The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
▶ Japan trade deficit in fiscal 2024 1st half widens 14.4% on weak yen
Oct 17, 2024
Japan’s exports fell 1.7% in September, the largest drop since February 2021, primarily due to decreased shipments of cars and fuels. This decline resulted in a trade deficit of ¥294.3 billion ($2 billion). Imports rose 2.1%, but overall demand remains weak, particularly from China, the U.S., and Europe. Analysts suggest that net exports may hinder economic growth in the third quarter. Central banks, including the Federal Reserve, are cutting interest rates to address slowdowns. The Bank of Japan is expected to maintain its current policies amid concerns about the yen's fluctuations affecting both exports and import costs.
https://www.japantimes.co.jp/business/2024/10/17/economy/japan-exports-fall/
▶ Tokyo air expo draws BAE and Airbus as Japan boosts defense budget
Oct 17,2024
Japan's biggest aerospace trade show opened in Tokyo on Wednesday, with defense companies spotlighting the latest in airpower to be adopted by the country's Self-Defense Forces as defense spending ramps up. The Japan International Aerospace Exhibition features over 600 companies from 23 countries. BAE Systems showcased a next-gen fighter jet model developed with Japan, the U.K., and Italy, while Mitsubishi Heavy Industries presented unmanned combat aircraft concepts. Japan plans to spend 43 trillion yen ($288 billion) on defense over five years, aiming for 2% of GDP by fiscal 2027, with unmanned strike-capable aircraft expected by 2025. Airbus and Boeing exhibited defense equipment, and recent changes in Japan's defense export policies may help local contractors enter international markets.
▶ Share of Female Executives at Major Japanese Companies Rises to 16.8% in 2024
Oct 16, 2024
A survey by the Japan Business Federation (Keidanren) revealed that the proportion of female executives in Japan's top-tier Prime section of the Tokyo Stock Exchange has increased to 16.8%, up 2.7 percentage points from the previous year. The government aims to raise this share to at least 19% by 2025 and 30% by 2030. Most female executives were recruited from outside their companies, with only 3.3% of directors and 5.2% of auditors being internally appointed. Notably, 11 companies still have no female executives.
https://sp.m.jiji.com/english/show/36094
Business News
▶ Japan companies eye mass production of gallium nitride parts for EVs
Oct 18, 2024
Japanese companies are ramping up mass production of gallium nitride (GaN) power semiconductors for electric vehicles (EVs), offering potential for improved efficiency and reduced charging times. While GaN is more efficient than traditional silicon, silicon carbide (SiC) currently leads the market due to lower costs. To boost GaN adoption, larger substrates are needed. Sumitomo Chemical aims for mass production of 150-mm substrates by fiscal 2028, while Mitsubishi Chemical plans to produce larger substrates by 2025. GaN devices come in two types: horizontally structured (less capable for high currents) and vertically structured (better performance but more costly). Despite higher production challenges, GaN's compactness may justify its price. The global GaN market is expected to surpass $2.3 billion by 2030.
▶ Taiwan's PSA bets on Japan, Malaysia for more supply chain resilience
Oct 15,2024
Taiwan's Passive System Alliance (PSA) is boosting production in Japan and Malaysia to strengthen its supply chain amid rising trade protectionism and competition from China. Chairman Chiao Yu-heng highlighted the need for "out of China" manufacturing and noted increased investments in Japanese suppliers, including the acquisition of Soshin Electric. PSA's new factory in Penang will produce PCBs, and Chiao emphasized collaboration between Taiwanese and Japanese companies for efficiency. However, he warned of intense price competition from Chinese suppliers, who flood the market with low-cost products due to government support, posing significant challenges for global industries.
▶ Rapidus's Japan chip plant may bring $120bn economic windfall, but doubts remain
Oct 15,2024
Rapidus is launching a semiconductor prototype line in Hokkaido, expected to generate 18 trillion yen ($120 billion) in local economic benefits. Construction near New Chitose Airport is over 50% complete, with a chip assembly line underway. The Hokkaido Agency estimates an economic impact of 18.8 trillion yen by fiscal 2036. However, mass production of 2-nanometer semiconductors requires about 5 trillion yen in funding, with the government pledging 920 billion yen in support. Thirty companies have set up operations in Chitose, primarily service centers, and larger investments depend on achieving mass production.
▶ Japan's tech, auto sectors open 1st joint trade show to ramp up ties
October 15, 2024
Japan's major annual electronics show kicked off Tuesday in tandem with a mobility show at the same venue in the first joint trade fair to boost collaboration between the sectors, with many companies featuring artificial intelligence. The Combined Exhibition of Advanced Technologies and Japan Mobility Show Bizweek showcases the convergence of tech and automotive industries, with a strong focus on AI—half of the 800 tech exhibitors feature AI-related products. Highlights include Toyota's portable hydrogen tank, Panasonic's efficient solar cells, and Sony's driver safety system. NEC displays an AI summarization service, while TDK presents a low-energy AI semiconductor. The event, with around 1,000 companies, is held at Makuhari Messe in Chiba and requires online registration for visitors.
https://mainichi.jp/english/articles/20241015/p2g/00m/0bu/017000c
▶ Japan PM eyes over 13 tril. yen extra budget for inflation relief
October 15, 2024
Prime Minister Shigeru Ishiba said Tuesday the size of an extra budget to be compiled to fund a fresh set of inflation relief measures will likely exceed 13 trillion yen ($87 billion) as he vowed to extend support to struggling households ahead of a general election in late October. Ishiba announced plans for a substantial budget aimed at supporting the economy, particularly to aid households facing rising prices despite wage growth. The government will focus on boosting private consumption, which constitutes over half of the economy, by offering cash handouts to low-income families and increasing financial support for regional areas. This economic package will be finalized after the Oct. 27 general election and will contribute to the fiscal 2025 state budget preparations starting in April.
https://mainichi.jp/english/articles/20241015/p2g/00m/0na/029000c
▶ Japan's Kyushu considers own spin to Taiwan's chip megapark
Oct 14,2024
Kyushu is moving to become a semiconductor industry hub as TSMC builds a second plant there. Unlike Taiwan’s Hsinchu Science Park, Kyushu plans a network of smaller industrial and research centers due to logistical and legal challenges. Kumamoto has seen over 50 semiconductor investments since 2021 but faces land shortages. Local leaders draw inspiration from Hsinchu but acknowledge Japan's legal framework limits large-scale developments. Kyushu has strengths like Fukuoka’s chip design and Oita’s manufacturing expertise. TSMC aims for collaboration, starting with smaller land parcels that can expand over time.
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
