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Weekly Japanese Industry and Policy News: 12 Apr - 18 Apr,2025
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Japan's data center rush stirs public opposition over noise, heat
13 Apr, 2025
Japan is seeing a surge in data center construction, driven by investments from U.S. tech giants like Amazon and Google, as well as government efforts to attract foreign capital and support AI growth. However, local opposition is rising due to concerns about noise, heat, and proximity to residential areas. Tokyo’s Koto Ward introduced stricter guidelines, including extended community notice periods and mandatory town hall meetings. Other areas like Hino and Nagareyama have also seen protests, with one project even canceled. Meanwhile, cities like Inzai benefit from increased tax revenue, using it for community support. The lack of clear zoning regulations is contributing to conflicts, prompting the government to explore relocating data centers to rural areas as part of regional revitalization efforts.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Japan-s-data-center-rush-stirs-public-opposition-over-noise-heat
▶ Osaka Expo opens for 6-month event focused on sustainable society
13 Apr, 2025
The World Exposition in Osaka opened on Sunday, focusing on designing a sustainable future, with 158 countries participating. The event, running until October 13, is expected to attract 28.2 million visitors. Notable exhibits include a "Mars rock" at the Japan Pavilion and heart muscle sheets made from iPS cells for heart failure treatment. Despite delays and rising costs—nearly doubling the original budget—anticipation remains high, though advance ticket sales are slower than expected. The government estimates the expo will bring an economic impact of 2.92 trillion yen ($20 billion). The event, held on Yumeshima Island, features 42 self-built pavilions from countries like the U.S. and China. However, some countries, including Nepal, couldn’t complete their pavilions in time.
Mainichi: https://mainichi.jp/english/articles/20250413/p2g/00m/0na/001000c
▶ Gov't estimate shows record decline of Japanese nationals as of Oct.
14 Apr, 2025
Japan's population continues to decline, with the number of Japanese nationals falling by a record 898,000 to 120.3 million as of October 2024. Including foreign residents, the total population dropped to 123.8 million, marking the 14th straight year of decline. The child population hit a record low, while those aged 65 and over reached a record high, now making up 29.3% of the population. The working-age population also shrank, highlighting ongoing demographic challenges.
Mainichi: https://mainichi.jp/english/articles/20250414/p2g/00m/0na/030000c
▶ Japan to add undersea cables and satellites to critical supplies list
15 Apr, 2025
Japan plans to expand its list of critical goods for economic security to include undersea cables, satellites, and rockets, due to their importance and vulnerability to overseas supply shocks. The Ministry of Economy, Trade and Industry (METI) will propose the additions, alongside items like fusion energy and nuclear manufacturing tech. Japan relies heavily on undersea cables for communication and faces growing competition from China. Efforts will focus on strengthening domestic industries, supporting joint ventures, and promoting the overseas adoption of Japanese technology to reduce dependency and enhance resilience.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Supply-Chain/Japan-to-add-undersea-cables-and-satellites-to-critical-supplies-list
▶ Incoming Japan business lobby chief surprises with priorities
15 Apr, 2025
Yoshinobu Tsutsui, the incoming head of Keidanren (Japan Business Federation), has shifted the organization’s top priority from tax and social security reform to innovation, signaling a new direction amid global uncertainty and U.S. trade tensions. Tsutsui, the first Keidanren leader from the financial sector, plans to establish a strategic council to promote science and technology. His focus aims to boost Japan’s global competitiveness, especially as traditional industries face pressure from U.S. tariffs under President Trump. Despite concerns about his lack of manufacturing background, Tsutsui's push for innovation is seen as a unifying and forward-looking strategy.
Nikkei Asia: https://asia.nikkei.com/Economy/Incoming-Japan-business-lobby-chief-surprises-with-priorities
▶ Japan to spend 1.8% of GDP on defense in 2025, 2% target in sight
15 Apr, 2025
Japan's defense and related spending for fiscal 2025 is projected to reach 9.9 trillion yen ($70 billion), or 1.8% of the GDP from three years earlier, as the country moves toward its goal of 2% by 2027. The increase comes in response to regional security threats from China and North Korea, and under pressure from the U.S., especially with President Trump pushing allies to contribute more. The budget includes funding for defense, the coast guard, peacekeeping, and cybersecurity. U.S. officials, including Elbridge Colby, have urged Japan to raise spending to 3% of GDP.
▶ The Second Ministerial Level Meeting of the Comprehensive Strategic Partnership Initiative (CSPI)
15 Apr, 2025
On April 15, Japan's Foreign Minister Takeshi Iwaya and UAE Minister Sultan Al Jaber held the second Ministerial Level Meeting of the Comprehensive Strategic Partnership Initiative (CSPI) in Tokyo. They reviewed progress in bilateral cooperation across various fields including politics, energy, technology, and education, and discussed outcomes from five subcommittees under the CSPI framework. The ministers agreed to further strengthen ties and continue working on a balanced Economic Partnership Agreement (EPA). They also exchanged views on regional and global issues, reaffirming their commitment to close cooperation.
MOFA: https://www.mofa.go.jp/press/release/pressite_000001_01175.html
▶ Trump administration pulls funding for Texas bullet train with Japan tech
16 Apr, 2025
The U.S. has canceled a $63.9 million grant for a Texas high-speed rail project using Japanese shinkansen technology, due to soaring costs and a shifting political landscape. The Dallas–Houston line, initially estimated at $12 billion, has now ballooned to over $40 billion, making it financially unfeasible, according to the Department of Transportation. The project, supported by Central Japan Railway, aimed to connect the two cities in 90 minutes using Japanese bullet train technology. It was part of a broader effort to combat climate change and secure jobs, a key focus of the Biden administration’s rail infrastructure strategy. However, following recent political changes, the project's future is now uncertain, and federal authorities have deemed it misaligned with Amtrak’s priorities.
▶ Japan-France Summit Telephone Meeting
16 Apr, 2025
On April 16, Japanese Prime Minister Shigeru Ishiba held a 40-minute phone summit with French President Emmanuel Macron. They affirmed the growing interconnection between Euro-Atlantic and Indo-Pacific security and expressed their commitment to cooperation in areas like economic security, civil nuclear energy, and Indo-Pacific engagement, emphasizing their status as “Exceptional Partners.” They discussed the global economic impact of U.S. tariffs and China’s countermeasures, and agreed on the importance of maintaining a free and open international order based on the rule of law. They also confirmed close Japan-France cooperation on international issues including Ukraine, East Asia, and North Korea.
MOFA: https://www.mofa.go.jp/erp/we/fr/pageite_000001_00899.html
▶ Japan tells Google to stop antitrust practice over smartphone app
16 Apr, 2025
Japan's Fair Trade Commission has issued a cease and desist order to Google for violating antitrust laws by requiring smartphone makers to preinstall its search and browser apps as a condition for accessing the Google Play Store. This practice, in place since 2020, affected over 80% of Android devices in Japan and limited competition from rivals like Bing and Yahoo Japan. The commission also found Google shared ad revenue with manufacturers in exchange for excluding competing apps. Google called the ruling "regrettable" and is reviewing its response. The company must now revise contracts, submit progress reports, and involve third-party monitoring for the next five years. The move marks Japan’s first antitrust order against a GAFA tech giant and aligns with global efforts to curb big tech’s monopolistic practices.
Kyodo: https://english.kyodonews.net/news/2025/04/a9b0beb4443a-urgent-japan-ftc-tells-google-to-stop-antitrust-practice-over-smartphone-app.html
▶ Trump tariffs hit Japan, South Korea steel exports
17 Apr, 2025
In March, Japanese and South Korean steel exports to the U.S. dropped sharply—by 16.6% and 24% respectively—following the U.S. imposition of 25% tariffs on steel imports. While Japan’s overall iron and steel exports fell 8.2%, total exports rose 3.9% due to front-loaded shipments ahead of new tariffs. Despite temporary trade gains, experts warn of a deteriorating global trade outlook. Additional U.S. tariffs on vehicles and reciprocal duties have further strained trade ties, especially impacting Japan, which supplies 13% of U.S. vehicle imports. Still, Japan recorded a trade surplus of ¥544 billion ($3.8 billion) in March.
Nikkei Asia: https://asia.nikkei.com/Economy/Trade/Trump-tariffs-hit-Japan-South-Korea-steel-exports
▶ Japan Gives Up on Cash Handout Idea for Citizens; Govt to Examine Measures to Help Combat U.S. Tariffs, Rising Prices
17 Apr, 2025
The Japanese government and ruling parties have decided to abandon plans for a universal cash handout, initially proposed to ease the impact of U.S. tariffs and rising prices. Proposals ranged from ¥30,000 to ¥100,000 per person, but were rejected due to public opposition, doubts about effectiveness, and concerns over fiscal discipline—especially ahead of the upcoming House of Councilors election. Instead, the government will use reserve funds from the fiscal 2025 budget to address inflation. Discussions are also underway within the ruling coalition about potentially cutting the consumption tax on food and essentials, though legal changes would be required, with further debate expected toward the year-end tax reform talks.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250417-249564/
▶ World-First Demonstration Project Aims for Carbon-Neutral Ports
17 Apr, 2025
Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has launched a world-first field demonstration of hydrogen-powered cargo handling equipment at the Port of Kobe as part of its efforts to develop Carbon Neutral Ports (CNPs) by 2050. The initiative aims to decarbonize port terminals, enhance the competitiveness of Japanese ports, and contribute to a carbon-neutral society. Following this pilot, the Ministry will examine technical standards and regulatory frameworks through a dedicated study group to support the safe and smooth integration of hydrogen-powered machinery into port operations nationwide.
MLIT (Japanese): https://www.mlit.go.jp/report/press/port04_hh_000522.html
Press release (Japanese/PDF): https://www.mlit.go.jp/report/press/content/001884376.pdf
▶ Japan PM aims to meet Trump in US over tariffs when appropriate
17 Apr, 2025
Japanese Prime Minister Shigeru Ishiba stated that tariff negotiations with the U.S. will be difficult, but he plans to visit President Donald Trump for direct talks at the right time. Following a meeting in Washington between Trump and Japanese Economic Revitalization Minister Ryosei Akazawa, Ishiba expressed hope for a comprehensive agreement to strengthen both economies. The U.S. and Japan agreed to hold another round of talks by end of April, though uncertainties remain. Trump reportedly criticized the U.S.-Japan security treaty and may pressure Japan to increase defense spending. Japan expressed regret over U.S. tariffs on imports and urged a review, but avoided retaliatory measures. The issue of foreign exchange rates was not discussed. Ishiba emphasized Japan's commitment to resolving the matter.
Mainichi: https://mainichi.jp/english/articles/20250417/p2g/00m/0na/052000c
MOFA (press release-Japan-U.S. Consultation on U.S. Tariff Measures): https://www.cas.go.jp/jp/seisaku/tariff_measures/houmon/pdf/kyougi_e.pdf
▶ Japan reports 9-trillion-yen trade surplus with U.S. as it talks with Trump on tariffs
18 Apr, 2025
Japan recorded a 5.2 trillion yen ($37 billion) trade deficit for the fiscal year through March, marking its fourth consecutive year in deficit, according to the Finance Ministry. However, it posted a 9 trillion yen ($63 billion) trade surplus with the U.S., a point of tension in ongoing tariff talks. President Donald Trump has threatened a 24% tariff on Japanese imports, though he placed a partial 90-day hold after market backlash. Japan still faces significant tariffs on cars, auto parts, steel, and aluminum. Japan’s exports rose 5.9%, driven by strong sales of vehicles and computer chips, while imports increased 4.7%, partly due to a weaker yen. In March alone, Japan had a 544 billion yen ($4 billion) trade surplus, with exports to the U.S. up 3% and exports to Asia up 5.5%. A drop in exports to China was offset by gains to Hong Kong, Taiwan, and South Korea, likely due to rerouted trade to avoid U.S. tariffs.
Asahi: https://www.asahi.com/ajw/articles/15714933
Business News
▶ Japan firm seeks to ease hiring process for foreign truck drivers
12 Apr, 2025
Japanese logistics consulting firm Funai Soken Logistics is launching a program to recruit foreign truck drivers, starting with tours in Bangladesh, to address Japan's severe driver shortage. The company will provide pre-arrival training, language support, and post-arrival assistance, including help with visas and local paperwork. The goal is to recruit 90 drivers this year and expand to other Asian countries like Indonesia, the Philippines, and Nepal, aiming for 200 hires annually. The initiative comes as new labor laws and visa changes impact Japan's trucking industry, which is projected to face a 34% shortfall in transport capacity by 2030.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Japan-immigration/Japan-firm-seeks-to-ease-hiring-process-for-foreign-truck-drivers
▶ Self-Driving Taxis to Begin Test Runs in Tokyo; Waymo, Others to Operate 25 Vehicles in Various Wards
12 Apr, 2025
Waymo, along with two partner companies including Tokyo-based taxi firm Nihon Kotsu, will begin test runs of self-driving taxis in Tokyo starting Monday. Twenty-five vehicles will operate in seven wards, including Chiyoda and Minato, collecting data to adapt the technology to Japan's traffic rules. The initiative aims to address Japan’s transportation challenges amid a declining population and labor shortages. A demonstration run was held in Minato Ward, with officials emphasizing safety as a top priority.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250412-248435/
▶ 7-Eleven stores of future to open at Osaka expo, with avatar robots
12 Apr, 2025
Seven-Eleven Japan has opened two futuristic concept stores at the Osaka World Expo to showcase its 2030 vision. The stores feature remotely operated avatar robots called "newme," developed by Avatarin Inc., a startup founded by ANA Holdings Inc. These robots assist customers at self-checkout kiosks while being controlled by staff from remote locations. The stores also incorporate eco-friendly technology, including piezoelectric flooring that generates electricity from footsteps and hydrogen-powered smoothie machines. All transactions are cashless, and product packaging is available in Japanese, English, Chinese, and Korean to serve global visitors.
▶ Indonesia's Surge draws investment from NTT East in fiber optics push
12 Apr, 2025
Japan’s NTT East has agreed to invest in Indonesian digital infrastructure provider Surge by acquiring a 49% stake in its fiber-optic subsidiary, Weave. The partnership aims to expand Weave’s current reach from 200,000 to 40 million households across Indonesia, particularly by leveraging cost-effective fiber installations along railway lines. NTT East will also support engineer training by sending staff to five training centers in Java. The collaboration includes plans to introduce AI and digital services. The move aligns with Indonesia’s national push to improve broadband access, especially for low-income households.
Nikkei Asia: https://asia.nikkei.com/Business/Business-deals/Indonesia-s-Surge-draws-investment-from-NTT-East-in-fiber-optics-push
▶ KDDI Unveils 'au Starlink Direct': Satellite-to-Smartphone Service Set to Launch
14 Apr, 2025
On April 10, 2025, KDDI President and CEO Hiroji Matsuda announced the launch of "au Starlink Direct," Japan’s first direct satellite-to-smartphone communication service. Developed in partnership with SpaceX, the service enables basic messaging, emergency alerts, location sharing, and even AI assistant access in areas without cellular coverage — as long as the sky is visible. The service aims to close Japan’s mobile coverage gap (currently 60% by land area) and improve connectivity during disasters. It reflects KDDI’s vision to connect people "anywhere, anytime" and will expand to support data services later this year.
▶ Japan's PayPay ties up with BigPay, 3 more digital payment platforms
15 Apr, 2025
Japanese e-payment service PayPay has partnered with four overseas platforms—BigPay, K PLUS, Bluecode, and Kaspi.kz—to allow tourists from six countries to use their local apps in Japan. This brings PayPay's global partners to 25 across 14 countries and regions. Originally partnering with AliPay in 2018, PayPay now collaborates with services from seven of Japan’s top 10 tourist source countries, aiming to meet growing demand from international visitors.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Japan-s-PayPay-ties-up-with-BigPay-3-more-digital-payment-platforms
▶ 2025 Expo Osaka: Flying Car Makes Debut Flight; Vehicles Designed by Different Companies Set to Fly Around Venue
15 Apr, 2025
A flying vehicle named Hexa successfully completed a demo flight at the 2025 Osaka-Kansai Expo, flying about 10 meters above the ground for seven minutes. Developed by U.S.-based Lift Aircraft and operated by Marubeni, Hexa is one of four air mobility vehicles scheduled to demonstrate flights during the Expo. Other aircraft from SkyDrive, Vertical Aerospace, and a joint project by ANA Holdings and Joby Aviation will also conduct demo flights throughout the event.
Yomiuri: https://japannews.yomiuri.co.jp/society/general-news/20250415-248909/
▶ Industry-First Intelligent Power Module Developed to Enable Energy-Saving Home Appliances
— New Power Device Aims to Reduce Household Electricity Consumption —
15 Apr, 2025
Mitsubishi Electric, with support from Japan’s NEDO program, has developed an innovative Intelligent Power Module (IPM) that significantly reduces the energy consumption of air conditioner compressor inverters. This marks the industry’s first use of a hybrid design combining traditional silicon (Si) and high-efficiency silicon carbide (SiC) power semiconductor chips within a single module. By optimizing the performance of both chip types based on operating conditions, the new IPM achieves an estimated 41% reduction in annual energy consumption compared to conventional Si-only modules. The module maintains the same size as existing components, making it easy to retrofit into current systems. Mitsubishi Electric plans to begin sample shipments in April 2025, aiming to meet Japan's revised 2027 energy efficiency standards for home appliances. This development supports Japan’s broader efforts to reduce greenhouse gas emissions and achieve carbon neutrality by 2050.
NEDO (Japanese): https://www.nedo.go.jp/news/press/AA5_101841.html
Mitsubishi Electric: https://www.mitsubishielectric.com/news/2025/0415.html?cid=rss
▶ Japan to give India E5 and E3 shinkansen for free
15 Apr, 2025
Japan will donate E5 and E3 series Shinkansen trains to India in early 2026 to serve as inspection vehicles for the Mumbai-Ahmedabad high-speed rail project. The move supports Japan’s goal of showcasing its Shinkansen technology and maintaining a presence in India's rail development. The donated trains will help gather data on conditions like heat and dust, ahead of the planned adoption of JR East's E10 series in the early 2030s. Delays in E10 deliveries and cost concerns had led India to consider using domestic trains, prompting Japan to offer the E5/E3 trains for free to break a negotiation deadlock. Japan is also funding around 80% of the ¥1.8 trillion project through low-interest yen loans, with additional financing under discussion during an upcoming Japan-India summit.
Japan times: https://www.japantimes.co.jp/business/2025/04/15/companies/india-high-speed-railway-shinkansen/
▶ Honda to Partially Shift Domestic Production to U.S. as Early as June Due to Tariffs
17 Apr, 2025
Honda plans to shift production of its U.S.-bound five-door Civic hybrid from Japan to its Indiana plant as early as June to offset the impact of new U.S. car tariffs under the Trump administration. Production began in February at Honda's Saitama Factory, which will continue to produce the Civic Type R for Japan and export. In 2024, about 70% of Honda’s 1.4 million U.S. sales were vehicles made in the U.S., with only a small portion exported from Japan. Honda is also considering moving production from Canada to the U.S., anticipating a potential ¥700 billion hit from the tariffs. Nissan is taking similar steps, shifting production of its Rogue model for the U.S. market from Fukuoka, Japan to Tennessee, covering about 10,000 units planned for May to July.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250417-249573/
▶ Japan automakers make joint chip push to rival China's smart cars
16 Apr, 2025
Japan’s leading automakers — Toyota, Nissan, and Honda — are joining forces through the ASRA consortium to develop a standardized chiplet design for next-generation smart vehicles by 2029. The goal is to lower costs, speed up development, and regain competitiveness in the face of rapid advances by Chinese EV makers like BYD and Geely. Japanese carmakers have fallen behind in software-defined vehicles (SDVs) due to their hardware-first approach, while Chinese companies prioritize software and integrate hardware around it. This has allowed Chinese brands to quickly gain market share in Asia with affordable, intelligent EVs. With backing of ¥41 billion ($286 million) in government subsidies, ASRA aims to create scalable, modular chips that can be used across a wide range of vehicle models. This move could help standardize development, attract more support from chip suppliers, and potentially allow Japan to play a role in setting global chip standards for the auto industry.
▶ Gas-fired power plant capacity to jump 20% in 2030, led by Asia
17 Apr, 2025
Global gas-fired power generation capacity is projected to grow by up to 20% by 2030, reaching 2,300 GW, with Asia—particularly China and India—leading the expansion. The surge is driven by rising electricity demand from AI data centers and the relatively lower environmental impact of natural gas compared to coal. Manufacturers like Mitsubishi Heavy Industries are benefiting, with the company planning to invest ¥50 billion ($350 million) to boost production capacity and workforce. Mitsubishi Heavy currently leads the global gas turbine market with a 36% share. In contrast, green hydrogen projects are facing setbacks due to high costs and slower market growth, prompting some companies to withdraw. Despite global decarbonization pledges, the push for economic growth and energy security is fueling continued investment in gas-fired plants.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Gas-fired-power-plant-capacity-to-jump-20-in-2030-led-by-Asia
▶ Tenstorrent to boost its chip design engineers in Japan over sixfold
18 Apr, 2025
Tenstorrent, a Toronto-based semiconductor design company, is expanding its presence in Japan, planning to grow its local engineering team from 15 to over 100 by the end of the year. Supported by Japan’s Ministry of Economy, Trade and Industry, the company has been training Japanese engineers in the U.S. Tenstorrent is collaborating with Rapidus, a Japanese chipmaker aiming to mass-produce advanced semiconductors in Hokkaido. CEO Jim Keller announced plans to send engineers to Rapidus’ plant ahead of prototype production expected in July or August. The company received $693 million in funding from Jeff Bezos in December.
