The EU Business Hub @ Smart Energy Week Autumn 2025 Business Mission, taking place from September…
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
▶ Japan turns to AI for help in analyzing 5,000 government projects
26 Apr, 2025
Japan plans to use artificial intelligence to analyze over 5,000 public projects and initiatives, focusing on targets, outcomes, and budgets. Starting in fiscal 2028, AI will review existing data on public works and subsidies to improve policy design and funding allocation. Initially, AI will analyze project reports to enhance accuracy and offer suggestions for cost-cutting and efficiency. It will help evaluate project outcomes, identify shared technologies, and manage projects more effectively. Ultimately, AI will assist in policy-making from the beginning of projects, optimizing budgets and improving service efficiency.
▶ PFAS levels found to exceed gov't cap in 22 of Japan's 47 prefectures
26 Apr, 2025
A government survey in fiscal 2023 found high levels of potentially harmful PFAS chemicals in rivers and groundwater across 22 of Japan’s 47 prefectures. Out of about 2,000 sites surveyed, 242 exceeded the provisional safety limit, with the highest level—26,000 nanograms per liter—found in Settsu, Osaka. PFAS are synthetic chemicals used in everyday products like non-stick cookware and water-repellent clothing. Though health effects are still being studied, some researchers warn of possible cancer risks. Contamination is often found near factories and military bases, but sources were confirmed in only four cases. Measures like switching drinking water sources have been taken where needed.
Mainichi: https://mainichi.jp/english/articles/20250426/p2g/00m/0na/014000c
▶ Japan to ship CO2 emissions to Malaysia for storage underground
28 Apr, 2025
Japan and Malaysia are nearing an agreement to store liquefied carbon dioxide underground in Malaysia, starting around 2030. Companies like Mitsui & Co., Kansai Electric Power, and Malaysia’s Petronas are involved, with plans to store up to 10 million tonnes annually in depleted offshore gas fields. This would be Japan’s first international carbon sequestration deal. Aiming for net-zero emissions by 2050, Japan plans to store up to 240 million tonnes of CO₂ yearly, but limited domestic capacity makes overseas cooperation essential. A formal agreement with Malaysia is expected by summer, and Japan is also exploring similar deals with countries like Australia.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Environment/Japan-to-ship-CO2-emissions-to-Malaysia-for-storage-underground
▶ Japan, Vietnam to launch vice-ministerial foreign, defense dialogue
28 Apr, 2025
On April 29, 2025, Japanese Prime Minister Shigeru Ishiba and Vietnamese Prime Minister Pham Minh Chinh met in Hanoi and agreed to establish a vice-ministerial-level foreign and defense dialogue ("2+2") and boost cooperation on defense equipment and technology, in response to China’s growing military presence. Vietnam may become the fourth ASEAN country to receive support under Japan’s Official Security Assistance (OSA) program. The two leaders also agreed to enhance maritime security cooperation and maintain a commitment to multilateral free trade, amid global trade tensions driven by U.S. tariffs. Economically, Japan and Vietnam plan to explore cooperation in semiconductors, AI, quantum tech, decarbonization, and digitalization. Ishiba emphasized Japan's role as a long-term partner for Vietnam and expressed willingness to address concerns about U.S. tariffs. Ishiba’s visit to Vietnam is part of a broader effort to strengthen Japan’s ties with Southeast Asia and follows earlier visits to other ASEAN countries.
Mainichi: https://mainichi.jp/english/articles/20250428/p2g/00m/0na/019000c
MOFA: https://www.mofa.go.jp/s_sa/sea1/vn/pageite_000001_00930.html
▶ Japan Wary of ASEAN Members Shifting Away from U.S.; Ishiba Hopes to Limit Spread of China’s Economic Influence
30 Apr, 2025
Japanese Prime Minister Shigeru Ishiba visited Vietnam and the Philippines to strengthen ties with ASEAN amid rising distrust toward the U.S. due to President Trump’s tariff policies. Japan aims to reassure Southeast Asian nations of its support, counter growing Chinese influence, and maintain regional stability under the vision of a "free and open Indo-Pacific." Ishiba emphasized economic support and cooperation, especially in defense with the Philippines, while avoiding direct criticism of the U.S. His diplomacy seeks to calm tensions caused by U.S. policies without isolating Washington, while also countering China’s attempts to position itself as a defender of free trade in the region.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20250430-251980/
MOFA: https://www.mofa.go.jp/s_sa/sea1/vn/pageite_000001_00930.html
▶ Japan to begin surveying for natural hydrogen deposits
30 Apr, 2025
Japan’s JOGMEC will begin exploring for natural hydrogen deposits by fiscal 2025, aiming to secure a low-cost, carbon-free fuel source. Unlike hydrogen produced from fossil fuels or renewable energy, natural hydrogen forms underground through geological and biological processes and emits no CO₂ when burned. Japan, with rock formations like peridotite and serpentinite, is considered geologically suitable. JOGMEC will analyze existing geological and drilling data to identify promising sites, particularly focusing on hydrogen concentration and transport feasibility. If successful, Japan could join countries like the U.S. and Mali, which are already pursuing or using natural hydrogen. Extraction is estimated to cost just $1 per kilogram, cheaper than green hydrogen. However, challenges include locating high-concentration deposits and developing efficient, eco-friendly extraction methods.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japan-to-begin-surveying-for-natural-hydrogen-deposits
▶ Japan eyes India joining fighter jet development with Britain, Italy
30 Apr, 2025
Japan has approached India about joining the Global Combat Air Program (GCAP), a next-generation fighter jet project currently being developed with Britain and Italy, aiming to share development costs and boost Indo-Pacific security cooperation. While India has shown interest, concerns remain about its ties with Russia and tensions with Pakistan. Expanding the program would require amending existing agreements and securing legislative approval in Japan. Saudi Arabia is also being considered as a potential partner, though Japan remains cautious due to security and geopolitical concerns.
Mainichi: https://mainichi.jp/english/articles/20250430/p2g/00m/0na/060000c
▶ 2025 Expo Osaka: Expo Utilizes Latest Technologies to Keep Venue Clean; Autonomous Trash Can Robots Tidy Up Site
01 May, 2025
At the 2025 Osaka-Kansai Expo, a smart cleaning system using a GPS-enabled app and autonomous trash can robots is keeping the 155-hectare venue clean. The app helps cleaning teams identify and manage dirty areas efficiently, while robots patrol the Grand Ring structure, collecting and sorting trash. Visitors have praised the cleanliness, and the robots—developed by Mitsubishi Electric—are also being tested for future uses like luggage transport and advertising.
Yomiuri: https://japannews.yomiuri.co.jp/society/general-news/20250501-252010/
▶ Japan, EU agree to deepen economic security cooperation
01 May, 2025
Japan and the European Union agreed to strengthen cooperation on economic security, focusing on diversifying supply chains for critical minerals used in electric vehicles and semiconductors. In their first meeting, Japanese Minister Minoru Kiuchi and EU Commissioner Maros Sefcovic emphasized reducing dependency on any single country—particularly China, which dominates global mineral processing. They also discussed U.S. trade policies, though details were not disclosed.
Mainichi: https://mainichi.jp/english/articles/20250501/p2g/00m/0na/023000c
▶ Japan eyes Greenland icebreaker mission to counter Russia, China
02 May, 2025
Japan is advancing its Arctic policy to counter growing Russian and Chinese influence by launching the Mirai II, its first icebreaker research vessel, with operations starting in 2027. Former Foreign Minister Yoko Kamikawa visited Greenland to gain support for the project, which will focus on climate research, resource exploration, and new sea routes. Japan aims to ensure the Arctic remains accessible to the international community and is strengthening ties with Europe to promote cooperation, especially amid strained relations with Russia due to the Ukraine conflict.
▶ Japan, U.S. ministers to hold intense tariff talks around mid-May
02 May, 2025
Japan and the U.S. made progress in ongoing tariff negotiations, agreeing to hold intensive ministerial-level talks from mid-May, aiming for an early, mutually beneficial deal. Japanese negotiator Ryosei Akazawa met U.S. Treasury Secretary Scott Bessent and other officials in Washington, deepening discussions on tariffs, non-tariff barriers, trade expansion, and economic security. Japan is expected to propose increased imports of U.S. corn, soybeans, and possibly rice, while considering easing auto import regulations. The talks follow President Trump’s partial tariff relief for the U.S. auto industry, with broader duties still in place but paused until July.
▶ Toyota picks Huawei, Honda uses DeepSeek for China EVs
26 Apr, 2025
Toyota, Nissan, and Honda are partnering with Chinese tech companies to develop smarter electric vehicles (EVs) as they face increasing competition in China’s rapidly evolving market. Toyota’s bZ7 sedan, for example, features Huawei’s HarmonyOS and a Level 2 advanced driver-assistance system (ADAS) developed with Chinese startup Momenta. Nissan and Honda are also collaborating with local companies to integrate ADAS and AI technologies. These partnerships aim to help the Japanese automakers catch up with the fast-growing EV market in China, where competition is shifting toward advanced technologies like self-driving features and smart cockpits. While these cars may not be globally competitive due to technological rivalries, the expertise gained in China will support their global expansion.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Electric-cars-in-China/Toyota-picks-Huawei-Honda-uses-DeepSeek-for-China-EVs
▶ Mizuho Bank, Kubota Form Tie-Up for Greenhouse Gas Trading; Aims to Reduce Emissions
27 Apr, 2025
Mizuho Bank and Kubota Corp. have formed a partnership to reduce greenhouse gas emissions in agriculture and promote emissions trading using Japan’s J-Credit system. Kubota will encourage around 30,000 rice farmers to adopt water-draining methods that reduce methane emissions by up to 30%. These reductions will be certified and sold as emission credits by Mizuho Bank to major corporate clients. Farmers will be compensated based on their emission cuts. The initiative supports Japan’s upcoming full-scale emissions trading system set to launch next fiscal year.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250427-251374/
▶ "Flying car" demos at Osaka Expo halted as part falls mid-flight
27 Apr, 2025
Demonstrations of "flying cars" at the 2025 World Exposition in Osaka have been suspended for safety checks after a part fell from a Hexa single-seater during a mid-flight demonstration on April 26, 2025. The flight landed safely, and an investigation is underway. The event's organizers have halted further flying vehicle demonstrations until safety can be confirmed. Initially, four operators had planned to offer flying taxi services to the expo, but safety concerns led them to abandon those plans. The expo, which began on April 13, will run until October 13.
▶ Japanese joint venture to supply green jet fuel to Taiwan's EVA Air
28 Apr, 2025
Saffaire Sky Energy, a joint venture between Japan's Cosmo Oil and JGC Holdings, will begin supplying sustainable aviation fuel (SAF) made from waste cooking oil to Taiwan’s EVA Air starting in fiscal 2025. This will be the first large-scale SAF production in Japan, contributing to the aviation industry's goal of net-zero emissions by 2050. The company also has SAF supply agreements with several major airlines, including Starlux, Japan Airlines, ANA, DHL, Delta, and Finnair.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japanese-joint-venture-to-supply-green-jet-fuel-to-Taiwan-s-EVA-Air
▶ Mizuho to steer Japanese companies to India for green investments
29 Apr, 2025
Mizuho Bank has partnered with Invest India to support Japanese companies investing in sectors like clean energy in India. This marks Invest India’s first collaboration with a Japanese financial institution. A Japan-focused office will be set up to assist with investment procedures and business expansion. Mizuho will connect decarbonization-focused Japanese firms with opportunities in India and provide financing support. The partnership aims to begin with sustainability-related initiatives and expand into other sectors.
Nikkei Asia: https://asia.nikkei.com/Business/Finance/Mizuho-to-steer-Japanese-companies-to-India-for-green-investments
▶ Sojitz Enters Biomethane Production and Sales Business in India
30 Apr, 2025
Sojitz Corporation is investing in IOC GPS Renewables Pvt. Ltd. (IGRPL), a joint venture between GPS Renewables and Indian Oil Corporation, to enter the biomethane production and sales business in India. IGRPL plans to operate 30 biomethane plants by FY2026–FY2027, producing 160,000 tons of biomethane annually using agricultural waste, with a total investment exceeding USD 400 million. This initiative aims to improve India’s energy self-sufficiency, reduce air pollution from open burning of crop waste, and boost farmers' incomes. Sojitz will leverage GPSR’s technical expertise and IOCL’s distribution network to expand operations across India and explore further bioenergy opportunities. The move aligns with Sojitz’s Medium-term Management Plan 2026, focusing on India and the Green Transformation (GX) sector to support the transition to a carbon-neutral society while enhancing corporate value.
Sojitz: https://www.sojitz.com/en/news/article/20250430.html
▶ Japan's Sakana AI sees opportunity with US uncertainty
30 Apr, 2025
Japanese AI startup Sakana AI, backed by Nvidia, sees rising demand for domestically developed defense-related AI due to the U.S.'s unpredictable foreign policy and growing global tensions. The company anticipates concrete applications—especially from governments and financial institutions—within six months. At a joint Japan-U.S. defense pitch event, Sakana showcased AI solutions for biosecurity and disinformation, including a tool to trace disease outbreaks via behavioral simulations. CEO David Ha emphasized the importance of strengthening defense infrastructure in democratic nations amid de-globalization. Founded in 2023, Sakana quickly became a unicorn and now aims to move from R&D into revenue generation, aligning with Japan’s broader strategy to reduce technological overdependence on foreign powers.
Nikkei Asia: https://asia.nikkei.com/Business/Technology/Japan-s-Sakana-AI-sees-opportunity-with-US-uncertainty
▶ Japan's Toyota starts collaborating with self-driving leader Waymo on autonomous cars
30 Apr, 2025
Toyota has announced a partnership with Waymo, the U.S. autonomous driving company born from Google's self-driving project, to advance automated driving technology and promote road safety. Both companies share a vision of zero traffic accidents and greater mobility access. Waymo currently operates autonomous ride-hailing services in several U.S. cities and collaborates with Uber, while Toyota is testing smart mobility solutions in its experimental Woven City near Mount Fuji. Though details of the partnership remain undisclosed, the companies are exploring ways to turn the collaboration into future products.
Asahi: https://www.asahi.com/ajw/articles/15736307
▶ Jeep, Peugeot maker Stellantis readies broad price cuts in Japan
01 May, 2025
European automaker Stellantis will lower prices in Japan by up to 500,000 yen on at least 10 models from six major brands, including Jeep and Peugeot, to boost sales amid slowing global EV demand and U.S. tariff concerns. This marks the company’s first broad price cut in Japan, where sales fell 24% in fiscal 2024 to a decade low. Despite rising material and labor costs, Stellantis sees Japan as a growth opportunity, contrasting with other automakers like Daihatsu and Nissan, which are raising prices due to the weak yen and higher import costs.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Jeep-Peugeot-maker-Stellantis-readies-broad-price-cuts-in-Japan
▶ Japan's Jera pledges stable power supply by using LNG-fired plant
01 May, 2025
Japanese energy firm Jera Co. is preparing to ensure stable electricity supply this summer by utilizing the Kawagoe thermal power station, one of the world’s largest LNG-fired plants, located in Mie Prefecture. With a capacity of 4.8 million kilowatts, the plant can adjust output quickly to balance fluctuations in solar power. As electricity demand rises in summer, the region is expected to maintain a reserve rate over 8%, ensuring stability. LNG, which emits less carbon than coal, will serve as a key transitional energy source as Japan moves toward its 2050 net-zero emissions goal.
Mainichi: https://mainichi.jp/english/articles/20250501/p2g/00m/0bu/025000c
▶ Sushiro and JFE Engineering cook up food waste-to-energy cycle
02 May, 2025
JFE Engineering is partnering with four major Japanese restaurant chains—Sushiro, Royal Host, Bikkuri Donkey, and Yakiniku King—to convert food waste into biogas for electricity generation. Food scraps collected from about 2,300 restaurants could eventually be recycled through this initiative. The biogas-produced electricity will be sold under Japan’s feed-in-tariff program, with a JFE subsidiary repurchasing and reselling it to the restaurant partners. This initiative offers cost-effective waste disposal and access to renewable energy, while helping JFE Engineering boost utilization at its biogas plants and address Japan’s low restaurant food waste recycling rate.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Sushiro-and-JFE-Engineering-cook-up-food-waste-to-energy-cycle
Sushiro (Royal Holdings/Japanese): https://www.royal-holdings.co.jp/release/upfiles/news20250502.pdf
▶ Toyota-linked parts suppliers keep up rapid pace on R&D, capex
02 May, 2025
Seven Toyota-affiliated Japanese auto parts makers, including Denso and Aisin, plan to invest over 1 trillion yen ($7 billion) in R&D and capital spending for a third consecutive year, focusing on electrification and autonomous driving. In fiscal 2025, combined R&D investment will rise 6% to 1.22 trillion yen, while capital spending will also increase 6% to 1.11 trillion yen. Denso leads with 660 billion yen in R&D, targeting semiconductors and self-driving systems. However, U.S. tariffs under President Trump have created uncertainty, and companies warn investment plans may shift depending on their financial impact.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Toyota-linked-parts-suppliers-keep-up-rapid-pace-on-R-D-capex
▶ Japan auto parts makers look at passing on tariff costs: Nikkei survey
02 May, 2025
Over half of major Japanese auto parts makers affected by new 25% U.S. tariffs are considering raising prices, according to a Nikkei survey. Of 44 responding companies, 29 export to the U.S., and 16 of those may pass on higher costs, potentially leading to more expensive vehicles and lower demand. Some companies, like NTN, have already started price negotiations, while others are absorbing costs for now. In response to the tariffs, several parts makers are considering shifting production—either to the U.S., Japan, or away from China, which faces a 145% tariff. These changes could impact regional economies in Japan, as the U.S. is its largest auto export market.
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.
