Weekly Japanese Industry and Policy News: 15 Mar - 21 Mar,2025
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Japan to invite small businesses to declare ¥10 billion sales targets
15 Mar, 2025
The Japanese government is inviting small and midsize businesses with annual sales between ¥1 billion and ¥10 billion to declare sales targets of ¥10 billion or more starting in fiscal 2025. The initiative, led by the Small and Medium Enterprise Agency, aims to support growth and regional economies. Companies that participate will receive subsidies for capital investment, with up to ¥500 million available for factory improvements. The government also plans to offer tax incentives and networking events for business managers. The goal is to promote the growth of small businesses, especially in rural areas, to support regional revitalization.
Japan times: https://www.japantimes.co.jp/business/2025/03/15/companies/small-businesses-sales-targets/
▶ Astronaut Onishi blasts off on mission as 3rd Japanese to lead ISS
15 Mar, 2025
Akiya Onishi and three crew members launched on a SpaceX rocket from Florida to the International Space Station (ISS) on Friday. Onishi, a former All Nippon Airways pilot, is making his second trip to the ISS and will serve as the commander, becoming the third Japanese astronaut to lead a mission. During the mission, the crew will conduct experiments on carbon dioxide removal technology, essential for the Gateway space station that will orbit the Moon. Originally scheduled for late March, Onishi's departure was brought forward due to a delay caused by a defect in a previous spacecraft, which stranded two U.S. astronauts on the ISS for about nine months. Onishi will spend six months in space.
Mainichi: https://mainichi.jp/english/articles/20250315/p2g/00m/0na/005000c
▶ Japan foreign population grows twice as fast as expected on worker influx
15 Mar, 2025
The number of foreign residents in Japan reached a record high of 3.77 million in 2024, growing by 10.5% from the previous year, with significant increases in talent from South and Southeast Asia. Much of the rise is due to work-related immigration, particularly under the specified skilled worker program. Vietnam, Nepal, Myanmar, Sri Lanka, and Indonesia were the top countries contributing to this growth. Despite concerns about the weak yen, Japan's labor shortage continues to drive demand for foreign workers, especially in industries like construction, nursing, and manufacturing. The government has also expanded programs to support foreign nationals, including consultation centers and language education. However, experts urge swift action to create an intercultural, cohesive society.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Japan-immigration/Japan-foreign-population-grows-twice-as-fast-as-expected-on-worker-influx
▶ U.S.-China trade war pushes Japan firms to rethink supply chains: KPMG
15 Mar, 2025
A KPMG Consulting survey found that 27% of Japanese companies are considering reducing their reliance on Chinese supply chains amid the renewed U.S.-China trade tensions. This comes after U.S. President Donald Trump imposed tariffs on Chinese imports, raising concerns about further decoupling between the U.S. and China, as well as China's economic slowdown. The survey revealed that 52.9% of respondents were worried about the possibility of universal tariffs, while 36% feared higher tariffs on China. The survey, conducted between January 7 and February 21, received responses from 176 companies.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Supply-Chain/U.S.-China-trade-war-pushes-Japan-firms-to-rethink-supply-chains-KPMG
▶ Japan Consortium Sets Targets for Use of Recycled Plastic in New Cars; Aims for Compliance with Draft EU Regulation
16 Mar, 2025
A consortium of industry, government, and academia in Japan aims to use over 15% recycled plastic in car production by 2031, with a target of over 20% by 2036. This initiative responds to new European Union regulations set for 2031 and focuses on enhancing domestic plastic recycling for economic and resource security. The consortium includes the Japan Automobile Manufacturers Association and other organizations, with plans to support investment, tests, and a recycling supply chain. The supply of recycled plastic from end-of-life vehicles (ELVs) is expected to increase significantly by 2031, with further growth by 2041. This plan is also designed to help meet EU regulations requiring 20% recycled plastic in car manufacturing by 2031.
Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20250317-243785/
▶ Japan gov't to support domestic cybersecurity firms
16 Mar, 2025
The Japanese government plans to promote the growth of its domestic cybersecurity industry to reduce reliance on foreign companies. Starting in April, the government aims to more than triple domestic cybersecurity sales to over 3 trillion yen ($20.2 billion) within 10 years. The Ministry of Economy, Trade, and Industry emphasizes the need for domestic capabilities to assess cyber threats and develop preventative products. The government will support local startups through contracts and research contests to strengthen the industry and address the current lack of investment in domestic cybersecurity products.
Mainichi: https://mainichi.jp/english/articles/20250316/p2g/00m/0na/018000c
▶ IPC Awarded the EPC Contract for LNG Storage Tanks at Kaohsiung Intercontinental Terminal
17 Mar, 2025
IHI Plant Services Corporation (IPC), in partnership with CTCI Corporation, has been awarded an EPC contract by CPC Corporation, Taiwan’s state-owned petroleum company, to build four LNG cryogenic tanks at the CPC Kaohsiung Intercontinental LNG Terminal. The tanks, each with a capacity of 180,000 kiloliters, will enhance Taiwan’s LNG storage and transport capabilities, supporting the nation’s goal to diversify its energy sources and achieve net-zero emissions. The project is scheduled for completion by late 2030.
IHI: https://www.ihi.co.jp/en/all_news/2024/resources_energy_environment/1201300_13691.html
▶ Alaskan officials to seek investors in Japan as Trump touts LNG
17 Mar, 2025
Alaskan state representatives will visit Japan this month to promote a $44 billion natural gas project, aiming to transport natural gas via a 1,300-km pipeline from Alaska to Japan, South Korea, and Taiwan. While President Trump is pushing for support from Asian allies, Japanese energy firms remain skeptical, citing high costs and feasibility concerns. Key potential investors, including Inpex Corp and major Japanese trading firms, have yet to commit to the project. Despite this, diplomatic pressure on Japan to reduce its trade deficit with the U.S. and purchase American LNG is expected to grow.
Asahi: https://www.asahi.com/ajw/articles/15672039
▶ As Trump eyes reciprocal tariffs, Japan's red tape draws fire
19 Mar, 2025
American businesses have highlighted Japanese digital regulations and other nontariff barriers as major trade obstacles ahead of U.S. President Trump’s announcement of reciprocal tariffs on April 2. The American Chamber of Commerce in Japan (ACCJ) cited issues like Japan's auto safety standards, biopharmaceutical pricing policies, cloud security regulations, and advertising restrictions. The ACCJ also criticized the Smartphone Software Competition Promotion Act for unfairly targeting U.S. tech companies. The Trump administration plans to impose sector-specific tariffs, with an expected 25% tariff on imported automobiles, and may implement one tariff rate per country. There are concerns that these measures could hurt exports and pressure Japan to delay the smartphone software law's implementation.
Nikkei Asia: https://asia.nikkei.com/Economy/Trade-war/As-Trump-eyes-reciprocal-tariffs-Japan-s-red-tape-draws-fire
▶ Japan, Brazil Plan to Agree on Regular Leaders’ Visits; Ishiba and Lula Will Also Establish Dialogue between Foreign Ministers
19 Mar, 2025
Japan and Brazil are finalizing an agreement for reciprocal biennial visits between their leaders to strengthen bilateral ties. Brazilian President Lula’s upcoming state visit to Japan will be the first of its kind in six years. The two countries are expected to establish a strategic foreign ministers’ dialogue to address international challenges, security cooperation, and climate change. They will also create an action plan focusing on politics, security, economics, investment, and climate. Brazil will share expertise on UN peacekeeping, and Japan aims to strengthen ties to counterbalance China's influence in Brazil. Lula is set to receive Japan’s prestigious Grand Cordon of the Supreme Order of the Chrysanthemum.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250319-244105/
▶ Japan automakers on brink of extended slump as Trump tariffs loom
20 Mar, 2025
Japan's seven major automakers are facing a prolonged period of profit decline due to increasing U.S. competition and rising expenses. In the October-December quarter, combined profits dropped 25% year-on-year, with five of the seven automakers reporting a decrease. While sales rose 3% to 25 trillion-yen, global unit sales fell by 2%. Profitability is being squeezed by higher sales incentives in the U.S. and rising development and labor costs, especially for electric vehicles (EVs). Additionally, the industry's reliance on the North American market, combined with increasing expenses, is contributing to the downturn. The automakers' profits are expected to continue declining into the coming quarters. Trade tariffs proposed by the U.S. could exacerbate these challenges, with Nissan and Mazda particularly vulnerable due to their reliance on exports from Mexico and Japan.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Japan-automakers-on-brink-of-extended-slump-as-Trump-tariffs-loom
▶ Fresh from IPO, Japan's JX Advanced Metals aims for new start as chip sector stock
20 Mar, 2025
JX Advanced Metals, which recently debuted on the Tokyo Stock Exchange, gained 3% on its first session, closing at 874 yen with a market cap of 810 billion yen. Previously a subsidiary of Eneos Holdings, JX Advanced Metals is shifting focus from resources and smelting to semiconductor materials. The company holds a 60% market share in sputtering targets used in semiconductor manufacturing. It plans to invest 150 billion yen in a new plant to defend its market share. JX Advanced Metals aims to increase its profits in chip materials to 200 billion yen by 2040. Eneos, the parent company, plans to invest IPO proceeds in sustainable aviation fuel and biofuels.
▶ Japan offers up to 13.7 bil. yen loans for Bhutan's hydropower plants
20 Mar, 2025
Japan has agreed to provide up to 13.7 billion yen ($90 million) in loans for a hydropower plant project in Bhutan. The project, which involves constructing three hydropower stations near India’s border, is set to begin in May and is expected to finish by 2029. The plants aim to help Bhutan stabilize its energy supply, particularly during dry seasons, and increase power exports to India. This is Japan's first support for Bhutan’s hydropower sector and aligns with Japan's efforts to strengthen ties with the country, enhance its economic development, and promote regional decarbonization.
Kyodo: https://english.kyodonews.net/news/2025/03/8a6be610f223-japan-offers-up-to-137-bil-yen-loans-for-bhutans-hydropower-plants.html
▶ Japan's JERA to shut coal plants during off-season to cut carbon
21 Mar, 2025
Japanese energy company JERA plans to begin shutting down some coal-fired power plants during low-demand seasons starting in fiscal 2026, aiming to reduce carbon emissions. The company will initially close plants with high emissions, like the Hekinan power station, and will use liquefied natural gas to fill the energy gap during high demand. JERA, Japan's largest coal power producer, plans to phase out inefficient coal plants by 2030. This move follows J-Power's trial of adjusting coal plant operations based on demand. Despite coal's lower generation costs, rising coal prices and environmental concerns are pushing Japan to rethink its reliance on coal, with the fuel contributing to about 30% of Japan’s electricity generation.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japan-s-JERA-to-shut-coal-plants-during-off-season-to-cut-carbon
Business News
▶ Nissan demonstrates self-driving cars in Yokohama traffic
15 Mar, 2025
Nissan Motor Co. recently tested its self-driving vehicles on the streets of Yokohama, marking the first time autonomous cars have traveled in ordinary city traffic in Japan. The test involved modified Nissan Serena minivans equipped with 29 cameras, navigating intersections and obeying traffic rules while traveling a 4-kilometer route. The vehicles are classified as Level 2 automation, meaning they can steer and accelerate but still require human intervention. Nissan plans to offer public rides in Yokohama later this year and expand tests to other regions by fiscal 2027. The company also aims to develop Level 4 autonomous vehicles by 2027.
Kyodo: https://english.kyodonews.net/news/2025/03/072b5b98650a-nissan-demonstrates-self-driving-cars-in-yokohama-traffic.html
▶ Panasonic forms the first*1 capital and business alliance with tado°, an IoT-based home energy management platform provider, as a heating equipment manufacturer
17 Mar, 2025
Panasonic Corporation has entered a €30 million partnership with tado° GmbH, a leader in home energy management solutions, to collaborate on reducing CO2 emissions and global warming. Panasonic will leverage its expertise in air-to-water (A2W) heat pumps, which use ambient air to produce hot water, significantly reducing CO2 emissions compared to fossil fuel-based systems. The partnership will optimize energy use by integrating Panasonic’s Aquarea Heat Pumps with tado°'s Smart Thermostats and Heat Pump Optimizer, potentially reducing energy consumption by up to 30%. This collaboration aims to accelerate innovation in energy-efficient solutions and contribute to a sustainable global environment.
Panasonic: https://news.panasonic.com/global/press/en250317-3
▶ The first passenger bus in the Tokai region to use the next-generation biofuel “Idemitsu Renewable Diesel” on public roads will begin operation in Aichi Prefecture on April 1
17 Mar, 2025
Idemitsu Kosan, Meitetsu Bus, and Meitetsu Area Partners are launching a trial using Idemitsu’s renewable diesel (IRD) in a passenger bus route in Japan starting April 1, 2025. IRD, a carbon-neutral biofuel, reduces CO2 emissions by 100% compared to diesel. The trial will help verify IRD's performance and contribute to reducing CO2 emissions by 69 tons annually, promoting environmentally friendly transport solutions. This marks the first public road use of IRD in Japan.
Idemitsu（Japanese）: https://www.idemitsu.com/en/index.html
▶Honda to procure batteries for hybrids from Toyota's U.S. plant
17 Mar, 2025
Honda Motor will begin procuring hybrid vehicle (HV) batteries from Toyota's U.S. plant starting in fiscal 2025, as a response to President Trump's tariffs. Honda's move is part of a broader effort by Japanese automakers to create new supply chains. With rising tariffs on imports from Japan and China, Honda aims to restructure its supply chain, shifting some production to the U.S. Honda's U.S. HV sales reached 308,000 in 2024, and the company plans to increase global HV sales by 50% by 2030. Toyota is also expanding its electric and hybrid vehicle production, investing in a $14 billion battery plant in North Carolina. This shift in the automotive industry comes as global automakers adjust their supply chains due to changing tariffs and policies.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Honda-to-procure-batteries-for-hybrids-from-Toyota-s-U.S.-plant
▶ Mazda unveils new EV strategy as industry transforms
18 Mar, 2025
Mazda plans to launch an electric vehicle by 2027, reducing its battery development budget and partnering with Changan Automobile to cut costs. The company will invest 1.5 trillion yen in electrification by 2030. Mazda’s strategy includes a flexible production system to lower capital investment and production time. To handle increasing software development, Mazda will collaborate with Toyota, Denso, and others. This approach contrasts with larger automakers like Toyota and Honda, which are making massive investments in electrification.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Electric-vehicles/Mazda-unveils-new-EV-strategy-as-industry-transforms
▶ Japan's new gigacasting factory seeks to cut costs for EV builders
18 Mar, 2025
Ryobi, a major Japanese automaker supplier, has completed a 3,400-square-meter factory in Shizuoka to produce electric vehicle (EV) body parts using gigacasting, a cost-saving technique pioneered by Tesla. The facility, with a 5 billion yen ($33.5 million) investment, will provide contract prototyping services and manufacture auto body parts and battery cases. Gigacasting reduces the number of components by creating large modules from aluminum alloy, saving time and money. Ryobi plans to expand into mass production and is considering U.S. and international facilities. While targeting Japanese automakers, Ryobi is also exploring opportunities in other sectors like construction. The company aims to boost its die-casting business profits by 50% by 2027.
▶ Japan's Mitsubishi UFJ to Leave Int'l Decarbonization Group
19 Mar, 2025
Japan's Mitsubishi UFJ Financial Group has decided to withdraw from the Net-Zero Banking Alliance, an international group of banks focused on decarbonizing operations. This move follows similar exits by major U.S. financial institutions after the launch of President Donald Trump's administration, which reversed the country's climate change policies.
Jji: https://jen.jiji.com/jc/eng?g=ind&k=2025031900505
▶ Hydrogen-powered vending machine to debut at Osaka Expo
19 Mar, 2025
At the Osaka Kansai Expo, visitors can use the world’s first hydrogen-cartridge powered vending machine, installed on March 18. Developed by Coca-Cola Bottlers Japan and Fuji Electric, the machine generates electricity through a chemical reaction of oxygen and hydrogen, producing zero carbon emissions and using half the energy of a regular vending machine. It can be placed in locations without electrical sources, with hydrogen cartridges replaced regularly. While Coca-Cola has not yet decided on broad commercial use due to higher costs and space requirements, the machine is part of a larger effort to address heatstroke during the summer, with an expected sales volume of 1,000 bottles per day per machine.
Asahi: https://www.asahi.com/ajw/articles/15675115
▶ Japan's Iwatani exits Australia green hydrogen project
19 Mar, 2025
Iwatani will withdraw from a green hydrogen project in Queensland, Australia, following exits from other companies and the state government due to growing challenges in decarbonization efforts. The project aimed to produce 70,000 tonnes of green hydrogen annually by 2028, with some hydrogen intended for Japan. However, high production costs and the need for public subsidies have made it difficult to sustain. Iwatani, a leader in hydrogen supply for industrial use in Japan, had invested heavily in the hydrogen supply chain but now faces difficulties as the hydrogen business remains unprofitable without government support. Other companies, like Kawasaki Heavy Industries, are also scaling back hydrogen projects.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japan-s-Iwatani-exits-Australia-green-hydrogen-project
▶ Toyota's Hino Motors pleads guilty to U.S. emissions fraud, fined $1.6 billion
20 Mar, 2025
Hino Motors, a subsidiary of Toyota, pleaded guilty to a multiyear emissions fraud scheme in the U.S. and was fined $1.6 billion by the U.S. Justice Department. The company admitted to falsifying emissions data and submitting false engine certification applications for over 105,000 vehicles between 2010 and 2022. Hino was fined $521.76 million and sentenced to five years of probation, during which it cannot import its diesel engines into the U.S. The settlement also includes a $155 million program to offset air emissions and a recall program costing $144.2 million. This follows similar admissions of wrongdoing by other automakers, including Volkswagen's 2015 emissions scandal.
Japan times: https://www.japantimes.co.jp/business/2025/03/20/companies/hino-emissions-fraud/
▶ SoftBank Group to buy Ampere Computing in $6.5bn deal
20 Mar, 2025
SoftBank Group has agreed to acquire U.S. chip startup Ampere Computing for $6.5 billion in an all-cash deal. This move accelerates SoftBank's focus on AI and chip technology, following other major investments in AI infrastructure, including OpenAI and the Stargate project. Ampere, founded by former Intel president Renee James, specializes in data center CPU chips based on technology from SoftBank's Arm Holdings. The deal also involves Oracle and Carlyle Group selling their stakes in Ampere. While SoftBank's track record with some investments has been mixed, the acquisition reinforces its commitment to AI innovation and semiconductor technology.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/SoftBank-Group-to-buy-Ampere-Computing-in-6.5bn-deal
▶ Self-driving buses tested to alleviate bus driver shortages
20 Mar, 2025
A self-driving bus demonstration in Tokyo's Komae city in December showcased Level 4 autonomous technology. The bus, equipped with cameras and sensors, completed a 4.1-kilometer route with minimal human intervention. This test is part of Japan's efforts to address bus driver shortages and population growth. Local governments are exploring autonomous buses as a solution, with Tokyo aiming for unmanned transport services by 2025. However, challenges like safety, costs, and infrastructure remain.
Asahi: https://www.asahi.com/ajw/articles/15643054
▶ Foxconn closing in on EV collaboration with Mitsubishi: sources
20 Mar, 2025
Foxconn is close to finalizing a deal with Mitsubishi Motors to collaborate on electric vehicles (EVs), marking a significant step in its yearslong effort to expand into the EV industry. The collaboration would help Foxconn prove its EV capabilities and attract more automaker clients. Discussions have been ongoing for over six months. Foxconn has also shown interest in investing in Nissan, exploring a potential stake acquisition through its French shareholder, Renault. Despite challenges in the EV market, Foxconn continues to pursue its goal of becoming a viable EV maker by 2025, partnering with companies like Yulon Motor and launching electric buses in Taiwan. However, its previous collaborations with auto startups have not yielded significant results.
▶ Block chain: Japan's All Nippon Airways recycles plane tire chocks into keychains
21 Mar, 2025
All Nippon Airways (ANA) has repurposed worn-out wooden chocks, used to secure aircraft tires, into tags and keychains as part of a decarbonization initiative. The chocks, which are discarded annually due to wear, are transformed into items like airline ticket-shaped tags and runway-themed keychains. The project was proposed by Keisuke Nakamura and his team, aiming to recycle these safety tools. A total of 600 items were created for ANA’s community and recruitment activities. The team hopes these items will serve as meaningful keepsakes, symbolizing the support the chocks provide to air travel.
Mainichi: https://mainichi.jp/english/articles/20250319/p2a/00m/0bu/011000c
▶ Space startup firm closer to removing debris from orbit
21 Mar, 2025
Astroscale Japan Inc., a Tokyo-based startup developing space debris removal technologies, successfully approached a piece of orbital debris from a distance of about 15 meters. The company plans to begin removing space junk by the end of March 2028. This mission marks a significant step toward their goal of offering "space road services," including satellite refueling. Space debris, which includes retired satellites and broken rocket bodies, poses a growing risk to space operations. Astroscale, commissioned by JAXA, launched a satellite in February 2024 to demonstrate debris removal technologies, successfully approaching and inspecting an H-IIA rocket's upper stage. The next phase will involve capturing debris with a robotic arm and bringing it back to Earth.
Asahi: https://www.asahi.com/ajw/articles/15652616
▶ Mitsui Fudosan eyes science park near TSMC's Japan fab: CEO
21 Mar, 2025
Mitsui Fudosan, a Japanese real estate developer, is considering building a chip-focused science park in Kumamoto, a growing technology hub in Japan. The park would involve university partners from Taiwan, which has experience with similar projects, and aim to bring together chip-related companies and research institutions. The Kumamoto government is also pursuing a similar initiative, and Mitsui Fudosan plans to coordinate with them. Taiwan Semiconductor Manufacturing Co. recently began production at its first Japanese facility in Kumamoto, with a second set to open in 2027. Mitsui Fudosan also recently opened a large shopping mall in Taipei and plans further expansion in Taiwan, targeting annual revenue of 10 billion Taiwan dollars ($303 million).
Nikkei Asia: https://asia.nikkei.com/Business/Markets/Property/Mitsui-Fudosan-eyes-science-park-near-TSMC-s-Japan-fab-CEO
▶ SoftBank Corp. president links AI strategy to national strength
21 Mar, 2025
SoftBank Corp. is investing heavily in AI infrastructure, acquiring a former Sharp plant in Sakai to create one of Japan's largest data centers. The center will support generative AI models and autonomous AI agents, in partnership with OpenAI. SoftBank aims to ensure data sovereignty by keeping data within Japan. The company is also developing its own AI models, targeting 400 billion parameters, with plans for a trillion-parameter model. These efforts are supported by the Stargate project, a joint venture with OpenAI and Oracle. SoftBank is negotiating with Nvidia for GPUs, and its AI initiatives have driven investor interest, pushing its valuation to a record high.
