Weekly Japanese Industry and Policy News: 10 - 16 May, 2025
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Written message from Prime Minister ISHIBA for Virtual Leaders Meeting of the Coalition of the Willing on Ukraine
10 May, 2025
On May 10, Prime Minister Ishiba Shigeru delivered a message at the Virtual Leaders Meeting on Ukraine, co-hosted by the UK and France. He emphasized Japan’s strong call for Russia to take steps toward a comprehensive ceasefire and a just, lasting peace. He noted that peace in Ukraine affects not only Europe but global security, including the Indo-Pacific, and urged continued international cooperation. Japan will support Ukraine’s recovery and reconstruction through long-term public-private partnerships, and hopes the meeting will further efforts toward peace.
MOFA: https://www.mofa.go.jp/erp/c_see/ua/pageite_000001_00971.html
▶ Japan eyes exports of next-gen fighter to Australia, India
10 May, 2025
Japan is considering exporting its next-generation fighter jet—being co-developed with the U.K. and Italy under the Global Combat Air Programme—to countries like Australia, India, Canada, and Saudi Arabia. The aircraft, set to replace the F-2 and Eurofighter Typhoon, is planned for deployment by 2035, though development delays raise concerns about meeting that timeline. The initiative aims to strengthen defense ties, especially amid rising tensions with China and uncertainty over U.S. global security involvement. Expanding exports would lower unit costs and promote interoperability among like-minded nations, enhancing regional defense cooperation.
Nikkei Asia: https://asia.nikkei.com/Politics/Defense/Japan-eyes-exports-of-next-gen-fighter-to-Australia-India
▶ Cash-loving Japan reluctant to switch to app-based salary payments
11 May, 2025
App-based digital salary payments have seen limited adoption in Japan, with only 2.8% of surveyed individuals using services like PayPay, despite growing awareness. While over 100 companies offer the option and four app providers are approved, most companies and employees remain hesitant due to limited perceived benefits, higher administrative costs, and lack of demand—especially among part-time workers who could benefit most. A survey showed about a third of people are uninterested, and nearly 80% of companies have no plans to implement it. Still, cashless payments are rising, with the economy ministry reporting they surpassed 40% of total settlements in 2024, reaching a key national goal ahead of schedule.
Mainichi: https://mainichi.jp/english/articles/20250511/p2g/00m/0bu/024000c
▶ Japan to support companies moving into Africa
11 May, 2025
The Japanese government is launching a public-private initiative with venture capital firms, including Kepple Africa Ventures and AAIC Japan, to support Japanese companies entering the African market. Announced at an economic conference in Ivory Coast, the project aims to connect Japanese businesses with promising African startups by gathering local information and aiding business development. With fewer than 1,000 Japanese offices in Africa—far behind China and India—the initiative seeks to boost Japan’s presence in sectors like fintech, transport, and entertainment. It also aims to facilitate financing for African startups through Japanese financial institutions.
Nikkei Asia: https://asia.nikkei.com/Politics/Japan-to-support-companies-moving-into-Africa
▶ New International Standard Issued for Evaluating Real-World Biodegradability of Marine Biodegradable Plastics- New Standard Enables Easy Assessment of Degradation Time in Oceans and Lakes
12 May, 2025
Japan’s NEDO and AIST have developed a new international standard, ISO 16636:2025, for evaluating the biodegradability of marine plastics in real-world environments like oceans and lakes. The method is simple, doesn’t require large equipment or expert skills, and enables faster global adoption of biodegradable plastics. It is expected to boost market growth and help address marine plastic pollution.
NEDO(Japanese): https://www.nedo.go.jp/news/press/AA5_101847.html
Nikkei (Japanese): https://www.nikkei.com/article/DGXZRSP690840_S5A510C2000000/
▶ Japan eyes skilled worker visas for waste, warehouse management
13 May, 2025
Japan will expand its "specified skilled worker" visa program by 2027 to include three more industries: warehouse management, waste disposal, and linen supply. These sectors face serious labor shortages, with job-to-applicant ratios as high as 4.3. The program, launched in 2019, currently covers 16 industries and had about 280,000 participants as of December 2023. Two visa types exist: Type 1 (up to 5 years, no family) and Type 2 (indefinite stay, with family). The new industries will initially accept Type 1 workers. Japan may also expand eligible job roles within existing industries and has set a cap of 820,000 workers for 2024–2029. The controversial technical intern training program will end in April 2027, to be replaced by the more flexible Employment for Skill Development program, which allows job changes and aims to transition workers to skilled status over three years.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Japan-immigration/Japan-eyes-skilled-worker-visas-for-waste-warehouse-management
▶ JAXA develops satellite system to quickly assess quake damage
13 May, 2025
JAXA is developing a satellite and AI-based system to quickly assess earthquake damage at the building level. Using data from the 2016 Kumamoto quakes and images from its Daichi satellites, the system aims to estimate damage within hours after a disaster. It overcomes visibility issues with radar that works in any weather or lighting. Challenges like detecting damage to lower floors remain, but future improvements are planned. The project is expected to enhance disaster response nationwide.
Asahi: https://www.asahi.com/ajw/articles/15718611
▶ Third Japan-EU Ministerial Meeting on Digital Partnership Convened
13 May, 2025
The 3rd Japan-EU Digital Partnership Ministerial Meeting was held with senior officials from both sides. A joint statement was issued, outlining strengthened cooperation in key digital areas. Japan and the EU agreed to pursue joint research in semiconductors, 6G, and quantum technologies. They reaffirmed collaboration on trustworthy AI, digital identity, and data governance, including plans to establish a joint working group to improve data sharing. Progress was noted in expanding the EU’s adequacy decision to Japan’s research and public sectors. The two sides also deepened cooperation on cybersecurity, submarine cable infrastructure, and semiconductor supply chains to enhance economic security. They committed to continuing joint efforts and confirmed that the next ministerial meeting will be held in Brussels in 2026.
METI(Japanese): https://www.meti.go.jp/press/2025/05/20250513003/20250513003.html
Joint Statement (English/PDF): https://www.meti.go.jp/press/2025/05/20250513003/20250513003-1r.pdf
Digital Agency: https://www.digital.go.jp/en/news/9b948ac0-10fb-47d0-aff8-7534d9bb042b
▶ Japan Unveils Urashima 8000 Underwater Drone Capable of Diving 8,000 Meters Under the Sea
14 May, 2025
The Japan Agency for Marine-Earth Science and Technology unveiled its new autonomous underwater vehicle, the Urashima 8000, in Yokosuka, Kanagawa. Measuring about 10 meters, it can dive to 8,000 meters, more than twice the depth of its predecessor. The vehicle, developed since 2022, features a titanium pressure-resistant container, extended battery life (up to 40 hours), and can scan 100 square kilometers of seabed per dive. It will cover over 98% of Japan’s exclusive economic zone and assist in exploring underwater resources and monitoring seafloor changes. Test cruises are planned for July and August over the Japan Trench.
Yomiuri: https://japannews.yomiuri.co.jp/science-nature/technology/20250514-254153/
▶ Japan Eyes Increasing Cybersecurity Experts to 50,000 by 2030
14 May, 2025
Japan’s industry ministry aims to increase the number of cybersecurity experts to 50,000 by 2030, focusing on doubling holders of the Registered Information Security Specialist license, currently at around 24,000. These licensed professionals help companies defend against cyberattacks. With a cybersecurity expert shortage of 110,000, the report highlights the urgent need for talent. License holders must pay over ¥100,000 every three years for renewal courses.
Jiji: https://jen.jiji.com/jc/eng?g=eco&k=2025051401332
METI(Japanese): https://www.meti.go.jp/press/2025/05/20250514002/20250514002.html
▶ Japan urges banks to block hackers with 'post-quantum' tech
15 May, 2025
Japan’s Financial Services Agency is urging banks to begin adopting post-quantum cryptography to guard against future cyberattacks from quantum computers, expected by the mid-2030s. The shift will be costly and take years, but is crucial as cyberattacks on Japanese banks rose 160% in 2023.
The FSA will monitor progress and wants both major and regional banks involved. Current encryption methods may become vulnerable, so lattice-based post-quantum methods are needed. This move also supports Japan’s efforts to improve its global cybersecurity standing ahead of a 2028 FATF review.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Cybersecurity/Japan-urges-banks-to-block-hackers-with-post-quantum-tech
▶ Japan sets 5-year goal of 1% annual real wage growth via investment
15 May, 2025
The Japanese government has set a five-year goal to achieve 1% annual real wage growth nationwide through ¥60 trillion ($408 billion) in public-private investment aimed at boosting productivity, especially among small and medium-sized enterprises. The plan includes subsidies for labor-saving technologies like robots and IT tools, and emphasizes the need for government support in rural areas. Despite recent nominal wage growth, real wages have declined for three straight years, outpaced by rising prices. Achieving the target would require 3% nominal wage growth, aligned with Japan’s 2% inflation goal.
Mainichi: https://mainichi.jp/english/articles/20250515/p2g/00m/0na/018000c
▶ Japan Eyes Creating Think Tank to Analyze Economic Security; Tokyo Hopes to Boost Cooperation with Like-Minded Countries
15 May, 2025
The Japanese government is planning to establish a new think tank under the National Security Secretariat to strengthen research on economic security. It will work with private businesses and government agencies to analyze risks such as supply chain disruptions, especially for critical materials like semiconductors. The think tank will also help share information through a public-private council and collaborate with international partners. It may eventually merge with a strategic research institute on advanced technologies, set to launch in fiscal 2026, to enhance policy-making and public-private cooperation.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250515-254311/
▶ Japanese car parts makers invest $115m more in Mexico
15 May, 2025
Despite U.S. tariffs prompting some automakers to consider shifting production, Japanese car parts makers are increasing investment in Mexico, with over $115 million in new projects planned in Guanajuato, the hub of Mexico's auto industry. Governor Libia Dennise Garcia remains optimistic, citing strong interest from companies like Senyo, SK Tec, and Atecs-Nagase JV. While U.S. tariffs on cars and parts pose challenges, she emphasized Mexico’s labor advantages and expressed hope for negotiated compromises. Japanese automakers like Honda are weighing production shifts to the U.S., but continued investment from Japan—averaging $1.6 to $2.5 billion annually—shows Mexico remains a key player in the automotive supply chain.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Japanese-car-parts-makers-invest-115m-more-in-Mexico
▶ Japan moves to ban Google, Apple from blocking app store rivals
15 May, 2025
Japan's antitrust watchdog has released draft guidelines for a new law targeting smartphone software services by Google and Apple, aiming to boost competition and prevent unfair practices. Set to take full effect in December, the law will ban these firms from using app store or OS data to benefit their own services, and from unfairly screening apps switching between stores. While security-related checks are still allowed, the law is designed to prevent exclusion of smaller competitors and improve consumer access and pricing. Public feedback is open until June 13, with final guidelines due by July’s end.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Japan-moves-to-ban-Google-Apple-from-blocking-app-store-rivals
▶ Japan launches economic security clearance system amid privacy woes
16 May, 2025
Japan has launched a new "security clearance" system to classify critical economic security information, including areas like infrastructure and advanced semiconductors. Government and private-sector employees must undergo detailed background checks by the Cabinet Office, covering personal, professional, and family information. The system aims to enhance information sharing with allies like the U.S. and EU, enabling broader participation in sensitive international projects. Leaks of classified information can result in up to five years in prison or fines. While the checks require individual consent, critics have raised privacy concerns.
Business News
▶ Hitachi-GE Vernova venture gets approval for Canadian nuclear reactor
10 May, 2025
Hitachi and GE Vernova's joint venture will build a next-generation small modular reactor (SMR) in Canada, following approval from the Ontario government. The BWRX-300 reactor, set to operate by 2030 at the Darlington site, will generate 300 megawatts—enough to power 300,000 homes. This marks Hitachi’s first SMR project, with plans for three additional reactors by 2036. SMRs offer lower construction costs and are seen as key to meeting rising energy demands, including those from AI technologies.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Hitachi-GE-Vernova-venture-gets-approval-for-Canadian-nuclear-reactor
Hitachi (Japanese): https://www.hitachi.co.jp/New/cnews/month/2025/05/0509.pdf
▶ Nissan, Toyota battery plant U-turns stall Japan supply chain goals
11 May, 2025
Nissan has canceled its planned EV battery plant in Japan due to financial strain, following Toyota’s earlier postponement of a similar project—both setbacks to Japan’s goal of securing a domestic battery supply. Despite government subsidies, high investment costs and weak earnings prompted Nissan to abandon the plan, which was key to producing cost-effective lithium iron phosphate batteries. This jeopardizes Japan’s 2030 target of 150 GWh in battery production. Once a global leader, Japan has fallen behind China, whose firms dominate battery manufacturing and materials through vertically integrated supply chains. Chinese EV giant BYD is also expanding into Japan’s market by 2026.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Nissan-Toyota-battery-plant-U-turns-stall-Japan-supply-chain-goals
▶ Introducing Continuous Thought Machines
12 May, 2025
Sakana AI has introduced the Continuous Thought Machine (CTM), a new AI model inspired by biological brains that uses neural synchronization and timing as its core reasoning mechanism. Unlike traditional models, CTM incorporates each neuron's past behavior to enable step-by-step, interpretable thinking, showing improved performance in tasks like maze solving and image recognition. The model mimics human-like attention patterns and reasoning processes, offering greater transparency and efficiency. CTM represents a major step toward integrating neuroscience principles into AI, aiming to unlock more brain-like capabilities while remaining practical for real-world use.
Sakana AI: https://sakana.ai/ctm/
▶ Nissan to shut plants, ax 20,000 jobs after logging FY 2024 net loss
13 May, 2025
Nissan Motor Co. announced it will cut 20,000 jobs globally and shut seven vehicle plants by fiscal 2027, as part of a major restructuring following a ¥670.9 billion ($4.5 billion) net loss for fiscal 2024. The move doubles its previously announced job cuts and will reduce its global workforce by 15% and production capacity (excluding China) by 30%. The company cited poor sales in the U.S. and China, and ongoing uncertainty from U.S. tariffs under former President Trump’s policies, as key challenges. Nissan did not provide earnings forecasts for fiscal 2025 due to this volatility. CEO Ivan Espinosa, who took office in April, called the decisions painful but necessary. Despite a failed merger attempt with Honda, Nissan says it will continue exploring partnerships in electrification and digitalization.
Kyodo: https://english.kyodonews.net/news/2025/05/6dc3a784064b-update1-nissan-logs-6709-bil-yen-loss-in-fy-2024-lifts-job-cuts-to-20000.html
▶ Asahi Kasei's auto chips to slash audio-tuning time by 70%
14 May, 2025
Asahi Kasei, a leading Japanese semiconductor company, has teamed up with Swedish audio technology developer Dirac to reduce the time automakers need to fine-tune in-vehicle sound systems by 70%. By integrating its semiconductors with Dirac's semi-automated tuning system, Asahi Kasei aims to cut the acoustic calibration process from eight weeks to just over two. This partnership seeks to meet growing demand for quieter, high-quality sound systems in vehicles, while helping automakers shorten development cycles. Asahi Kasei, which holds a 20% share of the global audio-processing semiconductor market for vehicles, plans to further expand its collaborations with external system providers to enhance its products and services.
Nikkei Asia:https://asia.nikkei.com/Business/Technology/Asahi-Kasei-s-auto-chips-to-slash-audio-tuning-time-by-70
▶ Japan, Netherlands win as China's chip tool imports surge on US tensions
14 May, 2025
In 2024, China imported a record $30.9 billion worth of chipmaking equipment—mainly from Japan and the Netherlands—as it expanded domestic chip production and stockpiled tools amid rising U.S. tensions. Imports from Japan hit $9.63 billion (+28%) and the Netherlands $9.53 billion (+31.6%), driven by fears of tighter export controls. Singapore and South Korea also saw large export increases. U.S. equipment imports grew modestly, and American firms are losing market share to Chinese and Asian rivals. China's local chip tool makers, like Naura Technology, reported record profits, reflecting the success of Beijing’s "de-Americanization" strategy. Demand for Japanese lithography machines and South Korean bonding tools is strong. ASML expects slower China sales in 2025 due to export restrictions. As China ramps up chip investment—totaling $45 billion in 2024—its share of the global mature chip market is projected to grow, intensifying competition.
▶ MHI Starts Operation of New CO₂ Capture Pilot Plant at KEPCO's Himeji No.2 Power Station
14 May, 2025
Mitsubishi Heavy Industries (MHI) has launched a new CO₂ capture pilot plant at the Himeji No.2 power plant in Hyogo Prefecture, in collaboration with Kansai Electric Power Co. The plant, with a capacity of 5 tons per day, will test next-generation CO₂ capture technologies co-developed with ExxonMobil. This initiative aims to reduce greenhouse gas emissions and strengthen MHI’s global CCUS (carbon capture, utilization, and storage) business. The plant features advanced technologies such as the "Advanced KM CDR Process™" and remote monitoring via ΣSynX Supervision. MHI is targeting carbon neutrality by 2040 under its "MISSION NET ZERO" strategy.
MHI: https://www.mhi.com/news/250514.html
▶ Japan's Fanuc creates remote-controlled robot arm for risky jobs
14 May, 2025
Fanuc has developed a robot arm system that can remotely replicate the movements of skilled workers using force feedback, making it ideal for tasks that are dangerous or difficult to automate. The system features a "leader" arm controlled by the user and a "follower" arm that mimics its actions, providing real-time tactile feedback for precise control. This innovation allows for both manual control and automation of tasks, such as grinding or cutting, that require delicate handling. Fanuc plans to begin shipping the system in August, aiming to address Japan's labor shortage and enhance safety at manufacturing sites.
Nikkei Asia:https://asia.nikkei.com/Business/Technology/Japan-s-Fanuc-creates-remote-controlled-robot-arm-for-risky-jobs
▶ Sojitz Launches Hi-Kii Quoting Platform for Companies’ IT Asset Disposition
14 May, 2025
Sojitz Corporation has launched "Hi-Kii," Japan’s first IT asset disposition (ITAD) quoting platform, enabling businesses to easily compare quotes from trusted providers and manage contracts for the secure and responsible disposal of IT devices. The platform ensures data security through certified data erasure options and supports the reuse and recycling of devices like PCs, servers, and smartphones. Hi-Kii addresses key issues such as data leaks, resource loss, and staff shortages in IT management. By promoting proper disposal and recycling, Sojitz aims to advance urban mine recycling, contribute to a circular economy, and support broader goals like decarbonization and reducing environmental impact. The initiative builds on Sojitz’s expertise through investments in firms like TES-AMM JAPAN and eCycle Solutions.
Sojitz: https://www.sojitz.com/en/news/article/20250514.html
▶ Japan, EU to Expand Mutual Recognition of Organic Food
15 May, 2025
Japan and the EU will expand their mutual recognition of organic food standards to include products like sake, livestock items, and processed livestock goods, beyond the current focus on non-livestock agricultural products. This change, taking effect this week, will simplify trade by removing the need for extra approvals. The move supports sustainable production practices under Japan’s Organic JAS system and aims to boost exports to the EU's large organic market.
Jiji: https://jen.jiji.com/jc/eng?g=eco&k=2025051500827
▶ Japan's Renesas forms India tie-up to support startups in chip push
15 May, 2025
Renesas Electronics has signed agreements with India's Centre for Development of Advanced Computing to provide semiconductor design software to startups and educational institutions. The move supports Renesas’s goal of raising its India sales share to 10–15% by 2030, up from less than 5% in 2022. Renesas is also expanding its presence in India, growing its workforce from 50 in 2019 to 700, aiming for 1,000 by year-end, and planning a chip assembly and inspection plant by 2026 through a joint venture.
▶ Kobe Steel and Mitsubishi Ube Cement Begin Talks on Joint Black Pellet Venture
15 May, 2025
Mitsubishi UBE Cement and Kobe Steel have agreed to explore a joint business to produce and sell black pellets, a carbon-neutral fuel made from carbonized wood pellets. The goal is to use them for both power generation and steelmaking. UBE’s MUCC Torrefied Pellets® are durable, safe, and compatible with existing coal systems. The companies aim to expand usage and may form a joint venture as part of efforts to support decarbonization and a circular economy.
Mitsubishi UBE Cement (Japanese): https://www.mu-cc.com/information/20250515_01.html
