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The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
▶ Record 42 Women Elected in Japan’s Upper House Election; 29% of Upper House Lawmakers are Women
22 July, 2025
A record 42 women were elected in Sunday’s House of Councillors election, raising the total number of female lawmakers in the upper house to 73, or 29.4%. Women now make up 33.6% of the 125 newly elected members, up from 28% in 2022. The Constitutional Democratic Party secured the most female seats (12), followed by other major parties. A total of 152 women ran in the election.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250722-270973/
▶ Japan leans into homegrown AI amid rising competition
23 July, 2025
Japan is adopting a top-down approach to AI development, focusing on "sovereign AI" to enhance national self-sufficiency and reduce geopolitical risk. Backed by major investments and government initiatives like the Generative AI Accelerator Challenge and the AI Safety Institute, Japan aims to use AI for disaster response, labor shortages, and business innovation. However, adoption lags behind countries like China and the U.S., with only 26.7% of people using generative AI as of fiscal 2024. Despite cautious uptake, companies like SoftBank and Fujitsu are pushing forward. McKinsey says AI’s full economic impact depends on broader organizational and structural changes.
Japan times: https://www.japantimes.co.jp/business/2025/07/23/tech/mckinsey-generative-ai-report/
▶ Courtesy Call on Prime Minister ISHIBA Shigeru and presentation of the Joint Recommendation by the Japan-EU Business Round Table (BRT) Co-Chairs
23 July, 2025
On July 23, Prime Minister Ishiba met with Japan-EU Business Round Table (BRT) Co-Chair Mr. Endo and acting Co-Chair Mr. Grossas. Mr. Endo presented the BRT’s joint recommendations from its 26th Annual Meeting, emphasizing Japan-EU cooperation on industrial competitiveness and economic security. Mr. Grossas highlighted the need to address geopolitical and technological challenges for sustainable growth. Prime Minister Ishiba expressed support for deepening Japan-EU ties and welcomed the BRT’s contributions.
MOFA: https://www.mofa.go.jp/ecm/ie/pageite_000001_01136.html
Prime Minister’s Office of Japan: https://japan.kantei.go.jp/103/actions/202507/23shukou.html
▶ The 30th Japan-EU Summit
23 July, 2025
On July 23, Prime Minister Ishiba held the 30th Japan-EU Summit with European Council President Costa and European Commission President von der Leyen in Tokyo. They reaffirmed strong Japan-EU ties and agreed to deepen cooperation on security, economic resilience, and global governance. Key outcomes included launching the Japan-EU Competitiveness Alliance, progressing on a Security of Information Agreement, and enhancing defence and maritime collaboration. They also discussed global issues such as climate change, economic security, and regional affairs, including Ukraine and East Asia. A joint statement and attachments outlining deliverables and priorities were issued.
MOFA: https://www.mofa.go.jp/erp/ep/pageite_000001_01137.html
Prime Minister’s Office of Japan:https://japan.kantei.go.jp/103/actions/202507/23eukyougi.html
▶ Japan bets big on ultrathin, ultralight solar panels
23 July, 2025
At Expo 2025 Osaka, Japan is showcasing film-like perovskite solar panels on the roof of a bus terminal, highlighting its ambition to lead the next generation of solar technology. These lightweight, flexible panels are seen as a solution to Japan’s space constraints and overreliance on Chinese polysilicon. Backed by the government and companies like Sekisui Chemical, Japan aims to make perovskite solar cost-competitive by 2040. However, challenges include high production costs, limited market demand, and global competition, particularly from China, which dominates the solar supply chain. Japan sees this technology as key to its renewable energy goals and national security, but scaling it up will require sustained government support and global market expansion.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Tech-Asia/Japan-bets-big-on-ultrathin-ultralight-solar-panels
▶ EU and Japan aim for deeper defense cooperation in high-tech arena
23 July, 2025
EU foreign policy chief Kaja Kallas announced that the EU and Japan plan to launch a Defense Industry Dialogue in early 2026 to enhance cooperation in areas like cyber, drones, and dual-use technologies. This initiative aims to address shared defense challenges and promote industrial collaboration, potentially allowing Japanese firms to participate in EU defense projects. Amid rising global tensions—including Russia's war in Ukraine and threats in the Indo-Pacific—both sides emphasized the need to strengthen their defense industries and diversify partners. They also began negotiations on a classified information-sharing agreement and agreed to boost space cooperation.
Japan times: https://www.japantimes.co.jp/news/2025/07/23/japan/politics/eu-japan-defense-kaja-kallas/
▶ Japan, U.S. reach deal on reduced 15% auto, "reciprocal" tariffs
23 July, 2025
Japan and the U.S. reached a trade agreement imposing a 15% tariff on Japanese autos and other goods, lower than the initially proposed 25%. In return, Japan agreed to increase U.S. rice imports and invest $550 billion in the U.S., targeting sectors like semiconductors and pharmaceuticals. While the deal avoids quotas on Japanese car imports, it may still negatively impact Japan's GDP and key industries like autos and agriculture. The agreement reflects Japan's attempt to protect national interests amid U.S. tariff pressure, especially from President Trump’s aggressive trade policies
Kyodo: https://english.kyodonews.net/articles/-/57793
▶ Corporate Japan's ROE projected to hit lowest level in 5 years
24 July, 2025
Return on equity (ROE) at Japan-listed companies is projected to drop to 8.5% in fiscal 2025, the lowest in five years, due to falling profits, strong yen, U.S. tariffs, and growing cash reserves. While high-performing firms like Sanrio and Nomura Research Institute show strong ROE, most companies—especially in manufacturing—struggle with capital efficiency. Compared to rising ROE levels in the U.S. (18%) and EU (13%), Japan lags behind. Investors are concerned about underutilized capital, and experts stress the need for digital transformation and structural reform to improve returns and valuation.
Nikkei Asia: https://asia.nikkei.com/Business/Markets/Corporate-Japan-s-ROE-projected-to-hit-lowest-level-in-5-years
▶ Japanese governors call on nation to welcome more immigrants
24 July, 2025
Japan’s prefectural governors have called on the national government to expand immigration to support regional industries and communities amid a declining birthrate and labor shortage. At a National Governors' Association (NGA) conference, they urged flexible policies under the upcoming 2027 Employment for Skill Development program, replacing the criticized technical intern system. The governors also pushed for better support systems, simplified procedures, and the creation of a national agency for multicultural integration. Some warned against rising xenophobia, noting it could mirror issues seen in the EU if left unaddressed. Foreign workers are increasingly vital to Japan's economy and society.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Japan-immigration/Japanese-governors-call-on-nation-to-welcome-more-immigrants
▶ Rapidus Achieves Significant Milestone at its State-of-the-Art Foundry with Prototyping of Leading-Edge 2nm GAA Transistors
18 July, 2025
Rapidus Corporation has begun prototyping 2nm gate-all-around (GAA) transistors at its IIM-1 foundry in Japan. The company uses advanced technologies like fully single-wafer processing and EUV lithography to enhance efficiency and yield. It is the first in Japan to install EUV tools and successfully completed EUV exposure in April 2025. Rapidus will release a 2nm process development kit to select customers in early 2026 and aims to start mass production in 2027.
▶ SJC2 optical submarine cable in operation
18 July, 2025
KDDI, the SJC2 consortium, and NEC have completed construction and launched operations of the Southeast Asia-Japan Cable 2 (SJC2), a 10,500 km high-capacity submarine cable system linking 10 locations across Asia. Built by NEC, the system uses advanced optical wavelength division multiplexing to deliver over 126 Tbps of data capacity. SJC2 enhances regional connectivity, redundancy, and low-latency performance, supporting growing demands from AI, cloud computing, and real-time data exchange. NEC played a central role as system integrator in the project.
KDDI: https://newsroom.kddi.com/english/news/detail/kddi_nr-662_4027.html
NEC: https://www.nec.com/en/press/202507/global_20250718_03.html
▶ Japanese Businesses Expanding Space-Related Operations; Government Making Plans to Increase Public Support
19 July, 2025
More Japanese companies—including automakers, banks, and startups—are entering the space industry, seeing new opportunities in national security, telecommunications, and innovation. Honda recently became Japan’s first private firm to launch and land a reusable rocket. Despite this momentum, Japan still lags behind the U.S. and China in rocket launches and commercial space activity. High costs and slow commercialization are major hurdles. The Japanese government aims to double its domestic space market to ¥8 trillion by the early 2030s, but public-private cooperation and faster innovation are key to remaining competitive.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250719-270203/
▶ Softbank to begin trial runs of ‘base stations in the sky’ in 2026
20 July, 2025
SoftBank Corp. will begin trials in 2026 of its High Altitude Platform Station (HAPS), a telecommunications system that operates at 20 km altitude using helium-filled airships. Manufactured by U.S.-based Sceye Inc., each HAPS covers a 200 km area, providing voice, internet, and drone connectivity—especially useful in disasters and remote areas. Full service is expected by 2027 or later. HAPS complements satellite and ground networks by restoring communications within hours after a disaster.
Asahi: https://www.asahi.com/ajw/articles/15878564
▶ Japan industry, academia team up to build hulking rescue robots
20 July, 2025
Murata Manufacturing, Waseda University, and two other Japanese firms are developing a humanoid search and rescue robot using entirely Japan-made components. The robot will stand 3 meters tall, walk at 5 km/h, and lift over 100 kg, aimed at aiding disaster response in Japan’s aging society. Once a robotics leader, Japan is seeking to regain its global position with a pilot model by 2026 and mass production by 2029. This would be the world’s first humanoid robot designed specifically for search and rescue missions.
Mainichi: https://mainichi.jp/english/articles/20250720/p2g/00m/0bu/016000c
▶ Equity investment to fluorite exploration project in Australia ―Contribution to strengthening and diversifying the supply chain―
22 July, 2025
JOGMEC and Sumitomo Corporation have established Japan Fluorite Corporation to invest up to AUD 11 million in the fluorite exploration project through Fluorite SPV, with JOGMEC contributing 49%. The project, currently in exploration, aims to produce 140,000 tons of chemical-grade fluorite concentrate annually once developed. Sumitomo will have rights to offtake up to 15% of production initially and can acquire up to 100% by funding later stages. Fluorite is vital for hydrofluoric acid, used in semiconductor manufacturing, making stable supply important for Japan’s resource security.
JOGMEC: https://www.jogmec.go.jp/english/news/release/news_08_00042.html
▶ AI takes center stage at Japan game developers conference
23 July, 2025
At Japan’s largest game developers conference, generative AI tools took center stage. AI is being used to assist with game idea generation, scriptwriting, and image/video creation, helping reduce costs and improve efficiency. However, concerns over copyright risks and proper usage guidelines remain. Companies are beginning to implement internal policies and training programs to ensure safe and responsible AI use. Smaller developers also rely on AI for idea support, but cautious attitudes persist due to intellectual property concerns.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250719-270203/
▶ Prototype divertor outer vertical target for the ITER fusion experimental reactor is completed and the sample has passed the ITER Organization's certification test
23 July, 2025
Hitachi and Japan’s QST have completed a second prototype of a key fusion reactor component—the outer vertical target for the ITER experimental fusion reactor in Southern France, a major international project involving the EU and other countries. This component is part of the divertor, which manages heat and waste in a fusion reactor and must withstand extreme conditions, including heat loads up to 20 MW/m² and strong electromagnetic forces. Using advanced welding, precision machining, and heat-resistant materials like tungsten and copper alloy, Hitachi developed a high-quality, defect-free assembly process. A sample passed ITER’s rigorous certification in March 2025. Japan is playing a major role in ITER, and Hitachi and QST plan to use these technologies to support future fusion energy projects and startups.
Hitachi: https://www.hitachi.com/New/cnews/month/2025/07/250723.html
▶ Sony-Honda using AI to advance self-driving and entertainment
24 July, 2025
Sony Honda Mobility (SHM), a joint venture formed in 2022, is preparing to launch its first electric vehicle, the Afeela 1, in California this year, with U.S. deliveries starting mid-2026 and Japan to follow. SHM aims to differentiate itself through AI-driven autonomous driving and in-vehicle entertainment, integrating services like Spotify, Zoom, and Epic Games. SHM is also partnering with Microsoft to develop a conversational AI agent using Azure OpenAI. President Izumi Kawanishi emphasized AI’s growing role in mobility and noted strong pre-sale interest. Despite a ¥52 billion ($356M) operating loss, attributed to R&D investment, SHM remains committed to building a globally competitive vehicle.
▶ Tokai National Higher Education and Research System - Nagoya University
24 July, 2025
Fujitsu and Nagoya University have developed an AI-based simulation technology called the Social Acceptance Model-based Simulation (SAMSIM) to promote new transportation services like ride-sharing. This technology models psychological factors affecting residents’ willingness to use such services and evaluates strategies, such as targeted public awareness and service expansion, to increase adoption. Tested in Kawanishi Town, the simulation predicted a 20% boost in usage intent through optimized campaigns and increased vehicle availability. Fujitsu and Nagoya University plan to continue demonstrations and expand the technology’s application to other public services by fiscal 2026.
Fujitsu: https://global.fujitsu/en-global/newsroom/gl/2025/07/24-01
Jiji: https://jen.jiji.com/jc/eng?g=ind&k=2025072400400
▶ Establishment of the MUFG Bank-JICA Sustainable Finance Framework
24 July, 2025
MUFG and MUFG Bank, together with partner banks in Southeast Asia and the Japan International Cooperation Agency (JICA), have established a Sustainable Finance Framework to support environmentally and socially beneficial projects. The Framework covers green, social, and sustainability loans and has been validated by Moody’s for alignment with international sustainable finance standards. It aims to promote sustainable finance in developing countries and contribute to achieving the Sustainable Development Goals (SDGs).
Mitsubishi UFJ Financial Group (PDF): https://www.bk.mufg.jp/global/newsroom/news2025/pdf/newse0724.pdf
Published: September 2025
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.
