Nissan Motor Co on Tuesday said it forecasts a net loss of 200 billion yen for the April-June quarter and apologized for the worsening performance as it faced criticism from shareholders at their annual meeting.

New President and CEO Ivan Espinosa, who took over from Makoto Uchida in April, vowed to return the business to profitability by fiscal 2026 after apologizing for the poor outlook, encumbered by high auto tariffs imposed by U.S. President Donald Trump.

He reiterated restructuring plans that include shuttering seven factories and cutting 20,000 jobs, saying that the company would release the information on which factories would be affected swiftly once decided.

Nissan has been grappling with poor sales in the United States and China, logging a net loss of 670.90 billion yen for fiscal 2024, which ended at the end of March. It initially did not issue an earnings forecast for the current fiscal year.

With Uchida also present at the meeting, shareholders repeatedly questioned his responsibility and expressed indignation at the lack of dividends in contrast to massive payouts to four former executives, including Uchida, for leaving top roles. However, Uchida declined to respond.

"Many demanded answers from Uchida and asked what the point of his attendance was if he was refusing to answer any questions," said Tsuyoshi Maruki, CEO of Strategic Capital Inc, an activist investor.

But he expressed high expectations for Espinosa, noting that he had a calm demeanor despite the tumult of the shareholders meeting, adding, "We'll just have to anticipate good results from now on."

In addition to the job cut and plant closures, Nissan is also reportedly planning to sell its headquarters building in Yokohama to help cover costs.
"I was not convinced by their explanation.

The management was avoiding responsibility," said a 76-year-old shareholder who has driven Nissan vehicles for around 50 years. "They were just putting it all on the workers and firing them."

Nissan and Honda Motor Co revealed in December plans to begin merger talks under a holding company, aiming to share the financial burden of developing electric vehicles and software to better compete with global rivals, but the talks broke down less than two months later.

However, the two automakers, along with Mitsubishi Motors Corp, have continued discussions regarding a possible collaboration on the electrification of automobiles, among other areas.
 
 

Thirty major industry associations in manufacturing sectors such as steel, electronics and textiles established a cross-industry human resources management organization to secure more highly skilled foreign workers to work in Japan.

About 7,000 companies will join the Japan Association for Human Resources in Industrial Product Manufacturing (JAIM), which will require each member company to provide a 1.5%-3% year-on-year pay raise for those who work under the specified skilled workers status.

The Economy, Trade and Industry Ministry on Wednesday recognized JAIM as a registered entity to support acceptance of the highly skilled, long-term workers.

JAIM includes 30 major manufacturing-related organizations such as the Japan Iron and Steel Federation, the Japan Electronics and Information Technology Industries Association and the Japan Textile Federation.

A similar organization has already been established in the construction industry, but JAIM, the second such organization, covers a wider range of industries.

The specified skilled workers system was launched in 2019, with 280,000 foreign nationals working under the system as of fiscal 2024. Of these, 45,000 are in the manufacturing industry, and the number is expected to quadruple from the current figure to up to 170,000 in fiscal 2028.

Many of the JAIM member firms face severe labor shortages and aim to retain workers by raising wages. Specifically, a minimum year-on-year salary growth rate per foreign worker will be set at 3% for large companies and 1.5% for small and midsized companies. JAIM will verify the employers’ performance annually through documents, and companies that fail to meet the standards will be required to raise wages the following year.

If firms do not adhere to the guidelines, they will be expelled from the association and will no longer be able to hire the specified skilled workers.

The government plans to abolish by fiscal 2027 the technical intern training program, which caused such problems as long working hours and unpaid wages.

Instead, the Employment for Skill Development Program will be established to create a favorable working environment for foreign workers and encourage their transition of residential status to specified skilled workers.
 
 

Japan's Nippon Yusen and Mitsui O.S.K. Lines said on Monday they have instructed their vessels to minimize the time spent in the Gulf as they continue to transit the Strait of Hormuz following the U.S. strikes on Iranian nuclear facilities.

The shipping companies said they are closely monitoring the situation and sharing updates with ships operating in the region.

"We are instructing our vessels to shorten their time in the Persian Gulf whenever possible, depending on their schedules," a Nippon Yusen spokesperson said.

"We will make decisions on each vessel's passage through the Strait of Hormuz on a flexible basis," he added.

MOL's safety operation support center in Tokyo has stepped up 24-hour surveillance, a company spokesperson said.

 

"We are advising vessels operating in the area to exercise maximum caution and providing them with latest information," he said, adding that their vessels have also been instructed to minimize the time in the Gulf.

President Donald Trump said the U.S. had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of the conflict in the Middle East as Tehran vowed to defend itself.

Iran's Supreme National Security Council must make the final decision on whether to close the Strait of Hormuz, Iran's Press TV said on Sunday, after parliament was reported to have backed the measure.

Iran has long used the threat of closing the Strait, through which around 20% of global oil and gas demand flows, as a way to ward off Western pressure which is now at its peak following the U.S. strikes.
 
 

Japan’s biggest banks are considering evacuating employees and their families from financial hubs in the Middle East, just days after U.S. airstrikes on Iran increased risks in the region.

Mitsubishi UFJ Financial Group has started to pull the families of staff out of locations including Dubai, and will consider evacuating workers if they need to accompany them, a spokesperson said Monday. Japan's biggest bank has also halted unnecessary travel in and out of the region, it said.

After the United States on Saturday launched attacks on nuclear facilities in Iran, Japanese companies are rushing to protect their employees and brace local operations for the fallout from any potential retaliation by the Islamic Republic.

Mizuho Financial Group said it urged employees in the region to exercise caution, and has started to coordinate individual evacuations. Sumitomo Mitsui Financial Group is looking to bring its staff from locations including Qatar and the United Arab Emirates back to Japan.

In the UAE, the twin hubs of Dubai and Abu Dhabi have lured banks and hedge funds as traders embrace zero income taxes, a time zone conducive to working with both East and West and a lifestyle tailor-made for the rich.

Saudi Arabia and Qatar, meanwhile, have also been attracting financial firms in an attempt to diversify away from oil.

MS&AD Insurance Group also said it’s looking to temporarily recall employees in both UAE cities back to Japan.

Trading company Marubeni said it has suspended business trips to the Middle East and began evacuating family members of employees in certain countries.

Japan Airlines plans to reroute direct flights between Tokyo’s Haneda Airport and Doha Airport to avoid airspace above the Persian Gulf and the Gulf of Oman, which adds about 20 minutes of flight time, a spokesperson said Monday.
 
 

The Japanese and Indian governments are arranging for Indian Prime Minister Narendra Modi to visit Japan in late August for talks with Prime Minister Shigeru Ishiba, diplomatic sources said Saturday.

The two leaders are expected to agree on India's adoption of a next-generation shinkansen bullet train being developed by East Japan Railway Co. for a high-speed rail project underway in western India, the sources said.

They may also agree to revise the 2008 Joint Declaration on Security Cooperation to expand their security partnership amid China's increasing maritime prowess, they said.

The visit would be Modi's first since May 2023, when he attended the Group of Seven summit in Hiroshima, western Japan.

Modi and Ishiba also aim to strengthen communication ahead of a four-way summit with the United States and Australia under the Quad framework, which New Delhi is set to host in the fall.

The high-speed rail line will connect the western Indian cities of Ahmedabad and Mumbai, covering about 500 kilometers in roughly two hours.

The project is considered a symbol of Japan-India cooperation, as it will use Japan's renowned shinkansen technology.

JR East aims to complete the E10 series carriages in the fall of 2027 at the earliest, with commercial operation starting in fiscal 2030.

In their meeting, Modi and Ishiba are expected to confirm plans to introduce the E10 series in the early 2030s, according to the sources.

Through the revised security declaration, the two sides are expected to agree on strengthening comprehensive cooperation in broader areas, including space and cybersecurity, the sources said.
 
 

A breeze carries murmurs and quiet laughter between the rows of bright green tea leaves that are growing in dappled shade as workers harvest the plants that are destined to become matcha.

The Kokaen tea farm in Toyota, Aichi Prefecture, is just one of the many across Japan that has benefited from the sudden surge in interest in powdered green tea, but the industry is now facing uncertainty caused by U.S. President Donald Trump's tariff salvos.

"Global demand for matcha, especially from the United States is extremely high. If the tariffs are imposed, it is likely to affect sales," said Yoshitaka Noba, the third-generation owner of Kokaen.

Founded by Noba's grandfather Takakichi in 1945, Kokaen is one of the few remaining tea farms in the region better known for hosting Toyota Motor Corp and its factories. Nishio, the neighboring city, is especially known for green tea.

Japanese green tea exports have surged in the past few years, marking a record 36.4 billion yen in 2024, more than triple the value of ten years earlier.

According to the Finance Ministry, the United States took 44.2 percent of those exports, significantly more than Germany which, at 9.2 percent, was second.

Production, however, has lagged behind demand. Some 75,200 tons were grown in 2023, down by more than 20 percent compared to 15 years ago, according to the Japanese Association of Tea Production.

Experts attribute the decrease to myriad reasons, including the country's rapidly declining population.

The Japanese government has been incentivizing farmers to switch from other tea varieties to tencha, a tea leaf typically ground to make matcha, as international demand soars.

While tencha production in 2023 grew to 4,176 tons, more than twice that of 2014, it nonetheless only makes up 5.6 percent of all aracha, or unprocessed tea.

The shift to tencha has been slow as investing in new machinery, including what is required to powder the leaves, can cost hundreds of millions of yen. The process itself is very labor intensive, according to Noba.

"Tea farmers may hesitate to turn to matcha production as it's difficult to ascertain whether this is a temporary fad or whether it will end up sticking around for longer," he said.

Tencha is usually harvested between April and May. Kokaen manages eight farms totaling 1.6 hectares, hiring people to pick leaves from one of its locations spanning less than a hectare, while the remaining farms are harvested using machinery.

"Our business relies heavily on what we produce in this one month," Noba said.

The global popularity has been a boon to the Japanese tea industry, thanks in large part to matcha being a rich source of nutrients, vitamins and amino acids.

"There was a growing interest in health during the coronavirus pandemic, and people turned to matcha as they had an impression of it as being beneficial," said Yukiko Motohara from the Japan Food Product Overseas Promotion Center -- part of the Japan External Trade Organization.

Its popularity has been supplemented by its use in sweets as well, Motohara said.

JFOODO, which specializes in promoting various Japanese foodstuffs including sake and miso, has thrown its weight behind Japanese tea since 2017.

While matcha has been mainly sold in luxury supermarkets in the United States, Motohara believes that its popularity will likely grow as it becomes more widely available.

However, despite the ever-increasing attention from abroad, businesses dependent on exports to the United States have been wary about the potential effects of tariffs on profits as uncertainty mars future decisions. Tea, for example, is currently exempt from import taxes.

In what he has labeled "reciprocal tariffs," Trump unleashed a baseline 10 percent duty for almost all nations in the world and additional, higher country-specific levies for about 60 major trading partners that have trade surpluses with the United States.

The Organization for Economic Cooperation and Development recently cut its global economic growth outlook for 2025.

The tariff hikes have been paused for 90 days until early July to allow for negotiations, with Japan having sent its envoy to Washington multiple times in a bid to reach an agreement.

"Tea is not a necessity, it is considered a luxury item and is therefore influenced by economic conditions. If the U.S. economy suddenly deteriorates, the value of what we produce may also suddenly drop," Noba said.

In order to maintain the ongoing popularity of matcha abroad, JFOODO's Motohara suggests that consumers should focus on the rich history and artisan skills behind producing high-quality Japanese green tea -- tariffs be damned.

Kokaen's Noba agrees, but also hopes the tariff situation can be resolved sooner rather than later.

"Matcha isn't produced in the United States, so those who want the tea will purchase it (from us) regardless of tariffs," Noba said.

"But it would be nice for the levies to be withdrawn, for the world to become one in which we are able to deliver our product as freely as possible to anyone who wants it."
 
 

Japan is heavily exposed to turmoil in the Middle East despite being far away and removed from the hostilities, and the crisis is coming at a time when Japan is vulnerable and in no position to absorb shocks that emanate from the conflict.

According to the Petroleum Association of Japan, about three-quarters of the country's crude oil imports are shipped via the Strait of Hormuz, a choke point between the Persian Gulf and the Gulf of Oman with Iran on one shore.

Iran, which is currently in a military conflict with Israel, has threatened to close the strategic passage.

“A large portion of crude oil and gas is transported through this strait, so any disruption would hinder energy procurement and cause prices to increase sharply," said Yuki Togano, a researcher at the Japan Research Institute.

The price of oil is already up about 10% since the conflict began on June 13 — when Israel started destroying Iran's nuclear capabilities — with Brent crude oil futures now trading at about $77 a barrel.

Tagano said that if the Strait of Hormuz is closed, the price could jump to $140 a barrel. Takahide Kiuchi, executive economist at Nomura Research Institute, wrote in a recent report that the price of crude could climb to around $120 a barrel.

"This time, Iran’s regime might possibly collapse. Blocking the Strait of Hormuz might anger China and Middle Eastern nations, but when facing a situation where the regime itself could collapse, it's natural to put every possible measure on the table,” Togano said.

According to a report by Zero Carbon Analytics, a research group, Japan is the most vulnerable of the large Asian economies to the disruption of petroleum shipments through the Strait of Hormuz due to its high reliance on Middle East oil.

Prime Minister Shigeru Ishiba said on Thursday that the government will implement additional measures from June 26 to prevent gasoline prices from rising above about ¥175 per liter. The average price on Monday was ¥171.2 per liter.

Togano said that although measures to contain price increases are important, Japan needs to strengthen policies, including those related to saving energy, to contain fundamental risks arising from reliance on oil imports from the Middle East.

Japan is already facing a number of significant economic challenges. The trade war with the United States is affecting exports and threatening auto sales, which are important to the Japanese economy.

Inflation is also a problem. It is high and squeezing households, which are struggling to make ends meet as wages fail to keep up with price increases. Rising food prices are particularly worrying.

Japan’s inflation in May was 3.5%, with the price of rice having more than doubled.

If the Middle East conflict continues to push up oil prices, the yen is expected to decline as dollar-buying must increase to pay for energy imports.
Even though the yen is traditionally seen as a safe-haven asset, the dollar seems to be attracting higher demand for those seeking a refuge from turmoil, Tsuyoshi Ueno, an economist at NLI Research Institute, wrote in a report on Thursday.

On Friday, the yen traded at ¥145.3 to the dollar, from about ¥143.5 when the conflict began.

Ueno points out that the yen weakened significantly after Russia invaded Ukraine in February 2022 and oil prices increased.

“If the heightened tensions in the Middle East continue for a long time and oil prices rise and remain high, it will likely become a major factor for the yen’s depreciation.”
 
 

Honda Motor Co President Toshihiro Mibe expressed his eagerness to collaborate with Nissan Motor Co and its alliance partner Mitsubishi Motors Corp during a general shareholders meeting on Thursday, after merger talks with Nissan collapsed earlier this year.

Asked about the likelihood of revisiting a merger with Nissan, which fell through due to disagreements over management structure, Mibe said it was not possible "for the time being."

Honda and Nissan, Japan's second- and third-largest automakers, as well as Mitsubishi Motors have carried on talks regarding a possible collaboration on the electrification of automobiles, among other areas. Honda and Nissan are also considering cooperation in the United States, in the face of U.S. President Donald Trump's aggressive tariff policies.

"We want to secure a leading competitive edge in the industry by maximizing the merits brought on by the collaboration," Mibe was quoted as saying, according to the exchanges at the meeting provided by Honda.

Honda and Nissan revealed in December plans to begin merger talks under a holding company, aiming to share the financial burden of developing electric vehicles and software to better compete with global rivals such as Tesla Inc. of the United States and China's BYD Co. But the talks broke down less than two months later.
 
 

U.S. President Donald Trump's bid to attract investment threatens to undermine the appetite for corporate spending in an ironic twist, with the 18-month saga over Nippon Steel Corp's buyout of United States Steel Corp showing the growing vulnerability of businesses in the U.S. market, according to analysts.

The U.S. administration's earlier blocking of the $14.1 billion takeover deal was clearly driven by political motives and corporate executives will no longer be able to make decisions regarding their U.S. operations based only business criteria, they said.

The wrangling in the high-profile case could lead global companies to think twice about making sizeable investments and acquisitions in the world's largest economy, with many moving to reduce their exposure to the U.S. market.

"I do think many companies are pausing investments and major capital expenditures, not only because of the Nippon-U.S. Steel deal but due to general uncertainty surrounding political and economic dynamics in Washington," said Zack Cooper, senior fellow at the American Enterprise Institute.

Trump had repeatedly rejected Nippon Steel's plan to take full control of U.S. Steel.

But Nippon Steel, the world's fourth-largest steel producer, and U.S. Steel, the 29th largest, said Wednesday following Trump's approval of the buyout plan that they had signed a national security agreement with the U.S. government and finalized the acquisition transaction.

Under the deal, the Japanese steelmaker is obliged to invest $11 billion by 2028 on bolstering the U.S. steelmaker's operations, far more than the previously planned $2.7 billion.

The U.S. government also obtained a golden share allowing it to veto key management decisions, such as when reducing investment, shedding production capacity in the United States or closing plants.

Nippon Steel CEO Eiji Hashimoto told a press conference on Thursday that his company had learned from a year and a half of negotiations with the U.S. government that a flexible management strategy is required.

The top executive said it had been believed that governments should not get involved in business deals.

"But now...governments are strengthening their involvement in economic and business matters through industrial policy," he said.

Hashimoto said while his company's acquisition of U.S. Steel should help the world's largest economy, trade levies will not revive its manufacturing sector.

"I believe President Trump came to the conclusion that it is necessary to utilize our power to revive the U.S. steel industry," Hashimoto said, adding the Japanese steelmaker aims to bolster its U.S. unit's overseas operations as well.

Nippon Steel has concluded a National Security Agreement with the U.S. government, pledging to invest around $11 billion by 2028 in the iconic but struggling company and keep its headquarters in Pittsburgh.

During the news conference, Hashimoto shrugged off the possibility that the security pact will hamper its U.S. business.

Trump's predecessor, Joe Biden, initially blocked the purchase of U.S. Steel on national security grounds, saying the manufacturing icon, based in Pittsburgh, Pennsylvania -- a key battleground state in the 2024 presidential election -- should be "American-owned and American-operated."

Trump also opposed the deal during the presidential race, saying the acquisition of a minority stake in U.S. Steel would not cause any issues, but foreign ownership of the company would not be good psychologically.

He ordered a new review of the deal by the Committee on Foreign Investment in the United States in April with a deadline for Trump to make a final decision initially set for June 5.

"Because predictability is insanely low right now in the United States, Japanese companies are going to cut back the percentage of their business in the country," said Keisuke Hanyuda, the chief executive of Owls Consulting Group.

While rising costs must be dealt with, "The last thing a business wants is to lose predictability," said Hanyuda, a former Japanese trade ministry official in charge of trade talks.

Nippon Steel is betting on firm demand for high-tensile strength steel in the U.S. market, capitalizing on its advanced production technology for high-end steel plates used in products such as electric vehicles.

The United States is one of three growth markets for the Japanese steelmaker, compensating for shrinking domestic demand.

Under Trump, the steel, aluminum, auto and semiconductor sectors have been targeted by specific tariffs driven by political pressures and companies in these industries should consider other markets for growth to hedge their risks, analysts say.

Earlier this month, Trump signed an order doubling the tariffs on steel and aluminum imports to 50 percent.

"I think Japanese companies will have a difficult time purchasing famous American companies in sectors that President Trump prioritizes, such as autos, steel, aluminum, and chipmaking," Cooper at the American Enterprise Institute said, though investment in other sectors may still be viable.

"But any Japanese company that is considering a major deal in the United States should develop a detailed political strategy before announcing a deal, lest they suffer similar roadblocks as Nippon Steel," he said.

The United States remains a lucrative market with high growth potential but some global companies are beginning to reduce their reliance on it after the tariffs imposed by Trump, Hanyuda said.

The European Union and the Association of Southeast Asian Nations, for example, have resumed economic partnership negotiations, while the EU is also looking at Japan, which is part of a trans-Pacific free trade pact that took effect in 2018 without the United States.
 
 

The government’s stockpiled rice can be sold under no-bid contracts to restaurant operators, ready-made meal providers and school and hospital food service businesses, announced Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi on Wednesday.

The businesses are in addition to existing retailers and rice specialist shops of all sizes.

Orders for the rice were to be accepted from 10 a.m. on Friday.
“I’d like to deal with the matter in a way that the stockpiled rice sold under no-bid contracts will reach as far and wide as possible,” Koizumi told reporters on Wednesday.

On June 10, the government decided to additionally release 100,000 tons each of rice harvested in 2020 and 2021 from its stockpile to sell under no-bid contracts.

The government began accepting orders for 120,000 tons of stockpiled rice on June 11. The government has not yet received orders for all the rice.

“It’s still not a situation that we can say [the orders] have suddenly increased by thousands of tons,” Koizumi said. “There is a need [for rice] from various food service businesses, so I suppose this additional release is an option to correspond to that need.”

Koizumi also announced a plan to conduct a survey on rice millers to grasp their rice milling results from 2022 to the present, as well as their spare capacity. The decision was made because of a slow rice distribution flow due to businesses unable to mill the stockpiled rice they purchased.

The survey will be conducted on rice millers with a capacity to mill 500 tons or more. The government will ask them to respond to the survey by next Wednesday.
 
 

The total amount of tax evasion in cases for which Japanese tax authorities filed criminal complaints in fiscal 2024 came to 8.23 billion yen, the National Tax Agency said Wednesday.

The amount fell by around 700 million yen from fiscal 2023, while the number of cases decreased by three to 98.

Japan's tax authorities are stepping up their crackdowns on people not declaring taxes, in addition to those engaging in tax evasion linked to consumption tax and international transactions.

In fiscal 2024, which ended in March this year, the number of criminal complaints on cases in which people were accused of illegally receiving consumption tax refunds reached 17, the highest in a decade. In one case, an alleged tax evader pretended to be an exporter of luxury watches.

According to the National Tax Agency, the number of cases for which taxation bureaus across the country launched investigations came to 151, down by three, while the total number of tax evasion cases including those for which authorities stopped short of filing criminal complaints stood at 150, down by one. Authorities filed criminal complaints for 65.3 pct of cases, down 1.6 pct.
 
 

The Agriculture, Forestry and Fisheries Ministry’s aim is to determine the causes of rice shortages and price hikes.

The agriculture ministry will survey about 70,000 rice-related businesses across Japan to determine the status of their sales and inventory, Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi said Tuesday.

The survey will be the first conducted under the staple food law since rice distribution was substantially liberalized in 2004. The ministry’s aim is to determine the causes of rice shortages and price hikes.

Rice inventory surveys have been conducted on large rice collectors and wholesalers, but the ministry will expand the range to cover a much wider scope.

It will ask the businesses involved to report on their collection of rice for distribution, purchases, sales and inventories as of the end of June.
“Why rice prices have skyrocketed is a matter of national concern.

It is extremely important for us at the ministry to find out the reasons, so that we can win the public’s trust in our agricultural policy,” Koizumi said at a press conference after a Cabinet meeting on Tuesday.

Businesses that provide take-away services, restaurants and food-related retailers are also planned to be part of the survey. The ministry will conduct hearings to compile the findings at the end of July.
 
 

Japan logged a 637.61 billion yen ($4.38 billion) trade deficit in May, with auto-related shipments to the United States plunging, possibly affected by higher tariffs imposed by President Donald Trump, government data showed Wednesday.

The trade balance remained in the red for the second straight month, as overall exports fell 1.7 percent from a year earlier to 8.13 trillion yen, marking the first drop in eight months, weighed down by an 11.1 percent fall in shipments to the United States.

Imports shed 7.7 percent to 8.77 trillion yen, down for the second straight month, reflecting lower prices of crude oil from the United Arab Emirates and coal from Australia, the Finance Ministry said in a preliminary report.

By region, Japan had a 451.7 billion yen trade surplus with the United States, down 4.7 percent from the previous year, as exports dropped for the second consecutive month to 1.51 trillion yen, while imports fell 13.5 percent to 1.06 trillion yen.

U.S.-bound shipments of automobiles tumbled 24.7 percent and those of auto parts plunged 19.0 percent, both in value terms. In volume, shipments of automobiles fell 3.9 percent, showing that export unit prices declined by over 20 percent.

The Trump administration imposed a 25 percent tariff on imported vehicles in April as well as on auto parts in May, in a move set to deal a blow to Japan's mainstay auto sector, which sees the United States as a key market.

A ministry official said the latest data could have reflected moves by Japanese automakers to increase shipments of lower-priced models or cut export prices of their products in response to heavier tariffs.

"I believe the effects of the tariffs are gradually emerging, as car exports also declined in volume terms," said Takafumi Fujita, an economist at the Meiji Yasuda Research Institute.

Fujita said auto exports are likely to remain weak due to the uncertain outlook of Japan-U.S. tariff negotiations and they could negatively affect the Japanese economy, given the significant role of the industry.

With China, Japan remained in the red for the 50th consecutive month, logging a deficit of 624.87 billion yen in the reporting month, expanding 17.2 percent from the year before. Exports to the country shed 8.8 percent to 1.44 trillion yen and imports fell 2.2 percent to 2.07 trillion yen.

Japan's trade surplus with the rest of Asia, including China, ballooned more than 12-fold to 313.35 billion yen.

A deficit of 308.9 billion yen was recorded with the European Union, remaining in the red for 16th consecutive month.
 
 

Vietnam and Thailand, which are among the world’s top three rice exporters, are expecting an increase in their exports of rice to Japan.

In both countries, production of japonica rice, which is the same short-grain variety as that produced in Japan, has been expanding amid a boom in washoku Japanese cuisine.

The countries aim to turn the surging rice prices in Japan into a business opportunity.

In a supermarket in Bangkok that is part of the Tops group, a major retail chain in Thailand, five-kilogram packs of japonica rice produced in the country were sold for 275 baht (about ¥1,200).

The price is much lower than that in Japan. In other Japanese supermarkets in Thailand, Sasanishiki and other Japanese-brand rice, harvested in Thailand, were being sold at similar prices.

The climate in Thailand is warm all year round and thus rice can thrive there. Though the main variety grown is indica long-grain rice, recently an increasing number of farmers have begun growing the japonica variety.

A 44-year-old farmer who has grown the Koshihikari brand of rice from Japan for a year said that he can sell japonica rice at double the price of Thailand’s indica rice and his profit margin is high. In his rice paddies, it is possible to harvest rice three times a year, he said.

The export value of rice from Thailand to Japan in 2024 increased 1.3-fold from 10 years ago to $183 million (about ¥26.5 billion). Currently, most of the exports are indica rice and it is assumed that much of the production of japonica rice is for Thailand’s domestic market.

The Thai government is paying attention to Japan’s rice market situation. Thai Commerce Minister Pichai Naripthaphan said that the Thai government wants to exploit a market where Thai rice can be sold at high prices and increase rice exports.

According to an estimate announced by the U.S. Agriculture Department in May, the total amount of global rice exports in fiscal 2024 was 61.4 million tons. By export volume, India was ranked top with a share of about 40%, followed by Vietnam at 13% and Thailand at 11%.

On June 5, the Vietnam Rice Industry Association (VIETRISA) exported for the first time 500 tons of rice of a new brand, “Low-emission Green Vietnamese Rice” of the japonica variety. Its selling point is that greenhouse gases emitted during its growth can be reduced.

The new brand of rice was cultivated with an eye on sales in Japan, where consumers are environmentally conscious and quality standards are strict.

VIETRISA Chairman Bui Ba Bong said that Japan’s current rice shortage is a good opportunity for Vietnam-made rice to enter the high-end market. VIETRISA aims to continuously supply rice to the Japanese market.

When Japan imports rice, a tariff of ¥341 per kilogram is imposed on amounts exceeding a tariff-free quota called “minimum access.”

But Japanese companies, mainly trading firms, have increased rice imports because the prices are lower than domestically produced rice even after the tariff is added.

The volume of rice exported from Taiwan to Japan reached 7,759 tons between January and May, up more than six-fold from the corresponding period last year. Taiwan-produced rice is similar in taste and growing techniques to Japan-produced rice.

Going forward, it is possible that rice imports from Southeast Asia will also increase.

However, if price gaps between imported rice and domestically grown rice widen, it may negatively impact Japanese rice farmers. The possibility will likely stir up controversy.
 
 

Indonesian business actors inked memorandums of understanding (MoUs) worth US$200.8 million with their Japanese counterparts during the Indonesia-Japan Business Forum in Osaka, Japan, earlier this week.

Deputy Minister of Trade Dyah Roro Esti said that her ministry was committed to supporting the stakeholders, including small and medium enterprises (SMEs), at the forum, which was among the series of activities joined by the Indonesian trade mission to Japan.

“Collaboration between the two countries as trading partners is expected to be stronger and mutually beneficial,” she said in a statement issued on Friday.

A total of 13 collaborations, including in paper products, wood pellets, seafood, chocolate, rattan decoration, wooden furniture, coffee beans, charcoal, labor, and biomass business development, were agreed upon at the business forum on Wednesday.

On that occasion, Esti outlined Indonesia’s strategic position as the largest country in Southeast Asia and its position as a major trade and investment partner.

According to the deputy minister, Indonesia has shown strong economic resilience, growing 4.87 percent in the first quarter of 2025. It recorded a gross domestic product (GDP) of US$4.9 thousand per capita per year in 2024, she highlighted.

In addition, Indonesia experienced a significant increase of 20.8 percent in investment realization in 2024, compared to the previous year.

According to Esti, bilateral trade relations between Indonesia and Japan have the potential to open up large market opportunities in several prominent sectors.

Indonesia’s non-oil and gas exports to Japan have recorded a positive growth of 8.8 percent in the last five years (2020–2024).

In 2024, exports to Japan were dominated by coal, which accounted for 15.8 percent of Indonesia’s total global exports; nickel, 5.52 percent; and electrical conductors, 4.07 percent.

Meanwhile, Indonesia’s non-oil and gas imports from Japan showed a positive growth of 8.21 percent during the same period, she informed.

Indonesia’s main imports from Japan were metal products (3.03 percent), motor vehicles (2.9 percent), and copper (2.81 percent).

The deputy minister met with several parties in Japan as part of the trade mission, including the Japanese Ministry of Economy, Trade, and Industry, Japan-Indonesia Association (JAPINDA), ASEAN-Japan Center (AJC), and the Chamber of Commerce and Industry (CCI) Japan.

The Indonesia-Japan Business Forum also helped the Ministry of Trade promote the Indonesian Pavilion at Expo 2025 Osaka.

Themed “Strengthening Synergy: Unlocking Indonesia-Japan Economic Partnership Agreement for Sustainable Trade in New Economy Era,” the forum featured 27 Indonesian exporters.

They belonged to various sectors, such as renewable energy, sustainable fashion, building materials, and food and beverage products.
 

East Japan Railway Co. (JR East) will launch a new overnight express train in the spring of 2027, connecting the Tokyo metropolitan area and the northern part of the Tohoku region, the company said Tuesday.

JR East aims to create an enjoyable travel experience by providing all passengers with their own private compartments.

A 10-car express train currently used on the JR Joban Line will be converted into the overnight train, and one of the cars will be made into a dining car. The train will have compartments to accommodate one, two or four people will be able to carry about 120 passengers. The seats in some of the compartments will be able to be converted into sleeping spaces.

The exterior of the sleeper train will be mostly blue, reminiscent of Japan’s long-distance trains of the past that were nicknamed “Blue Trains.”
JR East will change the train’s destination depending on the season and the schedule will be decided at a later date.

According to the company, there will be two classes of compartments, and an upper-class compartment will be more expensive than Grand Class premier seats on the Tohoku Shinkansen train.

“We hope this train will be able to provide passengers with an enjoyable overnight travel experience, so that riding the train itself will be the purpose of their trips,” said President Yoichi Kise during Tuesday’s press conference.
 
 

Bento, boxed lunches, are practically a symbol of Japanese cuisine itself. A self-contained meal of rice and a number of meat, fish, or vegetable side dishes, they’re a quick and convenient way to get a balanced meal, easily portable back to your office or home, and their packaging means you can even set the box down on your lap and eat it on a park bench if you don’t have access to a table or desk when you’re hungry.

However, these are tough times for bento shops. According to business research organization Teikoku Databank, 22 bento shops filed for bankruptcy between January and May of this year.

Not only is that more than the same period for 2024, if this pace keeps up for the rest of the year it’ll be the highest annual number of bento shop bankruptcies Teikoku Databank, whose figures go back to 2010, has ever observed.

So what’s causing this? The researchers offer a few different explanations. Large orders of premium-priced bento for events such as business meetings, weddings, and funerals are down, but that’s really more of a gradual societal trend away from serving fancy bento at such gatherings.

People working from home also means less demand from office workers buying bento as an alternative to waiting for a seat at crowded business district restaurants during the lunch rush, but that wouldn’t explain why we’re seeing more bento shop bankruptcies in 2025 than we did during the pandemic, when even more people were teleworking.

So really, it would seem that the biggest factor that Teikoku Databank mentions is rising costs for ingredients, especially rice. While bento can have all sorts of different side dishes, rice is the one common element they all have. If you’ve got no rice, you’ve got no bento, and with Japan currently grappling with the most sudden rice price increases in a generation, it’s having a major effect on bento bottom lines.

What makes the situation especially difficult is that even though bento are widely liked in Japan, most of them aren’t necessarily loved. While special regional bento, sometimes with higher price tags, are popular with travelers as a novelty or special-occasion meal, when it comes to ordinary, everyday bento, you won’t find nearly as many passionate fans as you will for things like ramen or beef bowls.

Convenience and affordability are often the bigger parts of bento’s appeal for would-be regular customers, so passing on increased ingredient costs as higher bento prices can erode demand, since there might not be such strong loyalty to how the food tastes, even if it does taste pretty good.

That’s putting bento shops in a situation similar to the one being faced by Japan’s biggest curry rice restaurant chain. Their food hasn’t traditionally been seen as a premium product, so if they raise their prices very much a significant number of customers are likely to say “Eh, in that case I’ll pass,” but keeping their prices low is making it difficult for many bento shops to make a profit.

That doesn’t mean it’s bad news all around for bento shops, however. According to Teikoku Databank’s researchers, 45 percent of bento shops had an increase to their profits in 2024. However, 30.2 percent saw their profits shrink, and 21.7 percent were operating in the red.

Contributing to this feast-or-famine status is that larger bento shop chains are in a better position to manage their inventories to reduce losses from unsold bento or diversify their sales networks to tap into more pools of demand.

Those are more difficult for smaller local bento shops to do, though, and so they’re the ones who’re facing the most danger in Japan’s new dining landscape.
 
 

Toyota Motor Corp has proposed to the government that it sell U.S.-made cars in Japan through its domestic dealership network, the company said in an online video.

The proposal is intended to support Japan's trade negotiations with the United States over President Donald Trump's tariffs. Observers said increased imports of U.S.-made cars could help narrow the large U.S. trade deficit, a source of frustration for Trump.

According to a video released on Monday, Chairman Akio Toyoda informed Prime Minister Shigeru Ishiba during their May meeting that Toyota would be able to sell vehicles manufactured by U.S. automakers through its network of over 4,000 stores in Japan.

The video also revealed Toyoda's willingness to consider reimporting U.S.-produced automobiles to Japan as an option.

Under Trump's so-called reciprocal tariff regime, announced on April 2, nearly every nation in the world has been hit with a baseline duty of 10 percent, with Japan facing an additional country-specific tariff of 14 percent for a total rate of 24 percent.

Japan, meanwhile, has been affected by Trump's extra 25 percent tariff on automobiles, along with other sector-specific levies imposed on national security grounds. Tokyo presented a package of proposals to Washington to reach a deal.

Ryosei Akazawa, Japan's top tariff negotiator known as a close aide to Ishiba, is expected to visit the United States later this week for a sixth round of ministerial-level talks aimed at securing concessions over the series of tariffs.
 
 

The average retail price of regular gasoline in Japan fell to a two-year low of 172.2 yen per liter as of Monday due to lower crude oil prices and government subsidies, the industry ministry said Wednesday.

The ministry said that the average price at the pump was down 2.1 yen from a week before.

All 47 prefectures saw declines in gasoline prices for the third consecutive week. Aichi logged the lowest average, at 165.1 yen, followed by Saitama, at 165.2 yen. The highest average was 182.9 yen in Nagasaki, while the biggest price drop was 3.8 yen in Kagawa.

The government provided refiners with a subsidy of 9.4 yen per liter in the week ending Wednesday to help lower gasoline prices, which will be raised to an upper limit of 10 yen, effective Thursday.
 


 

Curry rice is one of Japan’s favorite things to eat, and its favorite restaurant to eat it at is Cocoichibanya. Also known as Cocoichi, the chain, which was founded in 1978, has over 1,200 branches in Japan, making it the country’s most prominent curry specialty restaurant by far.

But while the taste of Cocoichi’s curry remains as beloved as ever, the chain has experienced a substantial drop in its number of customers, and the reason why appears, pretty clearly, to be its rising prices.

Cocoichi has a semi-customizable menu, in that customers can choose the type and spiciness of roux, amount of rice, and toppings for their curry rice. The prices for all of them, though, have been creeping higher and higher. 

The chain raised its prices twice in 2022, increasing prices for roux/rice and toppings by an average of 5.9 and 3.8 percent, respectively, in June of that year, and then again by 7.4 and 5.4 percent in December.

Customers proved largely willing to eat those increased costs, but another round of price hikes came in August of 2024, raising curry/roux by an average of 10.5 percent and toppings by 13.5 percent, and those seem to be too much for many diners to swallow.

Between September of 2024 and February of 2025, the chain recorded a 5.2-percent drop in its number of total customers, compared to that period in the previous year.

Customer numbers for this fiscal year, which started in March, are even worse so far, with 7.5 percent fewer customers in March and 6 percent fewer customers in April (compared to those months in 2024).
It’s not surprising that Cocoichi has raised its prices. Inflation has been accelerating in Japan over the past year, especially for foodstuffs. 

 

The country is also in the middle of a rice shortage, with prices for the grain having roughly doubled compared to a year ago, and when the price of rice goes up, so too, naturally will the price of curry rice.

However, for generations curry rice has been seen as a hearty but also inexpensive meal in Japanese culinary culture, a favorite of hungry students, hard-working blue-collar employees, and others looking to leave a restaurant with both their stomach and their wallet comfortably full.

To many, curry rice is the sort of thing you should be able to order without being concerned about the cost at all, but with wage increases not keeping pace with rising prices in Japan, and many workers not seeing their wages increase at all, Cocoichi’s repeated price increases seem to have brought its curry rice to a point that an increasing number of prospective customers are balking at.

So how much does a Cocoichi meal cost these days? Again, as mentioned above, there’s a lot of customization that can be done in ordering, all of which affects the price. A basic plate of just rice and roux, though, now costs 646 yen for pork-based curry, and 794 yen for beef-based curry.

Just about everyone, though, adds some sort of meat and/or vegetables as toppings, though, and the average amount spent by a single diner at Cocoichi is now 1,208 yen.

With the smallest denomination of yen bill being the 1,000-yen bill, for many consumers 1,000 yen is a significant tipping point, and while 1,208 yen may not qualify Cocoichi as luxury dining, it also means that, in many people’s minds, it’s no longer an inexpensive meal either.

It’s worth noting that Cocoichi’s customer numbers slipping hasn’t hurt its bottom line, at least not yet, since in 2024 the chain’s operating profits were up 4.5 percent compared to 2023.

However, that figure includes the profits from the first half of 2024, before the latest price increase and subsequent customer losses, and with curry rice’s image as good, honest (and affordable) food, plus Cocoichi’s casual restaurant ambiance, there’s likely a limit to how much success the chain can have chasing a bigger-spending yet numerically smaller clientele.
 
 

Resona Holdings, Inc. will allocate ¥30 billion over three fiscal years starting in April to develop artificial intelligence technologies and foster personnel with digital expertise, President Masahiro Minami said during a recent interview with The Yomiuri Shimbun.

The holding company, whose group includes Resona Bank and Saitama Resona Bank, aims to enhance productivity by introducing generative AI not only to its group’s in-house operations but also its financial products and services for outside parties, Minami said.

Resona Holdings had already announced that it would invest ¥121 billion in the digital field over the three fiscal years through March 2026.

Regarding the ¥30 billion investment, Minami said, “Now is the time that we should make drastic changes in our productivity,” adding, “We’re going to boost these reform.”

Resona Holdings plans to allocate the ¥30 billion to growth investments by excluding costs for system updates and other fixed costs. Generative AI is to be used “as the default” in operations at every group company, Minami said.

Generative AI will also be featured in the group companies’ financial products and services. “We also have to change the customer’s experience [with the group] at the same time,” Minami said.

For the current fiscal year, Resona Holdings has set a goal of increasing its gross profit to over ¥800 billion for the first time in 19 years.

Resona Holdings aims to upgrade its digital services and the loans that its group companies provide to small and midsize firms. For cashless payments, the group currently handles ¥2 trillion mainly through debit cards, but the holding company aims to increase that amount to more than ¥3 trillion as quickly as possible.
 
 

A cattle ranch has commercialized “frozen milk” in Hokkaido, the kingdom of Japan’s dairy products, and is expanding its sales channels.

Though freezing milk typically makes for an unpleasant taste once thawed, making use of flash-freezing technology has been a game-changer.

Freshness and flavor are not lost even after thawing, and the expiration date can be extended to about half a year compared to the one to two weeks when refrigerated.

The cattle ranch plans to export the product to other Asian countries.
“Trustworthiness and branding power of ‘made in Hokkaido’ products are great. I believe there is demand from high-income consumers,” said Toshifumi Suzuki, 43, who keeps about 90 dairy cows in Hiroo, Hokkaido. The town is in the Tokachi area, where dairy farms are prosperous.

Suzuki Farm, where he works, was established by his great-grandfather. When he began working there, the cows were fed enriched feeds made mainly with corn and artificial supplements. However, the cows repeatedly contracted infectious diseases.

In 2010, he changed the ranch’s feeding, believing the cows would be healthier if they were raised in an environment closer to nature. Once switching exclusively to organic grass, the cows became ill less often and the taste of their milk improved drastically.

In summer last year, he was hit with the idea of commercializing frozen milk upon learning about machines that freeze meat and fish extremely quickly to preserve freshness.

The machines are developed by Technican Co., a Yokohama-based freezer manufacturer.

The process involves immersing food containers in a liquid at minus 30 C, freezing it instantly without causing cell breakdown. Surely, Suzuki thought, the same process serving to preserve the freshness of food could be applied to milk?

Usually, thawing milk causes proteins and fats to separate, giving it a rough texture. Therefore, the Tokyo-based Japan Dairy Industry Association does not recommend freezing milk.

However, when Suzuki experimented using the quick-freezing method, it was confirmed that freshness and flavor were not lost even after thawing.

After an evaluation by a third-party inspection body, Suzuki began selling frozen milk with a six-month expiration period in summer last year. A 180-milliliter bottle of the frozen milk is priced at ¥700, including tax.

As it can be enjoyed without worrying about best-by dates, the milk is popular as a thank-you gift under the furusato nozei hometown tax donation system, in which people donate money to local governments of their choice in return for income tax deductions.

Also, since it is unlikely that leftover milk will need to be disposed, some customers buy the frozen milk for dairy product events.

Suzuki Farm plans to begin exporting to Singapore and Thailand in autumn.
“I want people all over the world to know the true taste of milk beyond the barrier of best-by dates,” Suzuki said.

Another cattle ranch in the area sells flash-frozen milk from cows raised exclusively on pasture grass, of which a 180-milliliter bottle is priced at ¥540, including tax.

Miyaji Bokujo ranch in Shimizu, Hokkaido, has shipped its frozen milk to a milk shop in New Chitose Airport and a Fukuoka supermarket.
 
 

The tariffs are "causing daily losses to Japan's economy", said Japanese trade negotiator Ryosei Akazawa after talks with top US officials.

Japan had made some progress in a fifth round of trade talks with United States officials aimed at ending tariffs that are hurting Japan's economy, Tokyo's chief tariff negotiator said.

"Tariffs have already been imposed on autos, auto parts, steel and aluminum, and some of them have doubled to 50 per cent along with 10 per cent general tariff.

These are causing daily losses to Japan's economy," Ryosei Akazawa, said in Washington on Friday (Jun 6) after talks with officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.
Akazawa, a minister in charge of economic revitalisation, declined to say what progress they had made.

The latest round of talks may be the last in-person meeting between senior Japanese and US officials before the Group of Seven (G7) leaders summit that starts on Jun 15, where US President Donald Trump is expected to meet Japanese Prime Minister Shigeru Ishiba.
 
Japan also faces a 24 per cent tariff rate starting in July unless it can negotiate a deal with Washington.

"We want an agreement as soon as possible. The G7 summit is on our radar, and if our leaders meet, we want to show what progress has been made," Akazawa said.

"Still we must balance urgency with a need to guard our national interests," he added.

Last month Japan's trade negotiator said US defence equipment purchases, shipbuilding technology collaboration, a revision of automobile import standards and an increase in agricultural imports could be bargaining chips in tariff talks.

In a bid to reach an agreement with the US, Japan is also proposing a mechanism to reduce the auto tariff rate based on how much countries contribute to the US auto industry, the Asahi newspaper reported on Friday.
Akazawa said Japan's position has not changed and that the tariffs are not acceptable.

In a statement on Friday after Akazawa's near two-hour meeting with Lutnick, Japan's Foreign Ministry said that the Japanese minister had "once again strongly urged a reconsideration of the series of tariff measures by the US".

"Both sides reaffirmed each other’s positions regarding US tariff measures, and had a concrete discussion on expanding trade, non-tariff measures, and cooperation on economic security among others," the ministry added.

"They concurred to vigorously continue coordination with the aim of reaching a mutually beneficial agreement."
 
 

Suzuki Motor Corp has halted production of its flagship Swift compact hatchback due to China's export restrictions on rare-earth elements, sources close to the matter said, marking the first suspension by a Japanese automaker tied to the curbs.

The restrictions have caused delays in procuring parts that use rare earths, the sources said.

The Chinese government in April imposed export controls on seven types of rare-earth minerals as part of its retaliation against U.S. tariffs. The move has already begun to disrupt production in the United States and Europe.

Suzuki suspended production of the Swift, excluding the Sport model, at its Sagara plant in Shizuoka Prefecture, on May 26.

While it announced that it would partially resume production from June 13 and fully resume from June 16, it did not disclose the reason for the halt.
 


 

Japan’s Nikkei share average rose on Friday, as a weaker yen lifted sentiment, while concerns about trade tensions eased following a phone call between U.S. President Donald Trump and Chinese President Xi Jinping.

The Nikkei rose 0.5% to 37,741.61 but fell 1% for the week. The broader Topix climbed 0.47% to 2,769.33 while posting a 1.6% weekly loss.

“The trade talks seemed to have ended peacefully and that sent a positive sign to the market,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.

On Thursday, Trump held a long-awaited phone call with Xi Jinping, in an effort to resolve trade disputes between the world’s two largest economies that have buffeted the global economy, and agreed to hold further discussions.

But caution ahead of the U.S. non-farm payrolls report, due later in the day, capped gains, Fujiwara said.

The Nikkei got technical support ahead of the fixing of special quotation prices, used to set values on index options and futures, next week, said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

“Foreigners, who shorted the Nikkei futures, bought them back ahead of the fixing day, which also lifted the Nikkei index.”

The yen, which last traded down 0.3% at 144 per dollar, also supported local equities, Shigetoshi Kamada, general manager at the research department of Tachibana Securities, said.

Chip-related heavyweights Tokyo Electron and Advantest rose 1.28% and 2.23%, respectively.

Automakers gained, with Honda Motor and Nissan Motor adding 1.3% and 1.27%, respectively, while Toyota Motor moved 0.06% higher.

Panasonic Holdings, which supplies batteries for Tesla, lost 2.37% after Tesla shares plunged 14.3%.

ispace tanked 29% to 744 yen, hitting the day’s exchange-allowed floor, after the space venture said that its uncrewed moon lander likely crashed onto the lunar surface during its touchdown attempt.
 
 

 

Two major convenience store chains in Japan began selling government-released stockpiled rice at select stores in Tokyo and Osaka on Thursday, joining major supermarkets and e-commerce platforms in a move to increase availability of the staple food for consumers struggling with soaring rice prices.

The outlets of FamilyMart and Lawson will sell the rice from the 2021 harvest in small portions to make it affordable for people, including those living alone.

While many other retailers sell it in bags of 5 kilograms for about 2,000 yen FamilyMart sets the price of its 1-kg package at 388 yen, and Lawson's is at 389 yen and 756 yen for 2 kg. Both will limit their sales to one package per customer.

Lawson said it will make the rice available at its 13,800 stores nationwide on June 14, excluding those in Okinawa, while Family Mart said it will also expand areas selling them.

"If (FamilyMart) provides the stockpiled rice nationwide, it will help expand access," farm minister Shinjiro Koizumi said as he inspected a Family Mart outlet in Tokyo.

Seven-Eleven Japan also said it will start selling stockpiled rice in some stores, including those in Tokyo and Osaka, on June 17 for 775 yen for 2 kg and gradually expand availability.

The three major convenience store chains secured stockpiled rice through direct contracts as small- to medium-sized distributors after being rejected as major distributors due to a lack of transaction history.

Some retailers that signed contracts as major distributors started selling the rice at the end of May and have already been running out of stock.
 
 

Nintendo Co. released the Nintendo Switch 2, its first video game console in eight years, on Thursday.

Applications had flooded in for lottery pre-orders on the official online Nintendo store and other sites. There are currently no plans to sell the Switch 2 in physical stores and only lottery winners received the console at major mass retailers.

At Bic Camera Inc.’s main store in Toshima Ward, Tokyo, about 30 lottery winners lined up at the doors even before the store’s 10 a.m. opening.

“I’m so happy that it doesn’t feel real,” said a beaming 24-year-old company employee from Toda, Saitama Prefecture. “I can’t wait to play with it when I get home.”

The recommended retail price of the Switch 2’s domestic-only model is ¥49,980, including tax. The new console’s liquid crystal display is larger than the first-generation model, and it comes with a featured game chat function, which enables the user to remotely chat with other players.

Nintendo is intending to sell 15 million Switch 2 consoles worldwide in the first fiscal year. The company has not disclosed how many of the consoles are allocated to Japan.
 
 

KDDI Corp. plans to conduct a trial demonstration operating drones through direct communication with Space Exploration Technologies Corp. (SpaceX)’s Starlink satellite network by the end of this year.

This initiative, anticipated to be able to aid in disasters such as earthquakes, aims for practical implementation by March of next year, the company stated Thursday.

Drones presently utilize cellular networks for extended-range operations. However, in areas with no network coverage, it is required to deploy mobile base stations.

Direct communication with Starlink is expected to facilitate drone operations in challenging environments such as mountainous terrain and remote islands.
From October onwards, KDDI will gradually establish drone take-off and landing bases at 1,000 locations nationwide.

These drones will first be introduced in Ishikawa Prefecture, where KDDI has a comprehensive partnership agreement for recovery efforts from the 2024 Noto Peninsula Earthquake.

Then, drones will be deployed sequentially to Lawson convenience stores in which KDDI is involved in management, as well as to city halls and other locations.

The company plans to use them for tasks such as monitoring social infrastructure like power lines, monitoring work at construction sites and supporting search activities during disasters.
 
 

The world's top-selling carmaker Toyota said Tuesday it would take its auto parts-making subsidiary Toyota Industries private in a deal that reportedly valued the unit at more than $40 billion.

Toyota Industries, which also manufactures forklifts and other industrial vehicles, will go private under a holding company comprised of Toyota Motor and others, the firms said.

Toyota Motor had previously owned around 23 percent of Toyota Industries -- the original company, once a family loom business, that Toyota Motor evolved from.

Before the deal was announced, media reports had said that it valued Toyota Industries at $42 billion.

Taking Toyota Industries private "would allow more freedom in management" and could be good news for long-term investors, Bloomberg Intelligence analyst Tatsuo Yoshida said in April.

But he cautioned that the buyout would require raising a large amount of funds, so it is unclear whether it makes economic sense, Bloomberg reported at the time.
 
 

4th edition of IJBC-led summit to spotlight technology, trade, sustainability, and SME collaboration between the two nations.

In a significant step toward reinforcing bilateral economic cooperation, the Indo-Japan Business Council (IJBC) will host the 4th edition of the India-Japan Business Conference on July 10, 2025, in Chennai.

Themed “Accelerating Indo-Japan Partnerships in Technology, Trade, and Sustainability,” the conference aims to provide a dynamic platform for dialogue and collaboration between policymakers, business leaders, SMEs, and domain experts from both countries.

The event is designed to further strengthen the economic synergy between India’s expanding market and Japan’s global leadership in technology and sustainable business practices. Against the backdrop of a rapidly shifting global economy, the conference will emphasize practical avenues for enhancing cross-border partnerships, particularly through digital innovation, sustainable development strategies, and SME empowerment. Abhishek Choudhury, Vice President, Indo-Japan Business Council (IJBC), said, “At IJBC, we believe this is the moment to accelerate India–Japan partnerships. Through this conference, we are not just discussing possibilities—we are building real, long-term cooperation in technology, trade, and sustainability.”

The conference will commence with welcome remarks by Siddharth Deshmukh, President of IJBC, followed by special addresses from the Consul-General of Japan in Chennai and a senior representative from the Government of India.

A key highlight of the morning session will be a presentation by the Japan External Trade Organization (JETRO) focusing on how emerging technologies can drive Indo-Japan economic growth. A group photograph and a tea break will follow this. Throughout the day, participants will engage in an array of sessions, including case studies, panel discussions, and fireside chats. One of the spotlight sessions will feature a case study on Indo-Japan collaboration in renewable energy, exploring how the two nations are working together to chart a greener future.

Another key segment includes a fireside chat on building resilient and future-ready business ecosystems, followed by a panel discussion focused on strengthening Indo-Japan business partnerships in the areas of trade and technology.

Post-lunch sessions will include sponsor presentations and a keynote address on navigating sustainability in global trade. A subsequent case study will showcase the Indo-Japan smart city development model, highlighting urban development partnerships between the two nations. Another fireside chat will delve into unlocking opportunities for SMEs and scaling cross-border ventures. 

The final session of the day will feature a panel discussion on sustainable business practices and collaboration in the circular economy. The event will close with remarks by Mr. Abhishek Choudhury, Vice President (Strategy) of IJBC. A cocktail dinner will follow in the evening, offering attendees a relaxed networking environment to foster future partnerships. The India-Japan Business Conference 2025 seeks to drive forward-looking conversations on policy advocacy, market access strategies, and innovation-driven growth.

Organizers aim to generate actionable policy recommendations, enhance business readiness among small and medium-sized enterprises (SMEs), and forge new pathways for sustainable bilateral trade.

With a carefully curated agenda and high-level participation from both countries, this edition is expected to foster a stronger, more interconnected Indo-Japanese business network and lay the groundwork for transformative economic cooperation.

Further details, registration, and sponsorship information are available on the official website at www.bizcon.ijbc.org or by contacting the organizing committee at abhishek.choudhury@ijbc.org.


Info-Box:

The conference is structured to deliver a 360-degree view of Indo-Japan collaboration. Special focus areas include:

• Technology and Innovation: Co-developing digital ecosystems and smart manufacturing frameworks.
• Green Business and Sustainability: Promoting carbon-reduction strategies and eco-friendly infrastructure.
• Trade Facilitation: Reducing entry barriers and encouraging cross-border investments.
• SME Empowerment: Sharing best practices and unlocking global opportunities for smaller enterprises.

 
 
 

 

 

Leadership Shift Comes Amid Insurer Investment Shakeup

Tsutsui Yoshinobu, former chair of Nippon Life Insurance, has been appointed as the new chair of Keidanren, Japan’s most prominent business lobbying organisation.

His appointment marks a shift in the group’s leadership tradition, as Tsutsui is the first to come from a financial institution rather than a manufacturing background.



Ex-insurance leader takes leadership of Keidanren

Effective May 29, Tsutsui begins his tenure at a time when the role continues to serve as a key link between the private sector and government policymaking, according to a Nippon report.

Tsutsui, who stepped down from his leadership post at Nippon Life to take up the new position, will serve a term of four years, divided into two two-year periods.



Non-traditional background for business lobby leader

Traditionally, Keidanren chairs have emerged from listed manufacturing giants.

According to the Nippon report, Tsutsui breaks from this convention not only by coming from the finance sector but also by having led a mutual company – Nippon Life – where policyholders are members rather than shareholders.

His corporate career includes his 2011 appointment as president of Nippon Life, during which he directed the firm’s acquisition of Mitsui Life Insurance in 2015, now operating under the name Taiju Life. He was elevated to chairman in 2018 and joined Keidanren’s executive board as vice chair in 2023.

In 2024, Tsutsui was appointed to lead the GX Acceleration Agency, a government initiative focused on energy transition and decarbonization.



Bond market challenges confront Japan’s life insurers

Tsutsui’s elevation coincides with challenging conditions for life insurers in Japan, where rising domestic interest rates have contributed to steep declines in the value of long-term government bond holdings.

For the fiscal year ending March 2025, Nippon Life reported unrealised losses of approximately ¥3.6 trillion (around US$25 billion), along with ¥500 billion in realized losses due to bond sales.

Meiji Yasuda Life Insurance also recorded a substantial increase in paper losses, which grew to around ¥1.386 trillion (US$9.7 billion) from ¥161.4 billion the previous year.

These losses have prompted both insurers to reconsider their investment strategies, particularly with regard to government debt. Long-duration bonds, typically used to match long-term insurance liabilities, have become more volatile as interest rates rise.



Strategic rebalancing of portfolios

Executives from both firms have indicated a shift in asset allocation strategies.

Nippon Life said it plans to reduce its purchases of government bonds in the current fiscal year to better manage interest rate risk.

A representative from the insurer noted that the adjustment aims to create “a more stable asset profile in response to ongoing market conditions.”

Meiji Yasuda is undertaking a similar review, signalling potential changes in how it allocates capital across fixed-income and alternative assets.
 
 

The requests heighten the chance the central bank will proceed slowly in reducing its huge balance sheet

The Bank of Japan (BOJ) received a sizeable number of requests to maintain or slightly slow the pace of tapering in its bond purchases from fiscal year 2026 onward, minutes of a meeting between the bank and financial institutions showed on Monday (Jun 2).

Despite a recent spike in super-long yields, a significant number of bond market participants also urged the central bank to leave its existing bond taper plan to March 2026 unchanged.

The requests, made at a BOJ meeting with bond market participants on May 20 to 21, heighten the chance the central bank will proceed slowly in reducing its huge balance sheet.

The BOJ will conduct a review of its current taper plan and come up with a subsequent programme at its next policy meeting on Jun 16 to 17.

“From the viewpoint of predictability, the bank should maintain the current pace of the reduction,” one participant was quoted as saying in the minutes about the BOJ’s plan for April 2026 onward.

The central bank has been slowing bond purchases since August last year to halve monthly buying to three trillion yen (S$27 billion) by March 2026.
While the participants diverged on how much the BOJ should taper beyond April 2026, several called for reducing its monthly purchases to around one trillion yen to two trillion yen by the end of the new taper programme, the minutes showed.

One person called for eventually reducing purchases to zero, while another called for maintaining the current three trillion yen monthly pace “for a while”.

The new programme from April 2026 should display the BOJ’s taper plan for a full year, one participant was also quoted as saying.

The BOJ’s taper review comes at a delicate time. Yields on super-long Japanese government bonds (JGB) soared to all-time highs last month on weak investor demand, as political calls for big fiscal spending flare up ahead of an upper house election slated for July.

Many bond market participants warned of declining market liquidity for super-long bonds, with some calling for a response by the BOJ, according to the minutes.

“The Bank should consider making flexible responses for this zone,” such as by suspending reductions in its bond buying or ramping up purchases of super-long bonds, the minutes showed.

Some called for making tweaks to the way the BOJ conducts its bond-buying operations so that it can more flexibly adjust the amount of super-long JGBs purchases.

Others, however, warned the BOJ against responding too much to swings in super-long yields.

“The deterioration in supply and demand conditions in the super-long-term zone is due to structural factors,” such as weak investor demand relative to the size of issuance, one participant was quoted as saying. “There is thus limited room for the Bank to address the root cause.”

The BOJ has lagged well behind global counterparts in whittling down crisis-era stimulus, having only exited last year a decade-long, massive stimulus aimed at pulling the economy out of stagnation. It also ended negative interest rates last year, though short-term borrowing costs are only 0.5 per cent.
 
 

The Japanese government's stockpiled rice released through direct contracts with retailers began hitting store shelves Saturday, with consumers flocking to the cheaper products.

Major supermarket operator Ito-Yokado Co and home appliance company Iris Ohyama Inc were the first to start selling the rice at some of their shops, both setting a price tag of 2,160 yen including tax for a 5 kilogram-bag.

At an Ito-Yokado store in Tokyo's Ota Ward, 500 bags of rice sold out in just 30 minutes since its opening at 10 a.m. Other Ito-Yokado stores will also start selling the rice on Sunday or later.

At a home center operated by an Iris Ohyama group company in Sendai, Miyagi Prefecture, some 250 people lined up before 8 a.m. in the rain to get numbered tickets to purchase the rice.

"It's cheap, and that helps," Mitsuko Matsuura, 71, said, expressing her relief that she was able to purchase the rice. She also said its taste was "not so different" from newly harvested rice.

An 82-year-old man was disappointed that he was not able to make a purchase. "We are a family of five, so it's quite tough. I would like to come again to buy (the rice)."

In the latest effort to bring down the soaring price of rice that has been hitting households, the Japanese government began selling its stockpiles through direct contracts with retailers earlier this week.

Subject to the direct contracts is 300,000 tons of rice from 2021 and 2022.
Ito-Yokado secured 5,000 tons and Iris Ohyama 10,000 tons of the 2022 harvest. Supermarket giant Aeon Co and discount store chain Don Quijote will also start selling the stockpiles they procured from Sunday.

The Ministry of Agriculture, Forestry and Fisheries initially offered reserve rice through auctions. But it switched to selling it directly to retailers in the hope that doing so will be more effective in curbing rice prices.
 
 

Core consumer prices in Tokyo climbed 3.6 percent in May from a year earlier, rising at the fastest pace in over two years, official data showed Friday, as the cost of rice remained on a sharp upward trajectory.

The rise in Tokyo's core consumer price index, excluding volatile fresh food items, followed a 4.3 percent jump in January 2023, the highest in nearly 42 years, due partly to Russia's protracted war in Ukraine and the yen's depreciation.

The core CPI in Japan's capital, viewed as an indicator of nationwide trends, was driven up by soaring rice prices in May, which climbed 93.7 percent after surging 93.8 percent in April, the biggest year-on-year increase since comparable data became available in 1971.

In early May, the average price of rice, the nation's staple food, reached a record 4,268 yen per 5 kilograms in Japanese supermarkets, roughly double the previous year's level, following a poor harvest, the agriculture ministry said.
 
 

The Japanese government on Friday vowed to explore new overseas markets and provide support for more efficient production as part of efforts to increase rice exports in response to an envisioned long-term contraction in domestic consumption.

In the annual white paper on food and agriculture for fiscal 2024 approved by the Cabinet, the Ministry of Agriculture, Forestry and Fisheries recommends increased rice exports despite the Japanese government recently introducing measures to curb soaring domestic prices, driven in part by shortages.

The report identified China, Singapore, the United States, Hong Kong and Taiwan as target markets for exports.

With the popularity of Japanese food booming abroad, the country's exports of agricultural goods reached a record 1.51 trillion yen ($10.5 billion) in 2024, as it sets a target of 5 trillion yen in 2030, the paper said.

To achieve that target, the government wants to increase rice exports, which trended higher to 12.03 billion yen in 2024 -- 27.8 percent above the year before -- through sales at Japanese restaurants and stores.

The government set a goal to boost rice exports by nearly eightfold to 353,000 tons in 2030 from 2024 in its medium- to long-term basic plan for agriculture, released in April.

To bolster productivity for rice exports, the government aims to increase the acreage managed by export-focused farmers with fields of 15 hectares or larger.

It also seeks to reduce the current production costs of 16,000 yen per 60 kilograms nearer to 9,500 yen for exports to help domestic producers better compete with foreign-grown rice, according to the plan.

New farm minister Shinjiro Koizumi also urged rice growers to increase output, despite the government issuing a guideline annually for each major producing region to match expected demand, a step that has led to adjustments in supply. He said last week that even if there is a surplus, rice could be exported overseas or the government could find new ways to market it.

Prime Minister Shigeru Ishiba is also supportive of increasing agricultural exports, saying in a recent TV program, "Rather than saying, 'We will export if there is a surplus,' we should aim to export from the beginning."

The paper, which includes a chapter dedicated to agricultural exports for the first time, said, "It is essential to shift to earning money in growing overseas markets" as domestic consumption is expected to decline due to the falling population.
 
 

 

Japan’s cooperation in the development of liquefied natural gas (LNG) in the U.S. state of Alaska has emerged as a bargaining chip in the ongoing Japan-U.S. tariff negotiations.

While U.S. President Donald Trump is expecting Japan, South Korea and other countries to participate in the development project, doing so is expected to require over ¥6 trillion, prompting some major trading companies and energy companies to question the profitability of the project.

Strong focus on U.S. side

According to the Alaska Gasline Development Corp. (AGDC), which is responsible for the project, the plan is to lay a roughly 1,300-kilometer-long pipeline from gas fields in northern Alaska.

Gas from the fields will be transported to the Pacific coast in southern Alaska, from which the gas will be exported to the rest of the world, and 20 million tons of gas are expected to be exported to Asia per year.

At a Japan-U.S. summit in February, Japan agreed to work with the United States to expand imports of U.S. LNG. Trump in March said in an address to the U.S. Congress that Japan and South Korea wanted to partner with the United States on the project. In mid-May, Alaska Gov.

Mike Dunleavy stated that they were discussing a broad range of issues with Japan, South Korea and other countries. The U.S. side has shown strong enthusiasm for the project.

An international LNG conference is scheduled to take place in Alaska in early June, and officials from Japan, South Korea and Taiwan have been invited to it. Trump reportedly hopes that Japan and South Korea will express their willingness to participate in the development project at this conference.

The project is estimated to cost as much as $44 billion (about ¥6 trillion). If the project has participants from Asia, which are potential importers of the LNG, this will help reduce the burden on the U.S. side. In addition, Trump places strong emphasis on the project apparently because LNG exports will help reduce the U.S. trade deficit.


Harsh environment

The issue of the Alaska LNG project may seem to have emerged out of nowhere. However, for officials in the energy industry, the project has been discussed for over two decades.

Since the northern part of Alaska where the gas fields are located faces the ice-covered Arctic Ocean, it would be difficult to export gas directly from a port. If a pipeline is laid, it will enable the supply of LNG to southern urban areas through which the pipeline will run.

AGDC aims to start production in 2031. However, the construction of the pipeline will need to be done in a harsh environment as it is supposed to pass over 800 rivers and through three mountain ranges, including Mt. Denali, or Mt. McKinley, which is North America’s tallest mountain.

“I don’t think construction can be completed by 2031,” said a major trading company executive.

Some believe the construction costs could balloon to more than ¥10 trillion due to recent inflation.

Kenichi Hori, president of Mitsui & Co., Ltd., said, “It is necessary to thoroughly examine the economic potential and long-term sustainability of the entire project.”

 

Geopolitical risks

As LNG emits less carbon dioxide when burned than oil, Japan’s Strategic Energy Plan positions it as a realistic fuel for the time being. However, its supply is often influenced by geopolitical risks.

In Arctic LNG 2, an LNG project in Russia’s Arctic Circle in which Mitsui & Co. and other companies are participating, LNG production has been suspended due to economic sanctions against Russia and there is no prospect of LNG being supplied to Japan.

To diversify risk, major trading companies, power and gas companies, and others are working to diversify and expand their interests in Southeast Asia, Australia, the Middle East and North America.

If the Alaska project becomes operational, LNG could be delivered to Japan in about a week, which is expected to help reduce the number of days required for delivery.
Even so, there is deep-rooted concern regarding the project.

“If we end up buying more expensive energy, it will only result in the public having to bear a greater burden,” said a senior official of the energy industry.
The government and related companies will have to consider this issue carefully.
 

 

Money-losing Japanese automaker Nissan Motor Corp is banking on its latest “e-Power” technology for a turnaround.

A kind of hybrid, e-Power comes equipped with both an electric motor and gasoline engine, much like the Toyota Motor Corp Prius. It’s different from a Prius in that it doesn’t switch back and forth between the motor and engine during the drive.

That means the car always is running on its EV battery, ensuring a quiet, smooth ride.

“Nissan has a proud history of pioneering innovative technology that set us apart,” Chief Technology Officer Eiichi Akashi told reporters on the sidelines of a test drive at its Grandrive course outside Tokyo.

The advantage of e-Power vehicles is that they never need to be charged like EVs do. The owner just fuels up at a gas station and the car never runs out of a charge.

Nissan, which racked up a 670.9 billion net loss for the fiscal year through March, sorely needs a hot-seller, especially in the lucrative North American market. But the U.S. market is proving a big headache for all the Japanese automakers because of President Donald Trump’s tariff policies.

To achieve a turnaround, Nissan is working on reducing costs, strengthening business partnerships and redefining its lineup. That's where e-Power fits in, according to Akashi.

Yokohama-based Nissan announced earlier this month that it’s slashing about 15% of its global work force, or about 20,000 employees, and reducing the number of its auto plants to 10 from 17, under an ambitious recovery plan led by its new Chief Executive Ivan Espinosa.

Nissan officials did not give a price for the upcoming e-Power models. The only other automaker offers a similar technology is “kei,” or tiny car manufacturer Suzuki Motor Corp.

E-Power is already offered on the Nissan Qashqai and X-Trail model in Europe, and the Note in Japan. The upgraded version will be offered in the new Rogue in the U.S.

Nissan, a pioneer in EVs with its Leaf, which went on sale in 2010, is also preparing beefed up EV models. It's also working on a solid-state battery which is expected to replace the lithium-ion batteries now widely used in hybrids, EVs and e-Power models.

Analysts say Nissan is in danger of running out of cash and needs a partner. Speculation is rife its Yokohama headquarters building will get sold, or one of its Japan plants will be turned into a casino.

Nissan started talks last year with Japanese rival Honda Motor Co. for a business integration but announced in February that it was dropping the talks.
 
 

Japanese Prime Minister Shigeru Ishiba on Sunday said Tokyo aims to advance tariff talks with the United States, with the goal of achieving an outcome during the Group of Seven summit next month.

Japan’s top tariff negotiator Ryosei Akazawa held a third round of Japan-U.S. talks in Washington on Friday.

Speaking to reporters in Kyoto, Ishiba said there has been progress in negotiations, pointing to discussions on trade expansion, non-tariff measures and economic security.

“We will continue to further refine our discussions with the G-7 summit in mind,” he said.

Ishiba on Friday held a 45-minute phone call with U.S. President Donald Trump to discuss security, diplomacy, and tariffs, and said they exchanged hope for an in-person meeting at the G-7 summit.

On Sunday, Ishiba expressed Japan’s willingness to cooperate in shipbuilding. He said the U.S. has shown interest in the possibility of repairing U.S. warships in Japan and that Japan would like to assist.

He said Japan has an advantage in icebreakers, such as those used on Arctic trade routes, which could become an area of cooperation with the U.S.
In Tokyo, Akazawa on Sunday said the schedule for the next Japan-U.S. talks is being arranged and that he hopes to meet U.S. Treasury Secretary Scott Bessent during his next visit to the U.S.

Speaking to reporters at Haneda Airport following his return from Washington, Akazawa said an agreement will be reached only when all elements are settled as a package, meaning that until everything is agreed upon, nothing is agreed upon.

“Therefore, I won’t comment on how far we’ve progressed,” he said.
 
 

The government will launch measures to revive the shipbuilding industry, which has been declining for a long time, according to sources. It will support the private sector in the construction and repair of shipbuilding docks and in starting businesses overseas.

China has an overwhelming share of the world’s shipbuilding market, and economic security concerns are growing in the international community. As the administration of U.S. President Donald Trump regards strengthening the country’s shipbuilding capability as one of its important policies, Japan hopes to promote cooperation with the United States in this area and use it as a bargaining chip in the upcoming tariff negotiations.

The government aims to support the domestic industry and promote cooperation with the United States at the same time. It will include specific measures in its Basic Policy on Economic and Fiscal Management and Reform, also known as the “big-boned policy,” and secure the necessary budget.

As for domestic measures, it will support domestic investment, technology development and establishing data infrastructure in the shipbuilding industry through the Economic Security Promotion Law. This is in consideration of the fact that shipbuilding is a dual-use industry, which develops and produces vessels for both private and military purposes.

To strengthen domestic shipbuilding capability, which is currently insufficient to meet the recent increase in demand, the government will support to construct new shipbuilding docks by reviving unused docks and dockyards.

The government will also increase the budget related to green transformation to support the building of ships that include next-generation vessels fueled by blue ammonia. Blue ammonia is produced from fossil fuel in which the carbon dioxide emissions generated during the process are captured and stored.

The government will also help Japanese companies construct large-scale docks overseas and start businesses in those locations.

As for possible Japan-U.S. cooperation, the government is considering a “Japan-U.S. fund for reviving the shipbuilding industry.” It will propose joint construction of blue ammonia ships and vehicle carriers, hoping to utilize Japan’s design capabilities and Japan-made manufacturing parts. It will support Japanese and U.S. companies to construct dockyards in the United States.

Based on the technology of Japanese icebreaker Shirase, it plans to jointly develop and produce new icebreakers and cooperate in repairing warships with the United States. It also aims to establish a supply chain between Japan and the United States to avoid too much dependence on China.

China currently has a 70% share of newly built ships and 90% share of ship repair. Japan had a 50% share of newly built ships in the early 1990s, but currently has only 10%. As Japan depends on China for its supply of ships, its maritime transportation may be affected in a contingency. Japan aims to strengthen its economic security by reviving its shipbuilding industry.

The Trump administration also aims to revive the U.S. shipbuilding industry. It has already started to eliminate Chinese ships; the U.S. government said it would collect fees from China-made ships when they enter U.S. ports.

Japan and the United States were to hold their third ministerial meeting about the tariffs on Friday. Japan intends to convey to the U.S. government its intent to cooperate in reviving both countries’ shipbuilding industries, hoping to extract concessions in the negotiations.
 
 

Nissan Motor Co is considering selling its headquarters building in Yokohama to help cover costs related to plant closures and other restructuring efforts, sources familiar with the matter said.

The struggling automaker may also book an additional 60 billion yen in restructuring costs this fiscal year as it pushes ahead with its revamp plans, according to records from a meeting with analysts last week on its latest earning results.

Nissan announced on May 13 that it posted a net loss of 670.9 billion yen in the fiscal year ended March after recording an impairment loss of 460 billion yen and 60 billion yen in restructuring costs under its reform plans.

The carmaker did not issue an earnings forecast for the current fiscal year, as additional restructuring costs and the impact of U.S. tariffs have yet to be factored in, Nissan Chief Financial Officer Jeremie Papin said at a press conference that day.

Even if it sells its headquarters, Nissan may consider leasing back the office space. But it remains unclear whether the company will ultimately go ahead with the sale as some executives oppose the idea, the sources said.

Japan's third-biggest automaker by volume is in need of funds, having announced that it will shut seven of its current 17 auto assembly plants and cut 20,000 jobs globally.

Pressured by faltering vehicle sales in China and the United States, coupled with a series of U.S. tariffs, Nissan is rushing to streamline its global operations to return to profitability in the next fiscal year.
 
 

Amid nationwide high rice prices, Aichi Prefecture is striving to increase rice production. The prefecture, though, faces a formidable threat from pests, whose damage is intensified by global warming, making it more difficult to combat them.

The prefecture has set its production target for this year at about 131,800 tons — an increase of about 5,400 tons from the previous year and the highest since 2018 — with the aim of using this increased output to bring down soaring prices.

Even now, when farmers across the prefecture are only at the stage of early-season planting, they are already contending with challenges like pest damage, a problem believed to be aggravated by global warming.

On April 11 in Yatomi in the prefecture, employees of YTAgri, a rice farming business owning about 70 hectares of paddies, planted 400 trays of Akita Komachi rice seedlings, anticipating a harvest of about 12 tons in early August.

Last year, YTAgri produced about 336 tons of rice. Ryota Yamaguchi, the representative of the company, said emphatically: “The best way we can help consumers facing this rice shortage is to maximize production. While we can’t instantly expand our planted area, we will dedicate ourselves to boosting yields.”

Aiming to produce 380 tons this year, the company is investing in its paddies, fortifying them through measures like increased fertilization for larger ears of rice and strict pest and disease management. Nevertheless, Yamaguchi worries: “Fertilizer costs are 1.5 times what they were five years ago. Fuel prices are rising too, which is another headache.”

Aiming to hold down spiking rice prices, the central government, which had previously set national production targets, shifted this responsibility to the prefectural level in 2018.

The targets set by the Aichi Prefecture’s agricultural regeneration council, a group established by the prefectural government and producer organizations, were previously on a slight downward trend, from about 131,300 tons each year between 2018 and 2022 to about 129,000 tons in 2023, and then to roughly 126,400 tons in 2024. However, this year’s target is about 131,800 tons, up by about 5,400 tons from last year.

The prefecture reported that last year’s rice harvest was only 124,300 tons as a result of poor growth due to high temperatures and other factors.

Furthermore, the first-ever temporary Nankai Trough earthquake warning, issued last summer, is thought to have intensified the rice shortage by prompting increased household stockpiling.

In addition to impacting rice growth, global warming is posing another problem for producers by contributing to a surge in pests.

The invasive giant apple snail, not native to Japan, poses a significant threat, as it voraciously consumes young, tender rice seedlings within two to three weeks of planting and deposits large, toxic egg masses.

A survey last year by the Aichi Prefectural Agricultural Research Center found the giant apple snail in a record 35.4% of 130 studied rice paddies. In the Mikawa region, some farmers reported planting rice seedlings one day and finding them entirely consumed the following morning.
 

 

Another serious issue is the damage caused by rice stink bugs, which feed by piercing rice ears and sucking their sap around the summer before harvest, leading to blackening and reduced rice quality.

In some areas, the population of these bugs has reached 10 times the normal level. The Agriculture, Forestry and Fisheries Ministry explains that this increase stems from a larger number of bugs surviving the winter because of global warming.

JA Aichi Economic Federation reports that the proportion of top-grade rice harvested in the prefecture fell from the usual 80% to 40% for the 2023 and 2024 crops due to rice stink bug damage and other causes.

“Reduced yield and quality directly cut into profits. Although we can’t predict the extent of the damage, we will quickly share information with producers and work with local governments to offer effective pest control guidance when outbreaks occur,” a federation official said.
 
 

The decision was made due to a slowdown in the global emissions reduction trend

Japanese steelmaker Kobe Steel has announced some changes to its investment plans for the three-year financial period between 2024 and 2026 due to rising global uncertainty. In this way, the company aims to maintain its financial stability and prioritize economic rationality in the short term, SteelOrbis reports.

Kobe Steel has reduced its investment plan for the period from approximately 950 billion yen ($6.23 billion) to 750 billion ($5.53 billion).

The company will allocate approximately 150 billion yen ($1.05 billion) to decarbonize its operations, compared to the original plan of approximately 300 billion yen ($2.09 billion) due to the slowdown in the global trend towards carbon neutrality.

The Japanese steelmaker intends to reduce its carbon emissions by 30-40% by 2030 compared to 2013 levels and achieve carbon neutrality by 2050.

To achieve these goals, the company plans to use large-scale innovative electric arc furnaces and ammonia co-combustion technology in blast furnaces starting in 2030.

Kobe Steel also aims to increase the use of scrap, integrate biomass into blast furnaces and implement energy-efficient processes.

As GMK Center reported earlier, Třinecké Železárny Group, the largest steel producer in the Czech Republic, is postponing the completion date of the largest decarbonization investment in the plant’s history.

The main reasons for the delay in the implementation of the EAF are the lack of public support, uncertainty about the future direction of Europe in the rules related to the Green Deal, the current negative situation on the steel market, and unclear import protection rules.
 
 

The Japanese government on Thursday started a revamped gasoline subsidy designed to cut prices by 10 yen ($0.07) per liter to help ease cost-of-living pressures for consumers ahead of an upcoming parliamentary election.

Under the previous scheme introduced in January 2022, the government had subsidized wholesalers to keep regular gasoline prices at around 185 yen per liter, but will now provide a fixed sum regardless of prices, which have recently dropped below that benchmark.

The government subsidy aims to reduce the wholesale gasoline price by 7.40 yen per liter in the first week, a targeted 5 yen effective decrease from a week earlier when crude price fluctuations are taken into account. It then aims to reduce the price by at least 1 yen weekly until it is 10 yen lower by mid-June.

Price reductions are expected to flow through to gas stations in two to three weeks, taking into account inventories, it said.

No end date has been decided for the program, but with around 1 trillion yen allocated to the subsidies, they could last until the end of March 2026.
The reintroduction of the subsidies comes ahead of the House of Councillors election slated for the summer.
 

 

Four decades ago, Hiroko Suzuki's father threaded the needle of a U.S. trade war by pushing the family auto-parts business into newer niche products.

Now, tariffs imposed by the Trump administration are so sweeping they threaten her own attempt to diversify the 78-year-old company into medical devices.

Prime Minister Shigeru Ishiba has called the U.S. tariffs, including 25% on automobiles, a "national crisis" for the world's fourth-largest economy. Japan's top trade negotiator, Ryosei Akazawa, headed to Washington on Friday for a third round of talks.

The worry is evident at companies like Kyowa Industrial, a maker of prototype parts and race-car components based in Takasaki, north of Tokyo. Kyowa, which employs 120 people, was among six auto suppliers that told Reuters they were concerned about their ability to withstand the tariff pressure on Japan's car industry.

"What in the world are we going to do?" Suzuki, Kyowa's third-generation president, recalled thinking when the tariffs were announced. "This is going to be bad."

The problems Kyowa and other auto suppliers face illustrate a decades-long shift in Japan, which no longer floods the world with chips and consumer electronics and is reliant on an auto industry threatened by intense Chinese competition. That marks a contrast with the 1980s, when the U.S. slapped trade barriers on a rising Japan and its then-barnstorming exports.

This report, which is based on interviews with a dozen people, including industry executives, bankers and senior government officials, provides a first-hand account of how one firm is grappling with the uncertainty, and details the deepening squeeze on the automotive supply chain at a time of profound disruption.

Kyowa and thousands of other small manufacturers comprise an auto-supply network that has for decades pursued a "monozukuri" (literally, "making things") approach to production. That culture of incremental improvement and assembly-line efficiency, based on methods developed by Toyota, helped make Japan a juggernaut.

But the shift to battery-powered smart cars has meant software, in which EV makers such as Tesla and China's BYD excel, has become a bigger selling point.

Kyowa started developing neurosurgery instruments in 2016 after Suzuki, now 65, realised the rise of EVs would eventually hammer demand for engine components. It began selling the instruments in the U.S. last year, only to find that Trump's tariffs also applied to medical devices.

Kyowa doesn't export auto components to the U.S., but Suzuki worries automakers will force suppliers to cut prices to offset tariffs. So far, that hasn't happened to her.

One Subaru Corp supplier said his company may have to start looking for partners expanding outside the U.S.

Major automakers have largely offered muted support for suppliers since Trump's tariff announcements. Last month, Toyota, Nissan and Ford  sent letters to the U.S. arms of some Japanese suppliers asking for cooperation in the face of tariffs, according to copies reviewed by Reuters, without offering specifics.

The letters haven't been previously reported.

Nissan told suppliers they should stick to previously agreed prices. It said it was "not obliged" to bear the costs of tariffs but that it would shoulder some of the hit for up to four weeks to help secure its supply chain. It added that it could later seek to recover any support payments to suppliers.

Reuters couldn't determine how much support, if any, Nissan extended. The automakers haven't sent follow-up letters, according to two suppliers, who allowed Reuters to review the correspondence on condition of anonymity.
Nissan told Reuters it was working with suppliers to mitigate the tariff impact and contain costs, including through localisation.

Toyota said it would seek to protect its suppliers, dealers, and employees while maintaining customers' trust as it navigated the uncertainty created by the tariffs. Ford told Reuters it was working with suppliers to assess their exposure and potentially reconfigure processes and sourcing.

In its letter, Toyota said it understood the "complexity and financial burden some suppliers are facing" and asked suppliers to identify and share mitigation measures. Toyota would work with suppliers "in good faith", it said.

Some Toyota suppliers, including Denso, have not given earnings forecasts for the coming year, citing uncertainty.

Julie Boote, an analyst at research firm Pelham Smithers Associates, said the trade war posed an "emergency" for Japan's auto industry that would hasten consolidation.

"In order to survive, these automakers will have to work together," she said.

 

SQUEEZED ON COST

Japanese manufacturers traditionally put pressure on smaller suppliers to lower prices, said Sayuri Shirai, a former Bank of Japan board member who is now a professor at Keio University.

If the tariffs remain in place in the longer term, it would spell more damage for regional economies hollowed out by demographic decline, she said.
The risks for Japan are already clear. The economy shrank in the first quarter, and Tokyo has compiled emergency economic measures to ease the pain of tariffs.

"Automobile exports are just too important to Japan for a 25% tariff to stay in place," said David Boling, a former U.S. trade official who is now a director at consulting firm Eurasia Group.

Boling said the U.S. is unlikely to go below the 10% it agreed with Britain.
Trump introduced a 25% tariff on automobiles and later a 24% tariff on all Japanese goods. The latter was slashed to 10% for 90 days, which runs out in July.

Akazawa, the trade envoy, on Tuesday said Japan was sticking to its guns and wanted tariffs eliminated. A White House spokesperson declined to comment on the negotiations.

A U.S. State Department spokesperson said the Trump administration wanted trading partners to align with U.S. efforts to achieve "fairness and balance in our trading relationships and protect U.S. economic and national security."

Two senior Japanese officials told Reuters Japan's auto industry was increasingly looking like a laggard and needed to use the tariffs as an opportunity to implement sweeping changes to catch up with EV rivals.

In a statement, the trade ministry said that regardless of U.S. tariffs, Japan's auto industry needed to respond to significant changes in the competitive environment.

Japan's top auto suppliers, called Tier 1, procure parts from Tier 2 suppliers, and so on down the chain. At the bottom are firms that can be little more than neighbourhood workshops grinding out a single part.

Government officials have previously urged smaller companies to innovate and consolidate, to gain scale.

At regional lender Ashikaga Bank, an automotive industry team supports some 200 companies, around 80% of which are Tier 2 or lower suppliers. A member of the team not authorised to speak publicly said they worried tariffs would lead to higher vehicle prices and a decline in Japanese car sales in the U.S., hitting the bank's clients.

Shinichi Iizuka, president of Toa Kogyo, a suspension maker in Subaru's hometown of Ota, near Takasaki, said the tariff burden will likely be shared by consumers, car dealers, automakers and suppliers.

Some 70% of Subaru's car sales are in the U.S., where it relies on both local manufacturing and imports. On Monday, Subaru said it would raise prices on several U.S. models.

Subaru CFO Shinsuke Toda this month said it was willing to talk with suppliers about sharing their burden, adding the situation remained unclear.


IT'S PERSONAL

Suzuki's drive to diversify Kyowa Industrial into medical devices mirrors the pivot made by her father during the 1980s trade friction, when Kyowa ditched mass production of less-profitable auto parts to focus on higher-margin prototypes and racing-engine components. Suzuki took over in 2000 and her father died in 2013.

Before Trump's tariffs, Suzuki had planned to build a U.S. track record in sales of medical equipment to smooth entry into other markets. With the advent of the U.S. trade barriers, she said her team considered moving production to the U.S., where costs are high, or shifting the sales focus to Asia.

Given the uncertainty around Trump's announcements, Kyowa is in talks with potential distributors in Singapore and Hong Kong, Suzuki said.

Around 70% of Kyowa's business still comes from automakers, while chip-equipment makers and Japan's space program contribute to the remainder. It supplies most Japanese car makers, General Motors and parts for Formula One race cars.

Annual sales are a modest 2 billion yen ($14 million). Still, Kyowa is larger than three-quarters of the roughly 68,000 companies that make up Japan's auto-supply chain, according to research firm Teikoku Databank.

For Suzuki, trade friction is also personal, given her deep affection for the U.S. She grew up listening to rock music on U.S. armed forces radio, learned English and went to university in America. She remembers seeing Aerosmith live at their first concert in Japan.

"Japan and America have a long history of friendship. I hope they can find a solution," she said.
 
 

Toyota Motor Corp on Wednesday unveiled its new RAV4 to the world, with plans to launch the model in Japan before the end of FY2025.

The RAV4 had its beginnings in 1994, when sport utility vehicles (SUVs) were positioned as off-road vehicles. It pioneered the crossover SUV genre for both on-and off-road driving.

Launched in 2019, the fifth-generation RAV4 was developed to further enhance its unique appeal as a model for new lifestyles. It was developed on the concept of a "Robust Accurate Vehicle with 4 Wheel Drive" as a sophisticated blend of the power and utility of an SUV.

It also adopted a new platform based on the Toyota New Global Architecture (TNGA), Toyota's structural innovation within the automobile manufacturing process. It delivered responsive driving performance with maneuverability and stability for any road surface.

Toyota said that under the concept of "Life is an Adventure," this sixth-generation RAV4 seeks to become a vehicle that allows any driver to enjoy an active lifestyle.

The driving experience has been advanced with a newly developed hybrid system that enhances acceleration. 

The key to advancing vehicle intelligence is Arene, Toyota's first software development platform. By utilizing Arene, Toyota aims to achieve a greater level of safety and peace of mind, as well as enrich the mobility experience to make the new RAV4 a companion that fits seamlessly into various lifestyles, whether in urban living or outdoor adventures.
 
 

Japan’s inflation-adjusted real wages fell 0.5 pct in fiscal 2024, which ended in March, from the previous year, down for the third straight year, the labor ministry said Thursday.

Although historic pay increases were achieved in this year’s “shunto” spring wage negotiations in the country, wage growth remained slower than inflation.

Earlier this month, the government set a goal of achieving real wage growth of some 1 pct annually in the five years through fiscal 2029.

While the pace of decline in real wages slowed from a fall of 2.2 pct in fiscal 2023, price hikes for food items such as rice and daily necessities have put pressure on households.

It is uncertain whether the government will be able to achieve the goal, also reflecting persistent uncertainty surrounding the global economy due to the high tariff policy of U.S. President Donald Trump.

In fiscal 2024, nominal monthly wages per worker, including base salary and overtime, rose 3.0 pct to ¥349,388 on average, up for the fourth successive year and marking the steepest increase in 33 years, thanks to the results of the shunto wage talks and higher minimum wages.

Still, the county’s real wages failed to outpace inflation as the consumer price index excluding imputed rent, used to calculate real wages, grew 3.5 pct.

Meanwhile, a real wage index calculated for international comparison using the overall CPI, which includes imputed rent, was unchanged from the previous year, coming out of negative territory for the first time in three years.
 
 

 
Not only rice but most daily commodities have increased in price, which has diminished the popularity of the Japanese government.

Over 100 years ago in Japan, a shortage of rice and a steep rise in its price caused a great uproar for about a month. This has been called the Kome Sodo, or rice riots. Although Japan at the time was not a democratic country, the turmoil adversely affected politics, causing the government of the day to fall.

Present-day Japan is not the same country it was a century ago, and nothing like a desperate clamor for food will happen. But it is true that not only rice but most daily commodities have increased in price, which has diminished the popularity of the government.

An opinion poll conducted by The Yomiuri Shimbun in September showed that more than 90% of respondents felt that rising prices were a burden on households. Those who felt so gave Prime Minister Shigeru Ishiba a low approval rating.

This should be no surprise. At least as far back as the French Revolution, which broke out amid fierce inflation, people suffering severe price increases have been apt to feel anger and distrust toward their governments. Even in recent years, we have seen similar situations in various countries.

After the start of the war in Ukraine and economic recovery from the COVID-19 crisis, a sharp increase in energy and food prices put the world economy in turmoil, damaging the political standing of world leaders, especially in 2023 and 2024, and leading to changes in short-lived governments.

A simple illustration of this pattern is the lineup of national leaders attending the annual Group of Seven summit. At the three summits through 2019, before the pandemic, only two of the leaders were replaced.

But, 11 months after the latest G7 summit, held in June 2024 in Italy, only French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni still remain in their positions.

The other five leaders had been criticized for not dealing with inflation, with some being defeated in their national elections, while others gave up on reelection bids and stepped down because they felt less likely to win.

One of those was then U.S. President Joe Biden, who met a fate similar to that of his predecessors Gerald Ford and Jimmy Carter, both of whom were in office during the oil shock era of the 1970s and failed in their bids to win another term.

In Japan, too, the ruling Liberal Democratic Party and its coalition partner Komeito suffered severe setbacks in the House of Representatives election held in October 2024. In addition to issues of money in politics, many voters held the LDP administration responsible for economic hardship caused by rising prices.

However, inflation is triggered not only by domestic policies but also by exogenous factors such as wars in distant lands, which are beyond the realistic control of governments not a party to them, making it unfair for opposition parties to place the blame for inflation on the incumbent administration.

Japan’s consumer prices in fiscal 2024 rose 3% from the previous year. Because the Japanese economy had been in lingering deflation for more than three decades, inflation started later than in other countries. Also, rising labor costs due to a decline in the working-age population will surely continue to bump up prices.

Ishiba’s administration has no immediate and easy remedy to counter structural inflation without worsening economic conditions. I am sure that Ishiba is afraid of criticism from voters that he lacks an effective economic policy. He has given up on his longtime policy regarding budget discipline. So far, his administration has done nothing but expand government expenditures to ease the grievances and fears of the people.

Another challenging factor is the unpredictable tariff policy of the U.S. government led by President Donald Trump. The policy may be negotiable, but the Japanese government should brace for Trump’s flip-flopping, which has been happening very often.

Now, Ishiba’s minority government consisting of the LDP and Komeito seems to have no other option but to concede to louder voices from the opposition demanding lower tax burdens, even though some economists argue that tax cuts and cash handouts are not desirable ways to deal with inflation. Nearly all parties have been swayed by an economic populism that focuses on short-term benefit.

This is not unique to Japan, but it is not too much to say that it is deplorable that so many politicians are downplaying the serious truth that Japan has huge financial deficits and that large-scale tax cuts will be paid for by future generations that are becoming smaller than the ones preceding them.

The immediate political situation, with the House of Councillors and Tokyo Metropolitan Assembly elections both to be held this summer, has reinforced this tendency.

One of Ishiba’s mentors was Kakuei Tanaka, who served as prime minister from 1972 to 1974 and struggled with skyrocketing prices after the oil shock.

To counter this inflation, Tanaka introduced sweeping tax cuts and expanded social security spending, including pension benefits and medical costs for the elderly. Unfortunately, Tanaka’s measures to stimulate demand made consumer prices even higher in 1974.

The Tanaka-led LDP conducted a vigorous campaign for the upper house election, but the party was defeated. Although the Tanaka administration had a solid majority of seats in the lower house, his popularity had been damaged by a money scandal and he was forced to resign a few months later.

This demonstrates that those who take incorrect measures against inflation to simply please voters are likely to lose on both fronts.

In contrast to Tanaka, who had been a leader of a large faction in the LDP, Ishiba has a weak political base. No one knows how long he can remain in office. In any case, he or his successor will be haunted by the possibility of a 21st-century version of Kome Sodo.

If that happens, all they can do is to choose whether to be criticized for a lack of strategy or to concede to populist policy and repeat the costly mistakes of 1974.
 
 

The monthly number of foreign visitors to Japan hit a record high in April amid the cherry blossom season, a Japan National Tourism Organization report showed Wednesday.

The number of inbound visitors is estimated to have risen 28.5 pct from a year before to 3,908,900 in April, topping 3.9 million for the first time for a single month.

Demand for travel to Japan, especially from China, Hong Kong, the United States and Australia, surged as cherry blossoms bloomed in many parts of the country. The reporting month also included Easter holidays.

By country or region, the number of visitors from mainland China jumped 43.4 pct to 765,100, followed by 721,600 visitors from South Korea, up 9.1 pct, 537,600 from Taiwan, up 16.9 pct, and 327,500 from the United States, up 43.1 pct.

The record monthly figure "seems to be attributed to brisk demand in China for visiting Japan and an increase in the number of flights," Japan Tourism Agency Commissioner Naoya Haraikawa said at a press conference.
 
 

Nissan Motor Co on Monday told employees at its signature Oppama plant in Kanagawa Prefecture that reports of its planned closure were not definitive, according to some workers at the factory.

The struggling Japanese automaker was reported on Saturday to be considering shuttering the plant in Yokosuka and the Shonan plant of its unit, Nissan Shatai Co, in Hiratsuka, raising uncertainty over the future employment and treatment of the workforce.

The country's third-biggest automaker by volume said last week that it will shut seven vehicle plants and cut 20,000 jobs globally after logging a net loss of 670.90 billion yen for fiscal 2024.

Nissan pioneered electric vehicle production at the Oppama plant, which has an annual production capacity of around 240,000 vehicles and employed 3,900 people, including researchers, as of the end of October last year. The Shonan plant builds commercial vehicles.

The prefectural government held an emergency meeting on Monday to discuss offering consultation and reemployment services in reaction to the potential closures.

"If they really do close, it will have a huge impact on employment and the economy," Kanagawa Gov Yuji Kuroiwa said at the meeting. "We will consider our options from a multitude of angles."

Following the discussions, Kuroiwa told reporters that Nissan contacted the prefecture on Saturday after the initial reports. Nissan officials visited the prefectural office on Monday to inform it that nothing has been decided.

The prefectural government conveyed to Nissan its hope that the automaker will endeavor to limit the consequences of its actions.

During a regular press conference on the same day, Yokosuka Mayor Katsuaki Kamiji emphasized the importance of the more than 60-year history of the Oppama plant and said he hoped it would be "restored to its former brilliance."

Nissan officials also visited the city on Monday.
 
 

The Economy, Trade and Industry Ministry will from fiscal 2028 introduce a car fuel partly mixed with biofuels made from corn, sugarcane and other biomass.

The fuel, which would mix gasoline with up to 10% biofuels, will be available in selected areas and is expected to be introduced where oil refineries and oil tanks are located.

The plan is aimed at building momentum to decarbonize the transport sector, which is responsible for about 20% of the country’s carbon dioxide emissions. The ministry will include the policy in its action plan for introduction of biofuels, which will be announced at a forthcoming expert panel meeting.

The government initially drew up plans in November last year to start providing fuels containing up to 10% biofuel in fiscal 2030. About 40% of new vehicles sold in the country are compatible with the fuel mixture.

The ministry’s decision to introduce the fuels two years earlier is intended to identify potential issues regarding safety, quality maintenance and transport systems among others to allow the subsequent plans to go smoothly.

Areas where the fuel will be introduced will be decided on by autumn, and financial support will be provided for the costs involved, such as renovating fueling stations. The government has already received approval for the plan from oil wholesalers and carmakers.

To expand use of biofuels, it is necessary to raise its mixture rate even higher. The government is planning to ask carmakers to make all new vehicles compatible with mixed fuels with 20% biofuels in the early 2030s and intends to start providing such mixed fuels in fiscal 2040.

Biofuels are made from biological resources, such as corn and sugarcane. Biofuels emit CO2 when burned but they are regarded as making de facto contributions to decarbonization because CO2 is absorbed by their biological ingredients when they grow.

The use of biofuels is spreading worldwide. Countries such as Brazil and the United Kingdom have made it mandatory to offer mixed fuels containing a certain percentage of biofuels.

Japan has a policy to procure biofuels from Brazil, the United States and elsewhere, but stable procurement and cost reduction will be problems to overcome if Japan is to make biofuels widely available.