Weekly Japanese Industry and Policy News: 02 - 08 Nov 2024

The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.

 

Economic News

 

▶　Japan to issue new bonds backed by NTT stake to aid chip industry

02 Nov, 2024

The Japanese government plans to issue new bonds backed by its securities, including its stake in Nippon Telegraph and Telephone Corp., to support the country's semiconductor industry. The funds will help companies like Rapidus Corp., a government-backed chip venture, and will be part of an economic stimulus package expected this month. The move is in line with Japan's commitment to supporting the semiconductor and AI sectors through 2030. Taiwan Semiconductor Manufacturing Co., which is building plants in Japan, will also benefit. The bonds will be issued with collateral provisions to maintain fiscal discipline, as Japan faces the worst fiscal health among major developed economies.

 

Mainichi: https://mainichi.jp/english/articles/20241102/p2g/00m/0na/009000c

 

▶　Japan to help Romania generate green electricity destined for Ukraine

03 Nov, 2024

Japan and Romania plan to invest heavily in decarbonization projects, including renewable energy for local use and export to Ukraine. A joint statement will outline green investments, with funds from Romania’s energy ministries and Japan's NEDO. Projects include hydroelectric power and solar-fuel cell systems. Japan will also provide hydrogen production and carbon capture technologies. The deal aims to reduce Romania’s fossil fuel use and support Ukraine’s power grid amid Russian attacks. A Japanese delegation will visit Romania and Poland to advance the initiative.

 

Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japan-to-help-Romania-generate-green-electricity-destined-for-Ukraine

 

▶　Japan's manufacturers face earnings downturn as China economy slips

04 Nov, 2024

Japan's manufacturers saw slower earnings in the April-September period, as the Chinese economy weakened. For the first time in four years, more companies reported profit declines than increases. The automotive and materials sectors were particularly affected, with companies like Mitsubishi Motors and Koito Manufacturing seeing major profit drops due to weaker demand in China and rising costs. However, businesses tied to AI, such as Advantest and Nitto Denko, posted strong growth. The weaker yen helped some companies, but overall, profitability eroded. With uncertainty around the U.S. election and potential yen fluctuations, the earnings outlook remains uncertain.

 

Nikkei Asia: https://asia.nikkei.com/Business/Business-trends/Japan-s-manufacturers-face-earnings-downturn-as-China-economy-slips

 

▶　Prime Minister Ishiba and Minister of Economy, Trade and Industry Muto received the "Recommendations to APEC Leaders" from the APEC Business Advisory Council (ABAC).

05 Nov, 2024

On October 30 and November 5, Japan's members of the APEC Business Advisory Council (ABAC) presented the 2024 "Recommendations to APEC Leaders" to Minister Muto and Prime Minister Ishiba. ABAC, established in 1996, represents the business community in the Asia-Pacific and provides annual recommendations to APEC leaders. This year’s key proposals include advancing regional economic integration, supporting the WTO, accelerating paperless trade, promoting women’s access to the green economy, enhancing digital health data sharing, and encouraging private sector funding for energy transitions in emerging economies. These recommendations aim to strengthen cooperation within the APEC region.

 

METI: https://www.meti.go.jp/press/2024/11/20241106003/20241106003.html (Japanese)

 

 

▶ New EU-Japan partnership to take ties to ‘next level,’ envoy to Tokyo says

08 Nov, 2024

On Nov. 1, the EU launched its first security and defense partnership with Japan, aimed at enhancing cooperation in maritime security, cyber defense, counterterrorism, and countering hybrid threats. The partnership responds to growing concerns about the strategic alignment between China, Russia, and North Korea. Ambassador Jean-Eric Paquet emphasized the importance of deepening EU-Japan ties, which include expanding defense collaboration and exploring joint initiatives in areas like cybersecurity, defense industry, and maritime training with regional partners like the Philippines and Vietnam. The EU and Japan are also focused on economic and scientific cooperation, including semiconductors and clean energy. This partnership marks a significant step in securing the Indo-Pacific region, with future talks expected to cover broader areas like economic security and Horizon Europe research programs.

 

Japan Times: https://tinyurl.com/395vjav8

 

Business News

 

▶　Major Start-Up Support Center Station Ai Opens in Nagoya; ¥15.3 Bil. Facility Built to Bring Together Emerging Companies

01 Nov, 2024

Station Ai, one of the world’s largest start-up support centers, opened in Nagoya on Thursday. Built by the Aichi prefectural government at a cost of ¥15.3 billion, the seven-floor facility spans 23,600 square meters near Tsuruma Park. Operated by a SoftBank Corp. subsidiary, it aims to support both automobile industry start-ups and those developing new business models. At opening, it had about 500 start-ups and 200 partner companies, with plans to grow to 1,000 members within five years. The facility also features public restaurants and the Aichi Founders Museum, which highlights local entrepreneurs.

 

Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20241101-220058/

 

▶　Japan plans automated cargo transport system to relieve shortage of drivers and cut emissions

02 Nov, 2024

Japan is planning to create an automated cargo transport corridor between Tokyo and Osaka, known as the "conveyor belt road," to address a shortage of truck drivers. This system will feature automated, unmanned vehicles moving cargo along a dedicated lane in the middle of highways, aiming for full operations by the mid-2030s. The project, which will start test runs in 2027-2028, is designed to reduce driver workloads, mitigate labor shortages, and cut carbon emissions. Japan's trucking sector is facing a crisis due to new laws limiting driver overtime, expected to reduce transport capacity by 34% by 2030. The automated system may expand to other routes and be used for business deliveries, though last-mile deliveries may still require human drivers. The plan is part of efforts to address Japan's broader logistics challenges, including a rise in online shopping demand and a high rate of truck driver fatalities.

 

Mainichi: https://mainichi.jp/english/articles/20241102/p2g/00m/0bu/030000c

 

▶　Nissan, Mitsubishi to Establish Joint Venture for Level 4 Autonomous Driving Service; EV Batteries also Within Scope

04 Nov, 2024

Nissan Motor Co. and Mitsubishi Corp. plan to establish a joint venture by the end of fiscal 2024 to provide services related to self-driving cars and electric vehicles (EVs). The venture will offer autonomous transportation services using Level 4 self-driving technology and EV battery solutions for at-home energy storage. Testing will begin in 2025. Nissan is developing the autonomous vehicles, while Mitsubishi is focusing on AI-powered route optimization. The services will be launched in Yokohama and Namie, Fukushima. Additionally, the companies are exploring using EV batteries for home power storage and recycling used batteries. Nissan aims for ¥2.5 trillion in sales from autonomous driving and EV-related businesses by 2030, while Mitsubishi is investing in start-ups for autonomous driving software and EV battery projects.

 

Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20241104-220560/

 

▶　Japan launches flagship H3 rocket carrying defense satellite

04 Nov, 2024

Japan successfully launched its H3 rocket on Monday, carrying a Defense Ministry communications satellite. This marks the third consecutive successful launch of the H3 series, following a failed debut in 2023. The H3 rocket, developed by Japan Aerospace Exploration Agency and Mitsubishi Heavy Industries, is set to replace the H2A rocket after over 20 years of service. The satellite, positioned at an altitude of 36,000 km, will enhance communication capabilities for Japan's Self-Defense Forces. The launch, delayed several times since October, took place at the Tanegashima Space Center. Despite the success, Japan faces growing competition in the space industry, particularly from SpaceX.

 

Mainichi: https://mainichi.jp/english/articles/20241104/p2g/00m/0sc/040000c

 

▶　Suzuki unveils first mass-market electric vehicle  

05 Nov, 2024

Suzuki Motor Corp. has unveiled its first mass-produced electric vehicle, the e Vitara SUV, at an event in Milan. Set for release in Japan, Europe, and India around summer 2025, the model will also be supplied to Toyota under an OEM agreement. Developed in collaboration with Toyota and Daihatsu, the e Vitara offers excellent acceleration and a range of 400 km on a single charge. While the price has not been revealed, the vehicle is a key part of Suzuki's strategy to achieve carbon neutrality and expand in the global EV market.

 

Japan Times: https://www.japantimes.co.jp/business/2024/11/05/companies/suzuki-ev-mass-market/

Jiji: https://sp.m.jiji.com/english/show/36479

 

▶　Rapidus-linked group to send 200 engineers to US in chip push

06 Nov, 2024

A Japanese chip research group, including Rapidus Corp., announced it will send 200 engineers and students to the U.S. over the next five years for training in advanced semiconductor development. The trainees will work with U.S. chip venture Tenstorrent to study AI chip design. The program, lasting up to 1.5 years, aims to boost Japan's semiconductor expertise, as the country has fallen behind rivals like South Korea and Taiwan. Supported by the Japanese government and organizations like SoftBank and the University of Tokyo, the initiative will receive up to 7.5 billion yen ($49 million) in funding. Applications will open in March 2024.

 

Mainichi: https://mainichi.jp/english/articles/20241106/p2g/00m/0bu/015000c

 

▶　NEC and NEC Bio publish foundational work on T Cell Receptor engineering using proprietary generative AI at the Society for Immunotherapy of Cancer annual meeting

07 Nov, 2024

NEC Bio has leveraged its proprietary generative AI technology to engineer T cell receptors (TCRs) with increased efficacy, a significant advancement in cancer immunotherapy and personalized medicine. This innovation addresses the challenge of identifying TCR sequences that specifically bind to target cancer cells, a traditionally labor-intensive process. The technology, presented at the 39th Annual Meeting of the Society for Immunotherapy of Cancer (SITC) in Houston, utilizes AI-driven large language models to generate novel, high-affinity TCRs based on machine learning insights. The AI-designed TCRs demonstrated enhanced activity in cell-based assays. NEC Bio plans to expand this technology to design TCRs for various cancer targets, antibodies, and other therapeutic biomolecules, reinforcing its commitment to transforming drug development with AI.

 

NEC: https://www.nec.com/en/press/202411/global_20241107_01.html

 

▶　Japan's SMC gets ahead by delivering robot parts speedily

07 Nov, 2024

SMC, a leader in pneumatic parts, has reached a market capitalization of 4 trillion yen by focusing on ultra-fast deliveries of general-purpose components. While dominant in Japan and North America, it aims to grow its market share in Europe. SMC plans to boost sales to 1 trillion yen by 2027, with major investments in Vietnam to reduce labor costs and enhance production. It also plans to expand R&D into new areas like medicine. Despite facing competition from low-cost rivals, SMC’s high profit margins are driven by its quick delivery model, though it manages risks related to inventory turnover.

 

Nikkei Asia: https://asia.nikkei.com/Business/Companies/Japan-s-SMC-gets-ahead-by-delivering-robot-parts-speedily