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The EU Japan Centre is releasing a weekly press review covering Japan's economic and business matters.
▶ Japan's foreign workforce tops 2.5m for first time
31 Jan, 2026
Photo Source: Atsushi Ooka/Nikkei
Japan’s foreign workforce reached a record 2.57 million in 2025, making up about 4% of all workers. Vietnamese workers were the largest group, followed by Chinese and Filipino workers, while Myanmar, Indonesian, and Sri Lankan workers saw the fastest growth. Employment rose most in medical and welfare, hospitality, and construction, with manufacturing employing the most overall. To tackle labor shortages, Japan will launch the Employment for Skill Development Program in April 2027, replacing the Technical Intern Training Program, and together with the Specified Skilled Worker program, will allow up to 1.23 million foreign workers to enter the country.
Nikkei Asia: https://asia.nikkei.com/spotlight/japan-immigration/japan-s-foreign-workforce-tops-2.5m-for-first-time
▶ Japan, Britain PMs agree on collaboration in critical mineral supply chains
31 Jan, 2026
Photo Source: Rie Ishii/Nikkei
Japan and Britain agreed to strengthen cooperation on critical mineral supply chains, cybersecurity, and space, and to hold “two-plus-two” security talks later this year. Prime Ministers Sanae Takaichi and Keir Starmer emphasized deepening defense and economic ties, including joint development of a next-generation fighter jet with Italy and collaboration through the Trans-Pacific Partnership. The meeting reflects both countries’ focus on closer alignment with like-minded partners amid global security and economic challenges.
▶ Japan Takes Step Toward Rare Earths Independence With Sea Mud Excavation
3 Feb, 2026
Photo Source: Japan Agency for Marine-Earth Science and Technology
Japan’s JAMSTEC successfully tested excavation of rare earth-bearing mud from 5,700 meters off Minami-Torishima, a potential domestic source of critical minerals that could reduce reliance on China. The mud is cleaner than land-based ores and estimated to contain 16 million tons of rare earths, but commercial extraction faces high costs and technical challenges. A pilot facility is planned by February 2027 to collect up to 350 tons per day, with full-scale operations unlikely before 2030. Japan is also diversifying procurement, expanding stockpiles, and developing rare-earth-free technologies for EVs to strengthen economic and national security.
Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20260203-308690/
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▶ Japan's Kioxia extends memory chip JV with Sandisk, receiving $1bn
31 Jan, 2026
Photo Source: KIOXIA
Japanese memory chip maker Kioxia has secured over $1 billion from U.S. partner Sandisk for a five-year extension of their joint venture at Kioxia’s Yokkaichi plant, extending the contract through 2034. The deal gives Sandisk access to Kioxia’s manufacturing capacity for $1.165 billion, marking a financial win for Kioxia. The two companies share wafer production in Japan, with Kioxia handling core manufacturing and Sandisk providing technical support. Kioxia and Sandisk together hold 27.7% of the NAND flash market, second to Samsung.
Nikkei Asia: https://asia.nikkei.com/business/tech/semiconductors/japan-s-kioxia-extends-memory-chip-jv-with-sandisk-receiving-1bn
KIOXIA: https://www.kioxia.com/en-jp/top.html
▶ TEPCO Starts Seeking Business Partners
2 Feb, 2026
Photo Source: JIJI
Tokyo Electric Power Company Holdings (TEPCO) has begun accepting applications for corporate partners, including those providing external capital, as part of its new business turnaround plan. The initiative, open to domestic and overseas firms until the end of March, aims to fund investments in decarbonization and data centers and could lead to investments in subsidiaries and a major corporate reorganization.
JIJI: https://jen.jiji.com/jc/eng?g=ind&k=2026020200986
▶ JERA, METI, and QatarEnergy Sign Memorandum of Understanding on Emergency Supply Cooperation for Japan
3 Feb, 2026
Photo Source: METI
JERA, Japan’s largest power generation company, has signed an MOU with Japan’s Ministry of Economy, Trade and Industry and QatarEnergy to establish a framework for securing additional LNG supplies during emergencies. The agreement aims to strengthen Japan’s energy security by enabling coordinated responses to supply disruptions caused by market tightness or natural disasters.
JERA: https://www.jera.co.jp/en/news/information/20260203_2352
METI(Japanese): https://www.meti.go.jp/press/2025/02/20260204003/20260204003.html
▶Toyota plans 30% increase in global hybrid production
4 Feb, 2026
Photo Source: Azusa Kawakami/Nikkei
Toyota plans to boost hybrid vehicle production by 30% to 6.7 million units by 2028, with hybrids making up about 60% of its total output, and will expand U.S. production. The move responds to slowing EV demand and reduced incentives. Toyota holds a 58% share of the global hybrid market and is investing $10 billion in U.S. operations. Other automakers, including Ford, GM, Volkswagen, and Tesla, are also adjusting strategies as EV momentum slows.
Nikkei Asia: https://asia.nikkei.com/business/automobiles/toyota-plans-30-increase-in-global-hybrid-production
▶ DeepL to release AI-powered interpretation software in Japan this year
4 Feb, 2026
Photo Source: JIJI
German AI translation company DeepL plans to launch a Japanese-language version of its real-time interpretation software by the end of this year. The software, called DeepL Voice, combines speech recognition, machine translation, and speech synthesis to provide real-time translation for multiple languages and speakers, with applications for online multinational meetings and smartphones. DeepL emphasizes Japan as a key market, and the software can produce accurate translations in five seconds or less. To stand out from competitors like Google and Apple, it will include a glossary feature allowing users to customize phrase translations.
Japan times: https://www.japantimes.co.jp/business/2026/02/04/companies/deep-l-japan-software/
▶ Gas turbine boom in US lifts Japan's Mitsubishi Heavy to record profit
4 Feb, 2026
Photo Source: MHI
Mitsubishi Heavy Industries (MHI) is seeing strong sales and profit growth due to a surge in U.S. demand for gas turbines, driven by rising electricity needs for AI and data centers. For the year ending March, MHI expects a record operating profit of 410 billion yen ($2.6 billion), up 15.5%, on sales of 4.8 trillion yen, up 10.1%. Global gas turbine demand nearly doubled in 2025 to 100 GW, with about half for large systems used by utilities. MHI focuses on large turbines and competes with GE Vernova. The company’s profit margin is expected to rise to 8.5%, and its order book could reach 6.7 trillion yen, potentially growing further with a frigate supply deal for Australia. Shares have surged amid expectations of benefits from energy and defense projects. However, China’s rare-earth export restrictions to Japan pose a potential risk to MHI’s operations.
▶ Refiner Eneos to expand oil-trading portfolio outside of Japan
4 Feb, 2026
Photo Source:Japan times
Eneos Holdings, Japan’s largest oil refiner, plans to expand oil-derivative trading at its overseas offices, including Singapore, by hiring additional traders and support staff. The move aims to strengthen its presence in major global trading hubs, capitalize on volatile oil markets, and support broader growth efforts such as overseas asset acquisitions.
Japan times: https://www.japantimes.co.jp/business/2026/02/04/companies/eneos-oil-trading-expansion/
▶ TMSC to Produce 3-Nanometer Semiconductors in Japan’s Kumamoto Pref.; Takaichi Pledges Support in Meeting with Executives
5 Feb, 2026
Photo Source: Yomiuri
TSMC plans to mass-produce 3-nanometer semiconductors at its new plant in Kumamoto, Japan, marking the country’s first facility for cutting-edge chips. Prime Minister Takaichi pledged government support, emphasizing the project’s importance for economic security and AI-related industries. TSMC will increase the plant’s investment to $17 billion, shifting from its original 6-12 nanometer plan to meet high global demand and strengthen Japan’s semiconductor supply amid rising international competition.
Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20260205-309008/
▶ Japan's 3 top banks on track to earn record profits for fiscal year
5 Feb, 2026
Source: Nikkei
Japan’s three megabanks—MUFG, SMFG and Mizuho—posted record consolidated net profits in the first nine months of fiscal 2025, totaling ¥4.22 trillion, driven mainly by higher domestic interest rates. The Bank of Japan’s rate hikes boosted lending income, widened interest spreads, and increased fee revenue from strong corporate demand for loans and M&A. While rising rates led to larger unrealized bond losses, the impact is limited due to portfolio adjustments and strong gains in stock holdings. All three banks are on track for a third consecutive year of record profits and have maintained their full-year forecasts.
Nikkei Asia: https://asia.nikkei.com/business/finance/japan-s-3-top-banks-on-track-to-earn-record-profits-for-fiscal-year
▶ Japan plant engineering peers eye merger to join ranks of industry leaders
6 Feb, 2026
Photo Source: Nikkei
Kanadevia and Nippon Steel Engineering have begun talks on a merger that would create a leading plant engineering company in Japan with over ¥1 trillion in sales. The merger, planned for completion in April 2027, would integrate the two firms through a share exchange, with Kanadevia absorbing Nippon Steel Engineering. The companies aim to strengthen human resources, expand overseas, and enhance competitiveness in complex projects, particularly in waste treatment, decarbonization technologies, and offshore wind power. No job cuts are currently planned, and the merger would also combine complementary technologies in carbon capture, hydrogen, and renewable energy.
▶ Leveraging OpenAI's Enterprise AI Platform "Frontier,"SB OAI Japan and SoftBank Corp.
Accelerate Initiatives to Provide "Crystal intelligence"
6 Feb, 2026
SB OAI Japan and SoftBank are using OpenAI’s new enterprise AI platform, Frontier, to develop “Crystal intelligence,” an AI solution for company-wide management transformation. The platform enables integration with enterprise data and systems, allowing AI agents to collaborate across departments and support long-term adoption. Crystal intelligence will provide end-to-end support for Japanese companies, including business process alignment, system integration, security, and tailored AI agents, with Forward Deployed Engineers assisting throughout implementation. The rollout is planned for 2026.
Softbank: https://www.softbank.jp/en/corp/news/press/sbkk/2026/20260206_01/
Published: February 2026
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.
