Weekly Japanese Industry and Policy News: 24 - 30 May, 2025
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Japan to adopt U.S.-style entry system for foreign visitors
24 May, 2025
Japan will launch an online travel authorization system, JESTA, by fiscal 2028 to strengthen immigration control and reduce illegal residents. Travelers from 71 visa-exempt countries must apply in advance, with criminal and immigration histories checked. The government also aims to speed up deportations and tighten refugee screening, especially for misleading applications. Critics, however, question the plan’s effectiveness and warn it may be driven more by public sentiment than data.
Asahi: https://www.asahi.com/ajw/articles/15790828
▶ Icebreakers are key to shipbuilding cooperation with US, Ishiba says
26 May, 2025
Japanese Prime Minister Shigeru Ishiba stressed the importance of icebreakers, especially for the Northern Sea Route, in advancing tariff talks and shipbuilding cooperation with the U.S. During a visit to a Maritime SDF base, he supported reviving both Japan's and America’s shipbuilding industries, possibly through a joint fund. Ishiba also emphasized the export potential of Mogami-class frigates and pledged better treatment for SDF personnel amid a staffing shortage.
▶ Japan OKs reserve fund use to curb energy bills amid inflation
27 May, 2025
Japan will allocate ¥388.1 billion ($2.7 billion) from its fiscal 2025 reserve funds to subsidize household and business energy bills this summer, aiming to ease the impact of inflation and U.S. tariffs, including a 25% auto tariff. The subsidies are part of a broader relief package worth up to ¥2.8 trillion. Prime Minister Shigeru Ishiba emphasized support for small and medium-sized businesses amid rising costs and declining profits. The subsidies are expected to reduce household energy bills by ¥1,040–¥1,260 during the summer months. Critics argue the measures aim to boost public support ahead of upcoming elections.
▶ Japan Govt to Create Guidelines for Data Leak Prevention at Research Institutes; AI R&D, Risk Management to Be Balanced
27 May, 2025
Japan’s 2025 Innovation Strategy Draft calls for state-run research institutes to create data security guidelines by fiscal year-end, especially for advanced tech and AI projects. It promotes responsible AI use, including in nursing care and agriculture, and calls for stricter oversight of researchers and critical infrastructure. The government will act if AI misuse affects citizens' rights.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250527-256396/
▶ Japan enacts law obliging firms to join CO2 emissions trading scheme
28 May, 2025
Japan's parliament has passed a law requiring 300–400 major companies to join a carbon emissions trading system starting in fiscal year 2026. Aimed at promoting decarbonization, the law targets firms emitting 100,000 tons or more of CO₂ annually, covering about 60% of national emissions. Companies will receive emission caps and must buy carbon credits if they exceed them, while those emitting less can sell surplus credits. Though the system encourages emissions reduction, it may lead to higher consumer prices.
▶ World’s First Commercial-Use Ammonia-Fueled Tugboat Completes Three-Month Demonstration Voyage
28 May, 2025
The Sakigake, the world’s first commercial ammonia-fueled vessel, completed a three-month trial in Tokyo Bay with up to 95% GHG emissions reduction. Developed by NYK and IHI Power Systems under Japan’s NEDO Green Innovation Fund, the project confirms ammonia’s potential as a next-generation marine fuel. A second ammonia-fueled vessel is planned for 2026 to further support decarbonization in shipping.
NEDO: https://www.nedo.go.jp/english/news/AA5en_100472.html
▶ Japan eyes closer ties with Philippines, Cambodia via security aid
29 May, 2025
Japanese Foreign Minister Takeshi Iwaya met with top diplomats from the Philippines and Cambodia to strengthen ties amid China's growing influence in Southeast Asia. With the Philippines, Japan aims to deepen security cooperation—calling the relationship a "near-alliance"—and agreed to hold maritime and strategic talks. Japan is also providing coastal surveillance radar to the Philippine military. With Cambodia, Iwaya discussed potential defense equipment support and encouraged a more open use of the China-funded Ream Naval Base. On the economic front, Japan pledged support for infrastructure development and trade diversification.
Mainichi: https://mainichi.jp/english/articles/20250529/p2g/00m/0na/010000c
MOFA(Cambodia): https://www.mofa.go.jp/press/release/pressite_000001_01312.html
MOFA(Philippines): https://www.mofa.go.jp/press/release/pressite_000001_01313.html
▶ Japan's shipbuilding prospects hinge on next-gen vessels as China surges
29 May, 2025
Japan's shipbuilding industry is booming, but it faces stiff competition from China and South Korea, which dominate the market with 69% and 15% of new orders, respectively. Japan holds just 7%. To stay competitive, Japanese companies are forming alliances and standardizing designs for eco-friendly ships. The government is supporting these efforts with subsidies, including 120 billion yen for zero-emission vessels. The MILES initiative, a collaboration between major shipbuilders, is working on projects like a liquefied carbon dioxide carrier to improve efficiency and speed, but Japan must act fast to keep up with global competition.
▶ Japan to draw up new cybersecurity strategy by year-end
29 May, 2025
Japan has decided to draft a new cybersecurity strategy by the end of 2025 as it prepares to implement a preemptive defense system by 2027. The strategy will focus on enhancing public-private cooperation, developing cyber talent, and strengthening international collaboration. At a recent meeting led by Chief Cabinet Secretary Yoshimasa Hayashi, officials also discussed adopting quantum-safe encryption and supporting small businesses. This follows the recent enactment of a law permitting active cyber defense, including peacetime monitoring and disabling hostile servers. The cybersecurity headquarters will be restructured under the prime minister’s leadership by the end of 2025.
Mainichi: https://mainichi.jp/english/articles/20250529/p2g/00m/0na/022000c
▶ Foreign companies bet on Japan's battery energy storage market
29 May, 2025
Foreign companies are increasingly investing in Japan's battery energy storage systems (BESS) market, drawn by the country's growing use of renewable energy. In Japan's first two long-term low-carbon power auctions, over half of the 2.4 gigawatts of capacity was awarded to foreign-owned or foreign-backed firms. Japan's renewable energy capacity has grown over 30% in the past five years, and the government expects BESS capacity to reach 23.8GWh by 2030. Foreign companies, leveraging their experience and lower costs for infrastructure, have gained a competitive edge in the auctions. However, Japan's fixed price floor in the electricity market limits opportunities for price arbitrage, which could impact future investments.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Foreign-companies-bet-on-Japan-s-battery-energy-storage-market
▶ Japan eyes US defense equipment purchases as tariff bargaining chip
30 May, 2025
Japan may purchase more U.S. defense equipment to gain leverage in tariff talks with the Trump administration. Economic Minister Ryosei Akazawa said the move could help reduce the U.S. trade deficit. Japan is also looking at importing more U.S. goods and investing in joint shipbuilding and aircraft production. Talks with U.S. officials begin Friday, ahead of a possible Ishiba-Trump summit in mid-June. A recent U.S. court ruling questioning Trump's tariffs could influence negotiations before the 9 July deadline.
▶ Japan PM says mutual understanding "deepened" with Trump over tariffs
30 May,2025
Prime Minister Shigeru Ishiba and U.S. President Donald Trump held a 25-minute phone call Thursday, deepening mutual understanding on tariffs and agreeing to accelerate ministerial-level trade talks. Ishiba emphasized building “win-win” relations and called for the removal of U.S. tariffs on Japanese goods like cars and steel. He expressed interest in a face-to-face meeting with Trump at the upcoming G7 summit. Japan’s negotiator Ryosei Akazawa will meet U.S. officials in Washington, with defense equipment purchases considered a potential bargaining tool.
MOFA: https://www.mofa.go.jp/na/na1/us/pageite_000001_00005.html
Business News
▶ NTT develops world's first 'flying lightning rod' using drones
23 May, 2025
Telecom giant NTT has developed a drone that can trigger and safely redirect lightning strikes, marking a world first. In tests in Shimane Prefecture, the drone flew into thunderclouds and successfully attracted lightning using a grounded wire and protective cage. The technology aims to protect infrastructure and people in areas where traditional lightning rods are impractical. NTT plans to enhance the system’s accuracy and explore storing lightning energy, envisioning a future “lightning-free society.”
Japan times: https://www.japantimes.co.jp/news/2025/05/23/japan/science-health/ntt-drone-lightening/
▶ Nvidia-backed startup CEO urges Japan to push Defense AI development
24 May, 2025
David Ha, CEO of Japanese AI startup Sakana AI, emphasized the need for Japan to develop its own AI for defense amid rising regional threats and a deglobalizing world. While few startups engage in defense, Ha sees strong growth potential in government collaboration. Sakana AI, backed by Nvidia, recently won a U.S.-Japan defense innovation award. The company promotes AI inspired by collective intelligence, similar to how fish move in schools.
▶ Pioneering grid innovation; Hitachi Energy and Statnett to deliver Norway's first eco-efficient transmission grid connection solution
26 May, 2025
Hitachi Energy has signed contracts with Norway’s power system operator, Statnett, to deliver SF₆-free, eco-efficient grid connection solutions in the greater Oslo area. The project supports Norway’s Net Zero goals and will help meet rising electricity demand as Oslo's population grows by 33% by 2030. The two 420 kV installations will use Hitachi’s EconiQ® gas-insulated switchgear to reduce CO₂ emissions and lifecycle costs. This collaboration reinforces both companies' commitment to sustainable energy infrastructure and the broader energy transition.
Hitachi: https://www.hitachi.com/New/cnews/month/2025/05/250528.html
▶ Ministry of Energy of Uzbekistan and MHI Sign MOU to Conduct Joint Study of Decarbonization Strategy for Uzbekistan
26 May, 2025
Mitsubishi Heavy Industries (MHI) and Uzbekistan’s Ministry of Energy (MOE) have signed an MOU to jointly study Uzbekistan’s power development needs, including upgrading gas turbines for hydrogen co-firing and evaluating new low-carbon power technologies. The two-year program, backed by Japan’s Ministry of Economy, Trade and Industry (METI), supports Uzbekistan’s 2030 goal of generating over 54% of its power from renewables. The initiative aligns with broader Japan-Uzbekistan energy cooperation to promote a realistic, multi-source energy transition.
MHI: https://www.mhi.com/news/25052602.html
▶ Upcoming completion ceremony of SC Wall Mock Up for Romania SMR Project
27 May, 2025
IHI recently completed the fabrication of steel composite (SC) side wall modules for the reactor building of the NuScale Power Modules™ (NPMs) in the RoPower nuclear power project in Romania. This work was part of Samsung C&T’s scope for the Front-End Engineering and Design (FEED) Phase 2 of the small modular reactor (SMR) project at the former coal-fired Doicesti plant. IHI, which invested in NuScale in 2021, is leveraging its manufacturing expertise to support the development of SMR technology. This milestone marks a significant step toward the first global SMR project, with IHI aiming to expand its nuclear supply chain and achieve annual sales of 100 billion yen by the 2030s.
IHI: https://www.ihi.co.jp/en/all_news/2025/resources_energy_environment/1201462_13737.html
▶ Japan offers to buy 1 trillion yen in chips during U.S. tariff talks ECONOMIC NEWS SECTION
28 May, 2025
Japan has proposed purchasing up to ¥1 trillion ($6.9 billion) worth of U.S. semiconductors, mainly from Nvidia, as part of ongoing trade talks with the U.S. to help reduce the American trade deficit. To support the imports, Japan plans to subsidize domestic tech and telecom firms operating data centers. Japan is also offering support for U.S.-based manufacturing of key chip components to strengthen bilateral supply chain resilience and economic security. The proposal comes ahead of high-level negotiations and a planned meeting between Prime Minister Shigeru Ishiba and President Trump at the G7 summit in June.
Asahi: https://www.asahi.com/ajw/articles/15801200
▶ NEC aims for U.S.-level defense with new center for cybersecurity
29 May, 2025
NEC Corp. will launch an advanced cybersecurity service in October to protect Japan’s critical digital infrastructure from growing cyber threats. The company has opened a new facility in Kawasaki to support government and corporate clients, with plans to establish similar centers globally from fiscal 2026. These hubs will form a coordinated international defense network. NEC will use proprietary AI to automate threat analysis and deliver real-time intelligence. In partnership with KDDI Corp., NEC aims to strengthen its cybersecurity capabilities using domestic technology, emphasizing the importance of self-reliance in safeguarding Japan’s digital infrastructure.
Asahi: https://www.asahi.com/ajw/articles/15757256
▶ JICA signs deal to invest in Brazilian farming fintech firm
29 May, 2025
The Japan International Cooperation Agency (JICA) has invested in Brazilian fintech company Agrolend, which provides quick financing to small and midsize farmers in Brazil, often within two days. The investment, made during a signing ceremony in São Paulo, aims to ensure stable food procurement for Japan, which imports key crops like soybeans and corn from Brazil. Agrolend, established in 2020, has already helped around 2,700 farmers by streamlining loan applications via WhatsApp. The company secured $56 million in its latest fundraising round. JICA has long supported Brazil’s agricultural development, with a focus on food security.
Japan times: https://www.japantimes.co.jp/business/2025/05/29/companies/jica-brazil-fintech/
▶ Joint Demonstration Testing of Perovskite Solar Cells Begins at Yokosuka Thermal Power Station
— Japan’s First Demonstration Testing on a Thermal Power Plant Enclosure —
29 May, 2025
JERA, Sekisui Chemical, and Sanko Metal have started Japan’s first demonstration of film-type perovskite solar cells (PSCs) installed on a thermal power plant enclosure at Yokosuka Thermal Power Station. PSCs are thin, lightweight, and flexible—ideal for surfaces where traditional silicon panels can't be used. The test builds on earlier studies of PSC durability and efficiency and includes verifying wind resistance and installation methods. With Japan supplying about 30% of the world’s iodine (a key PSC material), the technology also supports domestic energy security. JERA aims to use PSCs to support its Zero CO₂ Emissions 2050 goal.
JERA: https://www.jera.co.jp/en/news/information/20250529_2177
▶ Renesas abandons plan to produce next-generation power chips
29 May, 2025
Renesas Electronics has canceled plans to produce power semiconductors using silicon carbide (SiC) at its Takasaki plant, originally scheduled for early 2025. The decision follows a decline in electric vehicle (EV) demand and increased competition from Chinese chipmakers, who benefit from government subsidies. While SiC is ideal for EVs, the market for it grew slower than expected in 2024, partly due to reduced EV subsidies in Europe and overproduction by Chinese firms, leading to falling SiC chip prices. Renesas, struggling as a late market entrant, decided it would be difficult to achieve profitability in this environment. The company is now focusing on silicon-based chips and awaiting better market conditions. Other manufacturers, such as Rohm and Wolfspeed, are also facing challenges in the SiC market.
Nikkei Asia: https://asia.nikkei.com/Business/Tech/Semiconductors/Renesas-abandons-plan-to-produce-next-generation-power-chips
▶ Govt, Carmakers to Join Hands on Autonomous Cars With AI; New Technology Allows Greater Adaptability, Lower Cost
30 May, 2025
Major Japanese automakers, including Toyota, Honda, and Nissan, plan to jointly develop self-driving technology using generative AI, with government financial support. The goal is to catch up with the U.S. and China in this field. Unlike conventional systems, generative AI can handle unpredictable situations using camera footage, lowering costs and improving flexibility. The government will help build AI infrastructure and support data collection, with specific areas of cooperation to be decided by summer.
Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20250530-256927/
▶ Japanese suppliers face shrinking role in making iPhones
30 May, 2025
Despite U.S. President Donald Trump's push to revive domestic manufacturing through steep tariffs, the globalized production of Apple’s iPhone highlights the challenge. Assembled mainly in China but made with components from over 20 countries, the iPhone exposes the complexity of modern supply chains and how tariffs could backfire—raising costs for U.S. companies like Apple. Experts estimate that moving iPhone production to the U.S. would push prices to over $3,500, making it unfeasible due to labor and infrastructure limitations. Japanese suppliers, once central to iPhone production, now contribute less than 10% of its value, having lost ground to South Korean and Chinese rivals offering similar quality at lower costs.
Asahi: https://www.asahi.com/ajw/articles/15747500
▶ IPC Concludes Memorandum of Understanding for Development of Biomethane Production
30 May, 2025
At Expo 2025 Osaka, IHI Plant Services Corporation (IPC) and Malaysia-based biogas engineering firm MTC OREC signed an MOU to jointly develop biomethane production using IPC’s anaerobic wastewater treatment technology. The collaboration targets palm oil mill effluent (POME), a major source of methane emissions in Southeast Asia. The project will integrate IPC’s BIOPAQ®IC system with MTCO’s anaerobic lagoon technology to maximize biogas recovery. The captured biogas will be upgraded into biomethane, a low-carbon energy source, which can also be used to produce bio-ammonia and bio-methanol. This initiative aims to improve sustainability in the palm oil industry and reduce greenhouse gas emissions.
IHI: https://www.ihi.co.jp/en/all_news/2025/resources_energy_environment/1201465_13737.html
▶ Itochu to help Asian rubber farmers address EU deforestation law
30 May, 2025
Japanese trading house Itochu will launch Project Tree Indonesia in June to help Southeast Asian rubber farmers comply with the EU's anti-deforestation law (EUDR). The initiative will use geolocation and smartphone apps to verify that rubber farms weren’t established on deforested land after 2020. The system aims to trace rubber supply chains, ensuring transparency and legal compliance. Farmers will earn incentives from tire sales premiums. Itochu hopes the program will ease pressure on smallholders and expand to other companies in Indonesia and Thailand.
Nikkei Asia: https://asia.nikkei.com/Business/Markets/Commodities/Itochu-to-help-Asian-rubber-farmers-address-EU-deforestation-law
