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The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
▶ Japan’s Trade with Russia Continues to Decline Amid Sanctions; U.S.-produced LNG Expected to Reduce Reliance
24 Feb, 2025
Three years after Russia's invasion of Ukraine, Japan's trade with Russia has significantly declined due to sanctions, with exports down 17% and imports falling 17% in 2024. Japanese companies, including Toyota, have pulled out of Russia, and exports of items like semiconductor equipment and cars have ceased. However, secondhand compact car exports to Russia have risen. Despite this, Russia still supplies Japan with nearly 10% of its LNG, primarily through the Sakhalin-2 project, which is exempt from sanctions. Japan's imports of U.S. LNG have increased, signaling reduced reliance on Russia. Meanwhile, Russia counters sanctions by developing its own financial messaging system and expanding trade with China and India.
Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20250224-240317/
▶ Trump's earlier promise to exempt Japan from auto tariffs draws scrutiny
25 Feb, 2025
As U.S. President Donald Trump prepares to announce new tariffs on automobile imports, a promise he made to former Japanese Prime Minister Shinzo Abe in 2019 to avoid additional duties on Japanese cars is gaining attention. In their trade pact, the U.S. and Japan agreed to act based on mutual trust, with Abe insisting that the U.S. would not impose new tariffs on Japanese automobiles. Japan's government is now using this promise to argue against new auto tariffs. While trade with Japan has remained stable, it is uncertain whether Trump will honor the pledge, especially since his America First policy could potentially review or scrap existing agreements, including the Japan-U.S. pact.
Nikkei Asia: https://asia.nikkei.com/Economy/Trade-war/Trump-s-earlier-promise-to-exempt-Japan-from-auto-tariffs-draws-scrutiny
▶ Same-day tickets to be introduced for Osaka Expo: Ishiba
25 Feb, 2025
Prime Minister Shigeru Ishiba announced that same-day admission tickets will be introduced for the 2025 World Exposition in Osaka, aiming to simplify the ticket purchasing process. The Japan Association for the Expo also revealed that same-day tickets will be available at the entrance, and a discounted "season" pass will be offered for visits from April to May. These changes come in response to sluggish advance ticket sales, with only 56.2% of the 14 million ticket sales target met. The new measures are designed to attract more visitors and address complaints about the complicated ticketing system.
Japan Times: https://www.japantimes.co.jp/news/2025/02/25/japan/osaka-expo-same-day-tickets/
▶ A Regional Pathway to Achieving SDGs and Addressing the Triple Planetary Crisis: Kickstarting the Asia-Pacific Synergy Report
26 Feb, 2025
The "Asia-Pacific Synergy Report to Address the SDGs and the Triple Planetary Crisis" initiative, organized by the Ministry of the Environment, has officially begun, with the report set for release in 2026. The report will explore how synergies can accelerate sustainable development in the region, offering case studies and practical examples to guide policymakers and practitioners. Experts from across Asia-Pacific will collaborate to enhance the report's relevance and utility. The initiative aims to strengthen regional partnerships, support Voluntary National Reviews, and contribute to post-2030 sustainable development frameworks. The event will discuss how context-sensitive synergies can address socio-environmental challenges and contribute to achieving all SDGs, particularly SDG 14 (Life Below Water) and SDG 17 (Partnerships for the Goals).
IGES: https://www.iges.or.jp/en/events/20250226
MOE(Japanese): https://www.env.go.jp/press/press_04508.html
▶ Japan adopts bill obliging firms' participation in emissions trading
26 Feb, 2025
Japan's government has adopted a bill requiring companies emitting at least 100,000 metric tons of carbon dioxide annually to join the carbon emissions trading system starting in fiscal 2026. The system will allocate CO2 emission quotas, and companies exceeding their quotas must buy additional quotas or face a 10% surcharge. Companies with lower emissions can sell or carry over surplus quotas. The bill also mandates manufacturers to report their use of recycled materials, especially those using plastics, and introduces a certification system for products that are easy to recycle and promote resource efficiency.
Japan Times: https://www.japantimes.co.jp/environment/2025/02/26/sustainability/emissions-trading-obligations/
▶ Japan mulls tightening regulations on crypto asset transactions
26 Feb, 2025
Japan is considering tightening regulations on crypto asset transactions by classifying them as financial products like stocks. The Financial Services Agency (FSA) aims to increase oversight of crypto issuers to protect users from fraud and market risks. A policy change could be outlined by June, with crypto assets potentially coming under the Financial Instruments and Exchange Act, which would require issuers to disclose detailed corporate information. As of December, Japan had 11.81 million crypto trading accounts, with deposits totaling around 4.5 trillion yen ($30.11 billion).
Kyodo: https://english.kyodonews.net/news/2025/02/c97227178416-japan-mulls-tightening-regulations-on-crypto-asset-transactions.html#google_vignette
▶ Daikin to stop making white phosphorus shells under investor pressure
27 Feb, 2025
Daikin Industries will stop producing white phosphorus rounds for the Japan Self-Defense Forces by 2025 due to investor pressure over humanitarian concerns. European investors sold Daikin shares in response, causing its stock price to drop 20%. The move reflects broader concerns about military-related investments, with companies like Komatsu also exiting this market due to similar pressures.
Nikkei Asia: https://asia.nikkei.com/Spotlight/ESG/Daikin-to-stop-making-white-phosphorus-shells-under-investor-pressure2
▶ Japan-India-Africa Business Forum Held
27 Feb, 2025
On February 26, the Japan-India-Africa Business Forum was held in Tokyo, co-hosted by the Ministry of Economy, Trade and Industry and Nikkei, with over 2,000 participants from 46 countries. During the forum, Japan's Minister of Economy, Trade and Industry, Muto Yoji, launched the Japan-India Cooperation Initiative for Sustainable Economic Development in Africa. This initiative aims to boost investment by Japanese companies in India and Africa, fostering economic growth and strengthening inter-regional connectivity. Muto emphasized the importance of enhancing economic ties and establishing frameworks to support Japanese businesses in Africa, focusing on job creation, industrial clustering, and human resource development.
METI: https://www.meti.go.jp/english/press/2025/0227_001.html
▶ Births in Japan in 2024 fall to record low of 721,000
27 Feb, 2025
In 2024, Japan's birth rate dropped to 720,988, marking the ninth consecutive year of record lows, a 5% decrease from the previous year. This decline is attributed to delayed marriages and concerns over the high cost of living. Meanwhile, deaths increased to a record 1,618,684, leading to a natural decrease of 897,696. Births fell in all 47 prefectures, surpassing government projections. The number of marriages rose slightly to 499,999, but the overall trend remains low. The number of births to Japanese nationals is expected to fall below 700,000 for the first time, earlier than projected.
Mainichi: https://mainichi.jp/english/articles/20250227/p2g/00m/0na/063000c
▶ BlackRock expands Japan pension management to $17bn in assets
27 Feb, 2025
BlackRock is expanding its pension business in Japan, securing outsourcing deals worth 2.5 trillion yen ($16.7 billion) with companies like NEC. Along with Goldman Sachs and Mercer, it aims to replicate the U.S. model of outsourcing corporate pension management in Japan. Growing demand for alternative investments and a lack of in-house expertise in Japanese corporate pension funds are driving this shift. Many pension funds, traditionally managed by trust banks and insurers, are now seeking higher returns, creating opportunities for foreign asset managers. The Japanese government is also encouraging more sophisticated asset management practices.
Nikkei Asia: https://asia.nikkei.com/Business/Finance/BlackRock-expands-Japan-pension-management-to-17bn-in-assets
▶ Japan PM Ishiba set for budget deal, but inflation clouds election hopes
28 Feb, 2025
Japan's minority government, led by Prime Minister Ishiba's LDP, is working to pass a budget by March, addressing rising inflation and living costs. The LDP has secured some support but faces stalled talks with other parties, like the DPFP, over tax cuts. With Japan's debt at 250% of GDP, the budget's handling of fiscal responsibility is crucial. As the country faces higher interest rates and bond market instability, the government's economic approach will be closely watched ahead of the summer elections.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Policy-Asia/Japan-PM-Ishiba-set-for-budget-deal-but-inflation-clouds-election-hopes
▶ Rich in cash, Japan automaker Toyota builds a city to test futuristic mobility
23 Feb, 2025
Toyota's Woven City, near Mount Fuji, is a $10 billion project designed to test robotics, AI, and autonomous transportation in a real-world environment. The first phase, completed in 2024, covers 47,000 square meters and is intended as a research hub for Toyota and its partners. While it's not a "smart city," it aims to innovate mobility and is designed with underground passageways for autonomous vehicles. The first 100 residents, called "weavers," are employees from Toyota and partner companies. Despite no immediate financial gains expected, Toyota is focusing on developing robotic rides and hydrogen technology, positioning itself against competitors like Tesla.
Mainichi: https://mainichi.jp/english/articles/20250223/p2g/00m/0bu/032000c
▶ Japan's Dentsu dives into AI to grade tuna quality in Indonesia
23 Feb, 2025
Dentsu is launching a project in Indonesia to help local fisheries improve tuna grading using its AI-powered app, Tuna Scope. The app analyzes a cross-sectional picture of a tuna’s tail to assess its quality on a five-point scale with around 90% accuracy. This technology aims to raise export prices by providing more consistent grading, addressing the variability in Indonesian tuna quality. Supported by Japan’s International Cooperation Agency, the project will begin in March and focus on assessing fresh tuna. Dentsu plans to commercialize the app in Indonesia by 2027 and expand to other Southeast Asian countries.
▶ ANA to buy at least 77 jets from Boeing, Airbus and Embraer
25 Feb, 2025
ANA's parent company has approved the purchase of at least 77 aircraft from Boeing, Airbus, and Embraer, including 18 Boeing 787-9s, 12 737-8 Max jets, 27 Airbus A321neos, and 20 Embraer E190-E2s. This simultaneous order highlights ANA’s need to expand its fleet amid high demand for planes. The deal supports ANA's growth plans by 2030 and boosts Boeing as it competes with Airbus and Embraer. ANA operates around 240 Boeing aircraft and also owns Peach Aviation with an all-Airbus fleet.
Japan Times: https://www.japantimes.co.jp/business/2025/02/25/ana-jet-purchase/
▶ Mitsubishi Electric Develops World's First Technology that Provides Visualization of Operator Know-How from System Operation Logs
25 Feb, 2025
Mitsubishi Electric has developed the world's first "Operation Log-driven Development Technology" to accelerate digital transformation (DX). This technology enhances system operation management by visualizing and sharing know-how from operator experience stored in system operation logs. It helps address labor shortages and the need to pass down knowledge, especially in managing public infrastructure. The technology enables efficient sharing of tacit knowledge, improving maintenance and operational capabilities. It also shortens development time by analyzing operation logs and refining systems. The results will be presented at INTERACTION 2025 in Japan on March 3.
Mitsubishi Electric: https://www.mitsubishielectric.com/news/2025/0225.html
▶ Drone Delivery of Medicine on River Route Demonstrated in Hamamatsu
26 Feb, 2025
In January, Hamamatsu launched a drone delivery service to bring health supplies, like medicine, to areas without pharmacies. A demonstration showed a 76-year-old woman receiving eye drops via drone over the Tenryu River. The system aims to establish drone routes over rivers, which face fewer obstacles than urban areas. The Economy, Trade and Industry Ministry plans to create such routes over Japan's first-class rivers by 2033. The service could also be used for disaster relief and primary industry tasks, like transporting seedlings and compost. Experts suggest shared drone routes could expand service offerings.
Yomiuri: https://japannews.yomiuri.co.jp/society/general-news/20250226-240675/
▶ Japan's Daikin to take its Indian business model to Africa
26 Feb, 2025
Daikin Industries aims to become the leading player in Africa by applying its successful business model from India, targeting markets like Nigeria, Ghana, and South Africa. Daikin’s experience in India, including strategic investments and expansions, serves as a blueprint for growth in Africa. Meanwhile, Kubota plans to use India as an export hub for Africa, focusing on agricultural machinery and targeting market share growth by 2030. Both companies see India as a critical resource for skilled labor, which is also valuable for expanding into Africa. Challenges include higher labor costs in Africa compared to India, making India a more cost-effective manufacturing base.
Nikkei Asia: https://asia.nikkei.com/Business/Companies/Japan-s-Daikin-to-take-its-Indian-business-model-to-Africa
▶ Toyota expands hydrogen network in Japan, starting with its supply chain
26 Feb, 2025
Toyota is expanding hydrogen use in trucks and factory equipment in Japan, with plans to produce hydrogen at its headquarters plant. It aims to make its plants carbon neutral by 2035. Despite high hydrogen costs, Toyota hopes government support will reduce the price gap with diesel vehicles. The company is also improving hydrogen truck technology, with more efficient systems expected by 2026.
▶ Uber Japan, Japan Post to Offer Parcel Delivery Service
27 Feb, 2025
Uber Japan and Japan Post announced a trial partnership to provide parcel delivery services using ride-hailing drivers. Starting in March in Kaga, Ishikawa Prefecture, drivers will deliver parcels during their waiting times on behalf of Japan Post.
Jiji: https://jen-f.jiji.com/jc/eng?g=ind&k=2025022701293
▶ Eyeglass company Jins' new device lets people use a PC via head movements
27 Feb, 2025
Eyeglass store chain Jins has released "Jins Assist," a device that allows users to control a personal computer through head movements. The device, weighing just 4 grams, attaches to glasses and connects to a computer via a cable. It helps individuals with hand or arm disabilities by enabling cursor control and mouse clicks through head nods and turns. The device costs ¥15,000 and is available for purchase online, offering a lightweight, fatigue-reducing solution without the need for recharging.
Japan Times: https://www.japantimes.co.jp/business/2025/02/27/companies/jins-pc-head/
▶ Govt Set to Raise International Tourist Tax; Aims to Use Increased Revenue to Alleviate Overtourism
27 Feb, 2025
The Japanese government is considering raising the International Tourist Tax, currently ¥1,000 per person, to address overtourism caused by the increasing number of foreign visitors. The tax, levied on people leaving Japan, could rise to ¥3,000 or ¥5,000. The revenue, originally used for promoting tourism, would be expanded to support measures against overtourism, such as improving transportation and airports. In fiscal 2023, tax revenue reached ¥39.9 billion and is expected to grow. The government aims for 60 million visitors by 2030, but concerns over infrastructure strain and overtourism remain.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250227-240852/
▶ Japan's Pocketalk to debut phone-based instant translation for 75 languages
27 Feb, 2025
Japan's Pocketalk is launching a smartphone-based translation service in February that translates Japanese into 75 languages, helping tour guides communicate with groups of mixed-language visitors. This service aims to address the labor shortage in the tourism industry by allowing travel agencies to increase tours without hiring more staff. Guides will use the service via a dedicated site, and tourists can access it through a QR code. The service supports voice and text translations and costs 99,000 yen ($662) per month. Pocketalk plans to expand the service internationally, starting with the U.S.
▶ Japan Moon rover sets out for world's 1st private lunar exploration
27 Feb, 2025
Japanese startup Dymon Co. launched its ultra-compact Moon rover, Yaoki, on a SpaceX Falcon 9 rocket from NASA's Kennedy Space Center. The 498-gram rover, mounted on Intuitive Machines' lunar lander, is expected to reach the Moon's south pole in early March. Named after the Japanese proverb "nana korobi, ya oki," Yaoki symbolizes resilience. After landing, it will acclimatize for five days before being operated remotely to capture images. The mission is part of NASA's Commercial Lunar Payload Services, aiming to explore the lunar surface, particularly the south pole, which may hold ice for water and rocket fuel.
Mainichi: https://mainichi.jp/english/articles/20250227/p2g/00m/0sc/070000c
▶ Japan copper processor gains toehold in U.S. as Trump eyes tariffs
28 Feb, 2025
MERF, a Japanese nonferrous-metal processor formerly known as Kurotani, has acquired California Metal-X (CMX) to expand its copper alloy bullion business in the U.S. The acquisition allows MERF to tap into the growing North American market for copper alloys, driven by the return of manufacturing to the U.S. under President Trump's policies. MERF distinguishes itself from U.S. competitors by its ability to handle a wide variety of scrap metals and produce diverse copper alloys. This enables MERF to lower procurement costs and expand its product offerings, including aluminum bronze and brass, while supporting U.S. manufacturing needs.
Nikkei Asia: https://asia.nikkei.com/Business/Materials/Japan-copper-processor-gains-toehold-in-U.S.-as-Trump-eyes-tariffs
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
