owner and operator of the first floating LNG terminal in Batangas City, Philippines. This marks Tokyo Gas' first investment in an overseas LNG terminal. The company plans to apply its expertise in LNG operations to support the terminal's development. With growing energy demand in the Philippines, Tokyo Gas aims to contribute to the country’s LNG use and low-carbon goals. This aligns with its broader vision to expand LNG infrastructure and support the transition to a low-carbon society in Asia.
Tokyo Gas (Japanese): https://www.tokyo-gas.co.jp/news/press/20250219-01.html
▶ Polystyrene Blocks Used in Foundations of New Hiroshima Railway Line, Lightening Load on Underground Venue
19 Feb, 2025
For the first time in Japan, lightweight polystyrene blocks have been used to build the foundations for a commercial railway line. Hiroshima Electric Railway used these blocks instead of soil and sand for a section of the Ekimae Ohashi route, which will connect to the new Hiroshima Station opening in March. The blocks reduce the weight on a section above an underground event space, avoiding the need for large pillars. The blocks are strong, resistant to deformation, and significantly lighter than soil, allowing for safer and more efficient construction. The new tram service is expected to begin this summer.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250219-239225/
▶ Japan's Mitsui & Co. to buy $5bn stake in Australian iron ore project
20 Feb, 2025
Mitsui & Co. has acquired a 40% stake in the Rhodes Ridge iron ore project in Western Australia for $5.34 billion. This project, one of the world's largest undeveloped iron ore deposits, is expected to begin production by 2030, with Mitsui's share of annual production exceeding 40 million tonnes. Developed and operated by Rio Tinto, the project will use existing infrastructure, reducing initial costs. Despite weak demand for iron ore in China, Mitsui remains confident in the investment due to growing demand from India and Southeast Asia, forecasting significant contributions to its operating cash flow.
Nikkei Asia: https://asia.nikkei.com/Business/Materials/Japan-s-Mitsui-Co.-to-buy-5bn-stake-in-Australian-iron-ore-project
▶ KHI will show seamless future travel in mobile cabins at expo
20 Feb, 2025
Kawasaki Heavy Industries (KHI) will unveil its futuristic public transportation concept, the ALICE System, at the Osaka Kansai Expo. The system features a passenger cabin that can seamlessly transfer between cars, trains, ships, and planes, eliminating the need for transfers and reducing congestion. The exhibit will showcase a full-scale model of the cabin, which can hold up to four people and is designed for easy integration with various transportation modes. KHI’s display will be part of the Future City pavilion, offering a glimpse into the future of mobility. The Expo runs from April 13 to October 13.
Asahi: https://www.asahi.com/ajw/articles/15634120
▶ Japan's Sakana AI touts breakthrough in more efficient AI training
20 Feb, 2025
Tokyo-based startup Sakana AI has developed a system, AI CUDA Engineer, which can speed up AI development by 10 to 100 times by automating code creation for Nvidia GPUs. The system uses biological evolution-inspired technology to optimize the use of Nvidia’s CUDA platform, improving efficiency in AI models. With support from Nvidia, Sakana aims to address the high costs and energy consumption of developing advanced AI, emphasizing that more efficient AI systems may offer a sustainable alternative to the capital-heavy approach used by major tech companies.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Japan-s-Sakana-AI-touts-breakthrough-in-more-efficient-AI-training
▶ Suzuki invests $8bn in India over 6 years, boosting role as export base
20 Feb, 2025
Suzuki Motor will invest 1.2 trillion yen ($8 billion) in India over six years, aiming to boost its production capacity to 4 million vehicles annually by 2031. This investment will strengthen its role as an export base, with plans to sell 2.54 million cars in India by 2031. Suzuki also plans to introduce its first mass-production EV in India in 2025 and focuses on expanding in India and the Middle East. The company has no plans to reenter the U.S. or Chinese markets.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Suzuki-invests-8bn-in-India-over-6-years-boosting-role-as-export-base
▶ JR firms turn to robotics, AI to address labor crunch and aging
21 Feb, 2025
Japanese railway companies are increasingly using robotics and AI to automate maintenance tasks, addressing worker shortages and enhancing efficiency. West Japan Railway Co. (JR West) has developed a humanoid robot for tasks like tree trimming and overhead cable maintenance, reducing manpower by 30%. Shinkansen operators like JR Tokai and JR East are also implementing autonomous systems for train inspections and track monitoring. These technologies improve safety
and reduce the need for manual labor, helping to maintain the reliability of Japan's rail system as the workforce ages and shrinks.
Asahi: https://www.asahi.com/ajw/articles/15598503
▶ Kioxia unveils flash memory with 33% faster data transfers
21 Feb, 2025
Kioxia Holdings, a Japanese chipmaker, has developed a new NAND flash memory technology with 332 layers, offering 59% higher bit density and 33% faster interface speed compared to its eighth-generation, 218-layer technology. The new flash memory is more power-efficient, consuming 10% less electricity for data input and 34% less for output. Produced in Japan, this technology is aimed at meeting the growing demand from AI data centers. Kioxia is also working on combining memory cells and controllers separately in future flash memory production.
Nikkei Asia: https://asia.nikkei.com/Business/Tech/Semiconductors/Kioxia-unveils-flash-memory-with-33-faster-data-transfers
▶ Mitsubishi Logistics Corporation, Mitsubishi Corporation, and Yourstand Inc. Advancing Completely CO2-Free Electrification of Pharmaceutical Transportation
21 Feb, 2025
Mitsubishi Logistics, Mitsubishi Corporation, and Yourstand will introduce medium-size EV trucks in March 2025 to reduce CO2 emissions in pharmaceutical transportation. The EV trucks, provided by Mitsubishi Fuso, will be used by DP Network Co., Ltd. for deliveries, with charging managed by Yourstand’s system. Mitsubishi Corporation’s renewable energy plan will ensure that CO2 emissions from both charging and driving are virtually zero. This initiative is part of Mitsubishi’s broader efforts to decarbonize logistics and promote sustainable practices across the supply chain, with a focus on reducing greenhouse gas emissions in the commercial mobility sector.
Mitsubishi Corporation: https://www.mitsubishicorp.com/jp/en/news/release/2025/20250221001.html
▶ GE unit to join foreign bid for huge Japan power grid
21 Feb, 2025
U.S. energy manufacturer GE Vernova plans to join a foreign consortium bidding to build a high-voltage power grid linking Japan’s Hokkaido and Tohoku regions to the Tokyo area. The grid, which will have a 2-gigawatt capacity, is estimated to cost $10 billion to $12 billion. This marks the first time a foreign company has participated in such a tender. The consortium aims to reduce construction costs by utilizing advanced cable-laying ships and seeking financial support from the Japanese government. The project involves laying 800 kilometers of undersea cables, but rising construction costs pose challenges. The domestic consortium, including Tokyo Electric Power, is also bidding.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/GE-unit-to-join-foreign-bid-for-huge-Japan-power-grid
▶ Idemitsu Kosan and Mitsubishi Electric Start Collaboration for Use of Biomass Plastics in Home Appliances
21 Feb, 2025
Idemitsu Kosan and Mitsubishi Electric have partnered to use biomass plastics in home appliances. Idemitsu will produce biomass chemicals using the mass balance method, which Mitsubishi Electric will use for plastics in products like air conditioners and refrigerators. These plastics, made from renewable materials, aim to reduce CO2 emissions and support recycling, contributing to carbon neutrality and a circular economy.
Mitsubishi Electric: https://www.mitsubishielectric.com/news/2025/pdf/0221.pdf
Idemitsu: https://www.idemitsu.com/en/business/basic_chemicals/bioplastic/index.html
The EU-Japan Centre currently produces 5 newsletters :
Joint venture established in 1987 by the European Commission (DG GROW) and the Japanese Government (METI) for promoting all forms of industrial, trade and investment cooperation between the EU and Japan.
The EU-Japan Centre’s activities are subject to the allocation of a Grant Agreement by the European Commission for 2024-2026
