The Centre quarterly newsletter, December 2024 issue, is out!
In this issue:
Call for…
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ AIST test facility more efficiently recycles CO2 into liquid synfuel
25 Jan, 2025
Researchers in Japan have developed a more efficient method to produce liquid synthetic fuel from carbon dioxide (CO2) and water, a step toward a decarbonized society. The experimental facility, set up by AIST and JPEC, reduces electricity consumption and minimizes by-product waste, improving the production process. The synthetic fuel, with the same energy density as fossil fuels, can be used in power stations, vehicles, and other industries. The facility, located at AIST’s Tsukuba Center, is already producing fuel at a rate of 200 milliliters per hour and could lead to a larger pilot plant in the future.
Asahi: https://www.asahi.com/ajw/articles/15558576
▶ Japan to join U.S.-led space telescope project in search for life
27 Jan, 2025
Japan is considering joining NASA's "Habitable Worlds Observatory" project, set to launch in the 2040s, to search for Earth-like planets and extraterrestrial life. The initiative will involve a large-scale space telescope that observes wavelengths like ultraviolet and X-rays. Japan plans to contribute technology, including observation equipment and remote maintenance tools, leveraging expertise from the Subaru Telescope. Joining the project would enhance Japan's role in global space science and provide priority access to key research opportunities.
▶ Study Group on Green Steel for Green Transformation (GX)/ METI
29 Jan, 2025
The Study Group on Green Steel for Green Transformation (GX) held meetings from October 2024 to January 2025, discussing the steel industry's role in achieving carbon neutrality. Key points include the need to decarbonize the steel sector, particularly through transitioning from traditional blast furnaces to greener technologies. The group emphasized the importance of visualizing the "GX value" of decarbonization investments and expanding the use of Carbon Footprint of Products (CFP) for steel. It also highlighted the need for both demand-side support (such as government procurement) and supply-side initiatives (including technology investments) to drive the green steel transition. International collaboration and the development of global standards were also seen as crucial.
METI (Summary/Japanese): https://www.meti.go.jp/shingikai/mono_info_service/green_steel/pdf/20250123_1.pdf
METI (Full version/Japanese): https://www.meti.go.jp/shingikai/mono_info_service/green_steel/pdf/20250123_2.pdf
▶ Japanese ministry opens door to taboo corporate takeovers
29 Jan, 2025
In 2023, Japan’s industry ministry allowed nonconsensual takeover bids, breaking from the traditional practice of behind-the-scenes negotiations. Companies like Dai-ichi Life and Nidec made unsolicited bids, sparking concerns among corporate management. The rise in such bids is driven by shareholder pressure for better capital efficiency, and M&A activity in Japan hit a record high in 2024, with more expected.
Japan times: https://www.japantimes.co.jp/business/2025/01/29/companies/corporate-takeovers-guidelines/
▶ Japan's Ishiba aims for resource partnerships with Central Asia outreach
30 Jan, 2025
Japanese Prime Minister Shigeru Ishiba is advancing his resource diplomacy agenda through a 10-day tour of Central Asia by his senior adviser, Akihisa Nagashima. The trip aims to enhance partnerships with local countries like Uzbekistan, Kazakhstan, and others to secure key minerals and energy resources. Japan seeks to leverage its private sector’s technology in extraction and refining, particularly in uranium and electronics metals. The emphasis on resource diplomacy is tied to Japan’s economic security and the broader geopolitical context, as Central Asia lies between Russia and China. Ishiba has also been working to strengthen supply chains for materials like copper and zinc through international cooperation.
Nikkei Asia: https://asia.nikkei.com/Politics/International-relations/Japan-s-Ishiba-aims-for-resource-partnerships-with-Central-Asia-outreach
Business News
▶ Nippon Life to revamp overseas business operations after acquisitions
27 Jan, 2025
Nippon Life Insurance is reorganizing its overseas operations to better manage risks from its recent acquisitions. A new headquarters division will be created in late March to oversee foreign businesses, integrating the overseas insurance, asset management, and planning departments. The move follows the company's significant expansion abroad, including nearly ¥2 trillion ($13 billion) spent on acquisitions like U.S. firms Resolution Life, Corebridge Financial, and TCW Group. The reorganization aims to strengthen management systems and prevent issues similar to those faced after the acquisition of Australian insurer MLC in 2016.
Japan times: https://www.japantimes.co.jp/business/2025/01/27/companies/nippon-life-reorganization-overseas/
▶ Japan Firm Begins Testing Self-Driving Service in Tokyo’s Odaiba District; Passengers Can Reserve Rides Free of Charge Through App
26 Jan, 2025
Testing has started on a free self-driving transport service in Tokyo's Odaiba district, provided by Monet Technologies, a joint venture including Toyota and SoftBank. The service, operating on weekdays from 10 a.m. to 4 p.m., uses two Toyota Sienna minivans on a fixed route, with reservations required via an app. The initiative aims to raise awareness and gather data for future commercialization. Passengers can board at four locations, including Tokyo Big Sight and Tokyo Teleport Station, until mid-March.
Yomiuri: https://japannews.yomiuri.co.jp/science-nature/technology/20250126-235143/
▶ Sustainable Shared Transport and Fujitsu launch open platform for joint transportation and delivery in Japan, enhancing logistics efficiency across industries
27 Jan, 2025
Sustainable Shared Transport Inc. (SST), a joint venture between Yamato Holdings and Fujitsu, will launch a new transportation and delivery service in Japan on February 1, 2025. The platform aims to optimize logistics by matching shippers and logistics providers for trunk transport using standardized pallets and digital information exchange. SST's service focuses on improving efficiency, reducing empty mileage, and enhancing driver conditions. The platform uses Fujitsu's blockchain technology for secure data sharing and complies with Japan's Smart Logistics Service guidelines. Future plans include expanding services to include rail and sea freight, with a goal of 80 routes by March 2026.
Fujitsu: https://www.fujitsu.com/global/about/resources/news/press-releases/2025/0127-01.html
▶ Sumitomo Chemical cuts LCD material output capacity amid China's rise
27 Jan, 2025
Sumitomo Chemical will reduce its production capacity for polarizing film used in LCD panels due to the rise of Chinese manufacturers in the market. The company will sell its Chinese subsidiaries and withdraw from production in South Korea, repurposing the site for OLED products. Once a leader in polarizing film, Sumitomo's market share dropped to 9% in 2023, down from 16% in 2022. As part of its pullback, Sumitomo will cut its production capacity by 70% and expects the market for polarizing film for large LCDs to decline significantly over the next decade. Other Japanese companies, like AGC and DIC, are also scaling back in the liquid crystal sector.
Nikkei Asia : https://asia.nikkei.com/Business/Electronics/Sumitomo-Chemical-cuts-LCD-material-output-capacity-amid-China-s-rise
▶ Indian company orders 50 ‘flying cars’ from Aichi-based SkyDrive
29 Jan, 2025
SkyDrive Inc., a Japanese venture, announced that Indian private jet operator JetSetGo Aviation has pre-ordered 50 of its flying cars, with support from shareholder Suzuki Motor Corp. The companies plan to launch a flying car business in Gujarat, India. SkyDrive's small electric aircraft, an eVTOL, is still in development, with plans for type approval in 2026. The company will showcase the aircraft in demonstration flights at the 2025 Osaka-Kansai Expo. SkyDrive has received 323 pre-orders globally, including from Japan, the U.S., South Korea, and Vietnam. Suzuki has supported SkyDrive's development, including manufacturing prototypes at its Iwata factory.
Asahi: https://www.asahi.com/ajw/articles/15604514
▶ Australian carbon recycling startup lures Japanese investors
29 Jan, 2025
Australian startup MCi Carbon is focusing on Japanese partnerships to commercialize its decarbonization technology. The company has secured a $5 million investment from Mitsubishi Ube Cement and has three other major Japanese investors. MCi's technology converts industrial waste like concrete and steel slag into materials for cement production by bonding them with carbon dioxide, thus reducing emissions. The startup plans to set up plants near manufacturing facilities to directly refine gases, which distinguishes it from competitors. MCi is also collaborating with companies in Austria and Japan, with plans to build a plant in Japan soon.
▶ SoftBank in talks to invest up to $25 billion in OpenAI
30 Jan, 2025
SoftBank Group is in early discussions to invest between $15 billion and $25 billion in OpenAI, which could make it the AI startup's largest backer. This investment would complement SoftBank’s $15 billion commitment to Project Stargate, a joint venture with OpenAI to build AI infrastructure. SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman have long collaborated on AI development, with plans to invest up to $500 billion over four years in the project. However, the venture has faced skepticism from industry figures like Elon Musk regarding its financing and details.
Japan times: https://www.japantimes.co.jp/business/2025/01/30/companies/softbank-open-ai-investment/
▶ MHI’s expanding space business
30 Jan, 2025
Mitsubishi Heavy Industries (MHI) overcame a setback in March 2023 when a malfunction halted the first launch of Japan's H3 rocket. After modifications, the H3 successfully launched in February 2024 and is now fully operational. The H3 is designed to carry heavier payloads at lower costs, and MHI plans to make it reusable by the 2030s to compete with companies like SpaceX. MHI is also involved in space station development, lunar exploration, and the commercialization of space. While the space division is small, it enhances MHI’s brand, technology, and long-term vision for humanity's future in space.
Mitsubishi Heavy Industries (MHI) Group:
https://spectra.mhi.com/the-final-frontier-mhis-expanding-space-business
▶ Sojitz Acquires Energy Efficient HVAC Provider and Mechanical Service Contractor in Australia
30 Jan, 2025
Sojitz Corporation has acquired a 70% stake in Australia's Climatech Group Holdings through its subsidiary, Ellis Air Group, making Sojitz a leading HVAC (Heating, Ventilation and Air Conditioning) contractor in the country. The acquisition, which combines Climatech’s expertise in HVAC design, construction, and maintenance with Ellis Air’s operations, aims to meet rising demand for energy-efficient building solutions in Australia. With a growing market, particularly for commercial buildings and data centers, Sojitz plans to leverage this partnership to enhance its energy solutions, reduce CO2 emissions, and contribute to a net-zero society. Australia's HVAC market is expected to grow annually by 6%, reaching AUD 74 billion by 2033.
Sojitz: https://www.sojitz.com/en/news/article/20250130.html
▶ Trump tariffs shake Asian carmakers' Mexico production strategies
30 Jan, 2025
U.S. President Donald Trump's threat to impose tariffs on imports from Mexico, if he follows through, has automakers -- from Japan's Nissan Motor and South Korea's Kia to America's General Motors and Ford Motor -- scrambling to reconsider their production and sales strategies. Of the top 10 carmakers in terms of vehicle exports from Mexico to the U.S., five were Asian. Among the five Asian companies, Nissan exported the most along this route and is likely to be the most affected if the tariffs go ahead as threatened on Saturday. The company in 2024 exported 326,600 vehicles from Mexico to the U.S., equivalent to 35% of the 924,000 automobiles Nissan sold in the U.S. that year.
Nissan has multiple factories in Mexico, where it started production in the 1960s. North America, including the U.S., accounts for around 40% of the 3.4 million vehicles Nissan expects to sell in the financial year ending in March. Data shows that Mazda Motor, which started operating its factory in Mexico in 2014, imports from Mexico around 27% of the cars it sells in the U.S. Honda Motor at 15%, Hyundai Motor Group at 10% and Toyota Motor at 10% were relatively less dependent on their Mexican factories. This is partially due to how these companies organize their cost structures, supply chains and logistics.
The U.S., with annual sales of nearly 16 million units, is an essential market for automakers. To feed U.S. demand and lower labor costs, carmakers have invested in Mexico. The move was accelerated by the North American Free Trade Agreement (NAFTA), which came into effect in 1994 and was later modified as the current U.S.-Mexico-Canada Agreement (USMCA). According to Mexico's National Institute of Statistics and Geography, car production in the country reached 3.98 million units in 2024, up 5.6% from the previous year. Around 90% of all production was exported, mainly to the U.S. and Canada. For manufacturers selling cars in the U.S., Mexico has become integral to their production ecosystems. Therefore, large tariffs would negatively affect Mexico's exports and carmakers' business performances. This holds for American automakers as well.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Trump-tariffs-shake-Asian-carmakers-Mexico-production-strategies
▶ Japan's Takeda names 1st female CEO in leadership
31 Jan, 2025
Takeda CEO Christophe Weber will step down in June 2026, with Julie Kim set to become the company’s *first* female CEO. Kim, currently head of Takeda's U.S. business, has been with the company since its 2019 Shire acquisition. Under Weber’s leadership, Takeda grew into a global biopharmaceutical leader. The board has unanimously approved Kim's appointment.n, 2025.
Nikkei Asia: https://asia.nikkei.com/Business/Pharmaceuticals/Japan-s-Takeda-names-1st-female-CEO-in-leadership-change
▶ Mitsubishi Chemical's U.S. plant project scrapped due to high costs
Although Mitsubishi Chemical Group had planned to build a new U.S. plant for more than a decade, the Japanese manufacturer ultimately walked away from the project due to ballooning costs and a scarcity of clients. The U.S. project was dubbed Alpha 3, because it would be the third site to produce methyl methacrylate using the company's patented Alpha technology, following Singapore and Saudi Arabia. Methyl methacrylate, or MMA, is a compound used in a wide variety of goods, such as headlight covers on cars. Mitsubishi Chemical controls the top global market share, at roughly 30%. The Alpha production process is simpler than the alternatives and produces less greenhouse gases, using ethylene, methanol and carbon monoxide as raw materials.
Because ethylene can be procured in the U.S. from low-cost shale gas, Mitsubishi Chemical expected an MMA operation there to generate stable earnings, since it would be relatively immune from the impact of Chinese rivals expanding capacity. But in 2022, Mitsubishi Chemical put the final decision to invest in the plant project on hold in response to a deteriorating market and higher construction costs. Earlier this month, the company announced it had terminated the investment plan.
Nikkei Asia: https://asia.nikkei.com/Business/Materials/Mitsubishi-Chemical-s-U.S.-plant-project-scrapped-due-to-high-costs
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
