Tokyo stocks plunged on Monday, the final day of Japan's 2024 fiscal year, with the Nikkei index ending down 4 percent at a seven-month low amid selling triggered by concern over the adverse impact of U.S. tariffs on the Japanese economy.

The 225-issue Nikkei Stock Average slid 1,502.77 points, or 4.05 percent, from Friday to 35,617.56, its lowest closing since Aug. 9, and finishing down 11.8 percent from a year earlier. The broader Topix index finished 98.52 points, or 3.57 percent, lower at 2,658.73.

All sectors lost ground on the top-tier Prime Market, with decliners led by insurance, nonferrous metal, and oil and coal product issues.

The U.S. dollar briefly weakened to the upper 148 yen range in Tokyo, as the yen, seen as a safe-haven asset, was bought on fears of an economic slowdown in the United States due to President Donald Trump's trade policies, dealers said.

At 5 p.m., the dollar fetched 149.13-15 yen compared with 149.75-85 yen in New York and 150.38-40 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.0831-0832 and 161.53-57 yen against $1.0828-0838 and 162.18-28 yen in New York and $1.0786-0788 and 162.21-25 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond ended at a four-week low at 1.485 percent, down 0.060 percentage point from Friday's close. The debt was bought as a safe asset as the Nikkei stock index sharply dropped.

On the stock market, the Nikkei benchmark followed Wall Street's plunge late last week as fears grew over a potential economic slump accompanied by high inflation in the world's largest economy.

Heavyweight technology stocks fell sharply following declines by their U.S. counterparts, while auto shares were sold off ahead of Trump's additional 25 percent tariffs on all vehicles made outside the United States, set to take effect on Thursday.

"Concern about the Japanese economy has started to smolder, considering (the tariffs' expected) adverse impact on the auto industry, which is the country's key industry," said Kazuo Kamitani, a strategist at the Investment Content Department of Nomura Securities Co.

While optimism prevailed before Trump took office in January, as he was seen as mindful of financial markets, sentiment has since worsened as he announced a series of aggressive tariff measures despite continued stock declines, brokers said.

"The market saw that the effects of the tariffs have started to influence the real economy in the United States," dealing a blow to Japanese equities as well, said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.

"Investors have found it difficult to factor in the impact of the tariffs, as the U.S. administration is taking time to announce measures one after another, possibly leading to a risk of stocks sliding further," Yamaguchi added.
 
 

Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa Insurance Co. have entered into merger discussions, with the target date for the merger set for April 2027.

If the merger is realized, the domestic non-life insurance sector will be dominated by three mega-companies, representing a shift to a structure similar to that of the banking industry.

The sector’s reorganization over the past quarter century, which kicked into full gear during a period of liberalization in the insurance sector and the accompanying intensification of competition, has reached its final stage.


Survival

A little after 4:30 p.m. on Thursday, the day before the announcement, Shinichiro Funabiki, president of both MS&AD Insurance Group Holdings, Inc. and Mitsui Sumitomo Insurance Co., and Keisuke Niiro, president of Aioi Nissay Dowa Insurance Co., met with Yutaka Ito, director-general of the supervision bureau, at the Financial Services Agency (FSA) in Kasumigaseki, Tokyo.

It was a 15-minute meeting, during which the two presidents informed Ito that they planned on Friday to proceed with discussions on a merger of their companies. As they left the room after the meeting, the two were seen chatting amicably.

“We aim to become a world-leading insurance and financial group by working toward consolidating our strengths and improving management efficiency,” MS&AD Insurance Group Holdings, which controls the two firms, emphasized in an announcement made on Friday.

To survive in the domestic market, where population decline and other factors have made little room for further growth, MS&AD Group has shifted toward the judgment that a merger of the two companies is more desirable than the current structure, in which the two firms coexist under a joint holding company.


Concern

However, before the decision was made, a series of twists and turns took place due to persistent reluctance on the part of Aioi Nissay Dowa Insurance. Aioi Nissay Dowa Insurance, whose earning power falls short of Mitsui Sumitomo Insurance’s, had been rife with concerns that it “might be swallowed up” by its merger partner.

In the fiscal year ended on March 31, 2024, Mitsui Sumitomo Insurance’s net income totaled ¥167.7 billion. Aioi Nissay Dowa Insurance, on the other hand, posted a total of ¥56 billion net income, about one-third of Mitsui Sumitomo’s.

What Niiro was concerned about in particular was how the company’s employees would be treated. He laid bare his concern to those around him, saying, “Unless the merger is made in a manner that is mutually satisfying, we will end up having many unhappy people.”

While approving the merger plan, senior FSA agency officials asked Mitsui Sumitomo Insurance to “proceed carefully with dialogue.”

Funabiki and Niiro have had a series of behind-the-scenes talks since last year to reconcile their views. At the same time, Funabiki got other related major companies on board with the merger plan, thus clearing the way for it to happen.

In 1996, the non-life insurance industry started to see the effects of moves to liberalize the insurance sector, such as allowing insurers to freely set their premiums.

Those moves brought about the collapse of the “convoy system,” under which government regulation had prevented weak companies from going under, and led to a succession of mergers and corporate integrations amid an intensification of market competition.

The birth of Sompo Japan Nipponkoa Insurance Inc. — presently Sompo Japan Insurance Inc. — through a merger of Sompo Japan Insurance Inc. and Nipponkoa Insurance Co. in 2014 ushered in a domestic non-life insurance sector comprised of four major insurers. Now, the next chapter in the history of the sector is being written.


‘Thorny issues’

The crucial moment for the merger has yet to come. How to allot executive posts and what to do with employees who become redundant are the toughest issues to be tackled, and finding a way to conclude the deal with mutual satisfaction will be an uphill battle.

“The merger ratio is connected to the number of executive posts allocated, so that will be a difficult topic of discussion,” said a senior executive of Aioi Nissay Dowa. “Disputes over the name of the new company are also inevitable, so there are many thorny issues ahead.”
 
 

 

Core consumer inflation in Japan’s capital stayed above the central bank’s target and accelerated in March on steady gains in food costs, data showed on Friday, keeping alive market expectations of a near-term interest rate hike.

The data, which is closely watched by policymakers as a leading indicator of nationwide price trends, highlights mounting inflationary pressure as companies continue to pass on rising raw material costs to households.

The Tokyo consumer price index (CPI), which excludes volatile fresh food costs, rose 2.4% in March from a year earlier, government data showed, faster than a median market forecast for a 2.2% increase. It accelerated from a 2.2% gain in February.

A separate index for Tokyo that strips away both fresh food and fuel costs — closely watched by the BOJ as a measure of domestic demand-driven prices — rose 2.2% in March from a year earlier after a 1.9% rise in February, the data showed.

Food prices rose 5.6% in March, faster than a 5.0% gain in February. The cost of rice surged 92.4% in March, a sign of the pain households were feeling from rising living costs.

The BOJ exited a decade-long, radical stimulus program last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably hitting its 2% inflation target.

Governor Kazuo Ueda has said the BOJ will keep pushing up borrowing costs if continued wage gains underpin consumption and allow firms to raise prices, thereby maintaining inflation stably around its 2% target.

The Tokyo CPI data will be among factors the BOJ will scrutinize in producing fresh quarterly growth and price forecasts at its next policy meeting on April 30-May 1.

A Reuters poll showed many analysts expect the BOJ’s next rate hike to come in the third quarter, most likely in July.
 
 

Prices of rice in Tokyo jumped around 90 percent in March from a year earlier, with the government's recent release of stockpiles having limited impact, consumer price data showed Friday.

The 89.6 percent increase, bigger than the 77.5 percent year-on-year growth in February, was the largest rise since 1971, when comparable data became available, according to the government's preliminary data for Tokyo's 23 wards.

Among prices of rice-related items, rice balls climbed 11.8 percent, bento boxed meals increased 8.4 percent, while those of sushi served at restaurants rose 8.7 percent, the Ministry of Internal Affairs and Communications said.

The price surges came even as the government started auctioning its stockpiles earlier this month to ease soaring prices of the Japanese staple.

The spike in rice prices followed a poor harvest in the summer of 2023 due to high temperatures that reduced the amount of rice available for distribution the following year. A sharp rise in foreign tourists has also driven up rice consumption at restaurants.

Core consumer prices excluding volatile fresh food rose 2.4 percent in Tokyo, the ministry said. The gauge is seen as an indicator of what to expect nationwide.
 

 

Foxconn, a Taiwanese semiconductor manufacturer, will hold a seminar in Japan on April 9 to outline its EV strategy.

The seminar aims to provide Japanese automakers and suppliers with insights into Foxconn’s EV plans. Jun Seki, Foxconn’s chief EV strategy officer and a former Nissan executive, is expected to speak. Foxconn has not commented on the event.

This seminar follows Foxconn’s recent agreement with Mitsubishi Motors to produce EVs for sale in Oceania, including Australia, New Zealand, and Taiwan.

This marks Foxconn’s first outsourcing deal with a Japanese automaker. It suggests a possible shift in Japan’s automotive industry amid growing competition from Chinese EV manufacturers like BYD.
 
 

The Japanese agriculture ministry on Wednesday began to accept bids in the second round of its auction for government-stockpiled rice.

The focus is on whether the release of reserve rice will help curb soaring rice prices. The government plans to consider a further release if necessary.

The ministry decided in February to release 210,000 tons of government-stockpiled rice, of which 140,000 tons were sold in the initial auction. The latest auction covers the remaining 70,000 tons.

The ministry will announce at a later date the average of successful bids and other results of the latest auction.

A total of 35 rice brands have been put out to tender, including Haenuki from Yamagata Prefecture, Tennotsubu from Fukushima Prefecture and Koshihikari from Niigata Prefecture.

The auctioned rice is expected to be handed over to successful bidders from mid-April.
 
 

The Japanese Bankers Association, or Zenginkyo, plans to terminate the exchanges of promissory notes and checks at its national electronic clearing system in April 2027.

Companies and financial institutions will still remain able to exchange such financial instruments among them including by mail.

However, many financial institutions will stop handling promissary notes and checks, making it difficult to continue using such instruments.

The government aims to abolish promissory notes and paper checks in 2026. Japan’s three megabank lenders including Mitsubishi UFJ Financial Group Inc. are set to terminate the issuance of such instruments within fiscal 2025 through March 2026.

Zenginkyo will promote a transition to online banking and electronically recorded monetary claims, which are settled automatically at due dates.
 
 

The Yomiuri Shimbun began publishing the Yomiuri Stock Index (Yomiuri 333) on Monday. The closing price on the first day was 35,507.74, a fall of 155.90 points from Friday.

The proportion of stocks that fell in price on the Tokyo Stock Exchange’s Prime Market, where the majority of the 333 stocks that make up the Yomiuri 333 are listed, was nearly 70% on Monday.

This trend was due to a lingering sense of caution about the tariff policy of the administration of U.S. President Donald Trump.

The Yomiuri 333 is a stock price index that indicates trends in the Japanese stock market. The index incorporates the stocks of 333 Japanese companies with equal weighting.

The index value is calculated once a day on weekdays and published in the evening on the Yomiuri Shimbun Online website and elsewhere.

The calculation is entrusted to Nomura Fiduciary Research & Consulting Co.

The stock index was shown on the day on a street display of IwaiCosmo Securities Co. in Tokyo’s Kayabacho district.
 
 

Japanese online shopping giant Rakuten Group Inc is considering introducing autonomous mobile robots to deliver goods amid a severe labor shortage in the transportation sector, according to a senior official.

The company plans to expand the technology to its flagship Rakuten Ichiba online shopping operations, having already launched a robot delivery service in Tokyo for groceries and other items bought from local stores, Fukutaro Yamashita, a senior manager in the company's unmanned solution department, said in a recent media briefing.

"This is a business that is needed in an era of population decline," he said.
The plan comes as e-commerce firms such as Rakuten are facing a severe shortage of delivery personnel at a time when the number of packages is increasing.

Yamashita said autonomous robots will be especially useful for last-mile deliveries, the final stage when shipments reach their destinations.

He did not specify when the company plans to introduce the robots for its e-commerce service or how many it aims to deploy.

Rakuten's current service, which started in Tokyo's Harumi district and neighboring areas in November, employs robots made by U.S. start-ups to transport groceries ordered on a dedicated smartphone site from a local supermarket to designated pickup points for a fee of 100 yen.

Rakuten has also teamed up with beef bowl restaurant chain Yoshinoya Co, U.S. coffee chain Starbucks and other businesses, and is planning to expand the number of partner stores and the area covered by the service.

Japan's revised road traffic law in 2023 made it easier for unmanned delivery services to gain traction, with autonomous delivery robots now allowed to operate on public roads under certain conditions.

The Japanese operator of the Uber Eats online food ordering platform is also offering robot delivery services in the country.
 
 

Three winters from now, Japan’s snowy Myoko highlands will be home to a $1.4 billion mega-resort built by a Singaporean fund, with hotels charging some $1,350 a night.

The project by Patience Capital Group (PCG) promises to create 1,000 jobs and spur winter tourism. But for many Myoko locals, foreign interest has become a double-edged sword, threatening overdevelopment, sky-high prices and the sweeping away of traditional culture.

Even before news of PCG’s interest, many inns, ski rental shops and restaurants in Akakura — one of five major ski resort towns in the Myoko region — had been snapped up by foreigners.

But they’re only interested in the snow and once that melts, those businesses shut. The town, also once a bustling hot-spring destination, no longer has enough going on to attract many visitors during the rest of the year.

If you come to Akakura in summer, it’s pitch dark at night, said Masafumi Nakajima, owner of local inn Furuya and head of the 200-year-old town’s hot spring-inn tourism association. He estimates only 10 of about 80 inns in Akakura operate year-round.

Located roughly 2.5 hours from Tokyo by train in Niigata prefecture, Myoko, along with the more famed Japanese ski resorts of Niseko and Hakuba, is known for powder snow, dubbed “Japow.”

The resort areas are a huge part of Japan’s tourism boom, also fueled by a weak yen, which saw inbound tourist numbers jump 17% in February, hitting a record high for that month.

Nakajima said many foreign business owners in Akakura have refused to join the local tourism association. One consequence is a lot of broken rules on the part of businesses and tourists that range from not disposing of garbage properly, to overparking to late-night fireworks.

We have no idea who they are and what they’re doing. They just come in December and disappear when spring comes, he said. Nakajima recently started approaching foreign businesses to offer lectures on the town’s rules.



Priced out

Many locals fear Myoko could go the way of Niseko.
The resort on the northern island of Hokkaido has become a world-renowned winter sports destination on the back of high-end foreign developments, but the surge in property prices brought higher taxes for locals choosing not to sell.

Inflation there — from labor costs to a bowl of ramen — has gone through the roof, pricing locals and most domestic travelers out of the market.

Hakuba, in the Japanese Alps, has followed a similar path, while one township in Myoko has already seen land prices jump as much as 9% last year.

PCG’s Tokyo-born founder, Ken Chan, said he’s mindful of local fears about his project, which will span 350 hectares and two ski slopes.

To attract visitors year-round, PCG wants to promote its two planned luxury hotels for business conferences and is considering discounts during non-peak times for local residents who want to ski or snowboard, he told Reuters.

He also intends to host a meeting with residents in the coming months.
Myoko City mayor Yoji Kido said he’s cautiously optimistic about PCG’s development plans but has heard few specifics.

Kido has been fielding more enquiries from foreign investors and conscious of local concerns, the city is considering new regulations for larger projects from the 2027 fiscal year.

It’s going to be an unusually big development for our city, he said. “I can’t deny that things aren’t worry-free.”

Koji Miyashita, the owner of a half-century-old shop in Akakura that sells steamed buns filled with red bean paste, said he sometimes feels like he doesn’t live in Japan as Westerners throng the town’s streets.

Development in Myoko should sustain the region’s culture, he said, adding: “We don’t want to be another Niseko.”
 
 

Household assets in Japan totaled 2,230 trillion yen ($15 trillion) at the end of December, growing 4.0 percent from a year earlier to a new record on rising stock prices, Bank of Japan data showed Friday.

Assets were boosted by investment trusts that jumped 27.4 percent to 136 trillion yen after the revamp last year of Japan's tax-free investment program.

Stockholdings rose 9.5 percent to 298 trillion yen while cash and deposits, which accounted for half of the total, edged up 0.6 percent to 1,134 trillion yen.

Cash fell, declining 3.4 percent to 105 trillion yen amid higher prices and an increase in cashless payments.

The proportion of Japanese government bonds held by the BOJ stood at 52.05 percent, down from 52.64 percent at the end of September.

The central bank, which held 559 trillion yen worth of government bonds at the end of December, has been reducing its purchases as part of efforts to shift away from a decade of ultraeasy monetary policy.
 
 

Japan will provide up to about 13.7 billion yen ($90 million) in loans for a hydropower plant project in Bhutan as part of efforts to deepen ties with the landlocked nation sandwiched between India and China.

Japanese Ambassador to Bhutan Keiichi Ono, who doubles as the envoy to India, and his Bhutanese counterpart, Vetsop Namgyel, signed documents regarding the loan agreement in New Delhi in February, according to the Foreign Ministry.

The construction of three waterpower stations, one in the district of Samdrup Jongkhar and two in Samtse, both bordering India, is set to start in May and is scheduled to be completed in 2029, according to the government-backed Japan International Cooperation Agency.

Selling surplus hydro-energy to India during the rainy season from around June to October is one of Bhutan's major industries, accounting for approximately 40 percent of its annual exports in value terms, according to the ministry.

The small Himalayan kingdom almost exclusively relies on hydroelectricity and has difficulty in securing enough power in the dry season, with the country's energy demand expected to keep rising along with its economic growth, the ministry said.

One of the three facilities will be a "storage hydropower" plant that uses a dam to store water in a reservoir so that it can adjust the timing of electricity generation. A Japanese ministry official said it will help meet some of the demand for power during dry spells.

By helping Bhutan realize a stable energy supply and promote power exports in the wet period, Japan aims to "contribute to the country's economic and social development and decarbonization of the Southwest Asian region," the ministry said.

For Bhutan, it is the first hydraulic plant project supported by Japan, the official said. The mountainous state is heavily dependent on India economically, and has no diplomatic ties with its northern neighbor China.

Japan views Bhutan, which has a population of nearly 800,000 and is known for its emphasis on the Gross National Happiness index, as geopolitically important and has maintained amicable relations.
 
 

U.S. President Donald Trump's proposed tariff hike on vehicle imports from April will likely lead to fewer Japanese exports and reduced domestic production, the head of the country's auto industry body said Wednesday.

If the planned tariffs are imposed, "significant domestic production adjustment is expected," said Masanori Katayama, chairman of the Japan Automobile Manufacturers Association, at a press conference in Tokyo.

Katayama, chairman and CEO of Isuzu Motors Ltd, said the association, in coordination with the Japanese government, also needs to discuss measures to support parts suppliers as they play a critical role in the industry.

Trump has said tariffs of around 25 percent on imported cars will likely be imposed on April 2, a significant increase from the current 2.5 percent.

Japan, a key security ally of the United States, sought an exemption from the new tariffs, but the United States made no promises when trade minister Yoji Muto met with officials in Washington earlier this month.

According to official Japanese trade data, about 1.37 million vehicles were shipped to the United States in 2024, accounting for 28.3 percent of its total exports to the world's largest economy in terms of value.
 
 

A consortium formed by representatives of industry, government and academia has set a target of using over 15% recycled plastic in the production of cars in Japan in 2031, and over 20% from 2036, it has been learned.

The goal is to encourage the domestic recycling of plastics from the perspective of economic and resource security in response to new regulations to be introduced by the European Union in 2031.

The consortium includes the Japan Automobile Manufacturers Association, Inc. — of which Toyota Motor Corp. is a member — the Japan ELV Recycler’s Association, the Japan Plastics Industry Federation, the Economy, Trade and Industry Ministry, the Environment Ministry and academic experts.

An action plan, which includes the targets, has been decided at a meeting held at the Environment Ministry on Monday.

Plastic is a common material in automobile parts such as bumpers and engine covers, and the amount used in the production of vehicles in Japan can reach 1 million tons per year.

However, little progress has so far been made in utilizing recycled plastic. In the future, it will be necessary to be aware of recycling from the design stage in order to increase the proportion of plastic which can be recovered and then recycled.

Based on the action plan, the government intends to support related capital investment and demonstration tests and build a supply chain for recycled plastic among automobile manufacturers, dismantling companies and recycling organizations.

The supply of recycled plastic made from end-of-life vehicle (ELVs) parts is planned to increase to 21,000 tons per year by 2030. By focusing on the use of plastics retrieved from products other than ELVs, the overall supply will be increased to 25,000 tons by 2031 and then will be increased in stages to 157,000 tons in 2036 and 200,000 tons from 2041.

The European Parliament is debating a draft regulation that would require at least 20% of the plastic used in the production of cars to be recycled plastic, which would come into effect as early as 2031.

The recycling of plastic scraps from the manufacturing process would be included in the overall percentage. If the consortium’s action plan includes plastic scraps, it is expected to be able to comply with the new regulation.
 
 

The average sales price of Japan's 2024 rice crop to wholesalers hit a record high for the sixth straight month in February, the agriculture ministry said Wednesday.

The average price stood at 26,485 yen per 60 kilograms, up 73 pct from a year before and 2 pct from a month before. It is the average of transaction prices between rice wholesalers and buyers dealing with farmers, such as the National Federation of Agricultural Cooperative Associations, or Zen-Noh.

Following a serious shortage of the country's staple food in stores in summer 2024, competition among buyers has intensified.

The ministry has decided to release some of the government stockpiled rice, but it is unclear whether this will be enough to counter soaring prices.

The ministry also released the outcome of a survey on rice acreage in 2025.
 
 

Key Points

• Japan’s central bank kept its key policy rate steady at 0.5% at Wednesday’s conclusion of a two-day meeting.
• The move, which was in line with market expectations, comes ahead of the U.S. Federal Reserve’s policy meeting, where the central bank is expected to keep its benchmark interest rate steady.
• Analysts are of the view that the BOJ will soon raise interest rates, but are split on the timing for the next hike.

 
Japan’s central bank on Wednesday kept its key policy rate steady at 0.5% in a unanimous vote, as the export-reliant country assesses the potential impact of U.S. President Donald Trump’s protectionist trade policies on its economy.

The move, which was in line with market expectations, comes ahead of the U.S. Federal Reserve’s policy meeting, where the central bank is expected to keep its benchmark interest rate steady.

“Japan’s economy has recovered moderately, although some weakness has been seen in part,” BOJ policymakers said in a statement, while cautioning of “high uncertainties surrounding Japan’s economic activity and prices, including the evolving situation regarding trade ... and domestic firms’ wage -and price-setting behavior.”

The bank is seen to be referring to reciprocal tariffs and sector-specific tariffs that Trump is expected to announce on April 2., said Hiroki Shimazu, chief strategist at MCP Asset Management Japan.

Following the rate decision, the Japanese yen was little moved, trading at 149.46 against the U.S. dollar. The benchmark Nikkei 225 index was up 0.69%.

Analysts are of the view that the BOJ will soon raise interest rates, but are split on the timing for the next hike.

Fred Neumann, chief Asia economist at HSBC, said the BOJ could next raise interest rates in June.

“June looks more likely. The market is a little bit after that, probably July is sort of what the market is thinking right now. We think a little bit earlier in June,” Neumann told CNBC’s “Squawk Box Asia” on Wednesday.

“It’s not just contingent on the Fed. It’s actually contingent on the BOJ getting some evidence that really wage increases are percolating through the economy,” Neumann said.

“We only just had the major unions negotiate, we don’t know what the smaller unions are doing, we don’t know what small or medium-sized enterprises are doing, so the BOJ tends to wait until June to get all the evidence on wages and then they can pull the trigger,” he added.

The BOJ raised short-term rates to 0.5% from 0.25% in January, its highest level since 2008, after ending a massive stimulus program last year. The central bank has signaled its readiness to hike rates further if the economic growth and inflation moves in line with its projections.

 
Trade Frictions

BOJ Governor Kazuo Ueda said at a post-meeting news conference Wednesday that “it is hard to quantify the risk,” referring to Trump’s back-and-forth comments on tariff hikes, according to Reuters translation of his remarks in Japanese.

“We will scrutinize how the U.S. trade policy unfolds, how it affects the U.S. and global economies, and how that all impacts Japan’s economic and price outlook,” he added.

Trump has slapped tariffs targeting nations including Canada and Mexico, where Japanese carmakers have major manufacturing bases. In additional to reciprocal tariffs, Trump also touted tariffs of around 25% on imported automobiles.

Japan so far has not been able to get a tariff exemption from the Trump administration despite a seemingly positive meeting between the two nations’ leaders in February.
 
‘Virtuous Cycle’

The BOJ has long reiterated that its goal is to see a “virtuous cycle” of rising prices and wages in Japan.
Japan’s largest labor union announced on Friday that it managed to secure an average 5.46% increase in wages from April — its largest increase in over three decades.

The Japanese Trade Union Confederation, or Rengo, which has around 7 million members, said that the first tabulation of the results covering 760 unions was 0.18 percentage points higher than last year’s increase of 5.28%.

Small to medium-sized businesses saw an average rate rise of 5.09%, up 0.67 percentage points from last year and the first time since 1992 that the wage hikes for such companies crossed the 5% mark.

UA Zensen, an umbrella group representing retail, restaurant and other industry unions, reportedly said 139 of its member unions received an average increase of 5.37% in monthly wages for full-time workers, slightly less than 2024′s record figure of 5.91%.

In January, Japan saw a 2-year high inflation rate of 4%, as well as household spending massively beating expectations in December, with a 2.7% rise year on year.

The December figure was the fastest that household spending had climbed since August 2022, and the first year-on-year rise since July 2024. Household spending subsequently slowed in January to a 0.8% rise.

“Inflation expectations have risen moderately,” the BOJ said in the Wednesday statement, adding that “rice prices are likely to be at high levels and the effects of the government’s measures pushing down inflation will dissipate” through fiscal year of 2025.

Revised fourth-quarter GDP figures released last week showed Japan’s economy grew 2.2% on an annualized basis, a slower pace than initially reported. The revised data also came in lower than economists’ median forecast.
 
 

The Nikkei 225 stock average retook 38,000 at one point in Tokyo trading on Tuesday morning, helped by overnight gains in U.S. stocks.

The key Japanese index finished the morning session at 37,943.23, up 546.71 points, or 1.46 pct, from Monday, after crossing the 38,000 threshold for the first time since Feb. 27 on an intraday basis.

A weaker yen against the dollar also spurred stock buying. At noon, the dollar stood at ¥149.67-67 , up from ¥148.84-86 at 5 p.m. Monday.

Major trading houses were particularly buoyant after it was revealed that Warren Buffett’s Berkshire Hathaway Inc. had raised its stakes in them.
 
 

The legal procedures related to Nippon Steel Corp and United States Steel Corp's lawsuit to nullify the U.S. government's decision to block their merger may be extended, with the companies consenting to pushing oral arguments back to May 12 from April 24, a filing released Monday showed.

According to a U.S. Steel filing with the Securities and Exchange Commission on Friday, the Justice Department asked the court for the extension in a motion submitted the same day.

The government seeks more time to complete its ongoing discussions about the merger with the two steelmakers, with the goal of removing the need for resolution of the litigation on the merits.

The document noted that both Nippon Steel and U.S. Steel had consented to the government's motion, though at the time of filing the court had yet to rule on the matter.

The government is also seeking to extend by 21 days the briefing deadlines in the lawsuit that the two firms lodged against former President Joe Biden and the Committee on Foreign Investment in the United States, a panel of U.S. federal agencies involved in screening the proposed merger.

In early January, Biden issued an order to block the $14.1 billion takeover of U.S. Steel by the Japanese company, citing national security grounds, following a recommendation by the panel also known as CFIUS.

Nippon Steel and U.S. Steel, which announced their merger plan in December 2023, filed the lawsuit after Biden's decision, claiming that CFIUS's screening process and recommendation were influenced by the former president.

In the months leading up to the Nov 5 presidential election, Biden had aligned with the leadership of the powerful United Steelworkers union to voice opposition to the sale of U.S. Steel, headquartered in Pennsylvania, which was a key battleground state in the race to the White House.

President Donald Trump, who won the election, was also against the sale. He has since said that Nippon Steel acquiring a minority stake in U.S. Steel would not cause any issues, but a foreign company owning the iconic producer would not be good psychologically.
 
 

In fiscal 2024, rice import applications submitted to the government covered a record high 991 tons as of the end of January.

Private imports of overseas rice have been increasing rapidly due to shortages in the domestic market. In fiscal 2024, rice import applications submitted to the government covered a record high 991 tons as of the end of January.

Currently, companies are able to profit from such imported rice, even though they have to pay a high tariff. Kanematsu Corp., a major trading company based in Tokyo, has decided to import an unprecedented 10,000 tons of rice in 2025.

There are two types of rice importation. Rice is either imported by the government, which is obliged to purchase a certain amount from foreign countries under the rules of the World Trade Organization, or is privately imported by trading and other companies, which pay a tariff to the government.

Up to 100,000 tons of government-imported rice for staple food use is available for the market. Records of privately imported rice are available for fiscal 2019 onward, with 426 tons imported in fiscal 2020.

The amount had since been between 200 tons and 400 tons each year, but in fiscal 2024 it reached 468 tons by the end of December. Then by the end of January, the amount had more than doubled to 991 tons.

Kanematsu last month announced it would import 10,000 tons of rice due to the high demand from those in the restaurant industry, such as gyudon beef rice bowl chains.

According to sources close to the distribution industry, the purchase price for Calrose medium grain rice produced in the United States is about 150 yen per kilogram, including transportation and other costs. After the tariff is added, the total price is about 500 yen per kilogram.

Given that domestic rice is currently sold at around 900 yen per kilogram in stores, companies can sufficiently profit from imports, the sources said.

The Yokohama-based supermarket chain OK has been selling Calrose rice at 10 of its outlets since March 7 at 3,335 yen for five kilograms, including tax.

The company will make such decisions as whether to sell the rice at other outlets depending on the sales of the rice at the 10 stores.

The system under which the government buys foreign rice is called the minimum access system. Following the 1993 Uruguay Round multilateral trade talks, the system was implemented in fiscal 1995.

Of the current rice import quota of 770,000 tons, the import of general-purpose rice for staple food use is limited to 100,000 tons. The government-imported rice sold out in fiscal 2024 for the first time in seven years due to a poor domestic rice harvest.
 
 

One of Japan's largest cold storage warehouses has been built in Kobe, a major international port and key distribution hub in the west, amid growing demand for frozen food, a logistics business operator said Monday.

GLP Japan Inc. unveiled a five-story facility with about 46,000 square meters of floor space, built with a 15 billion yen ($101 million) investment, as rising construction costs make it increasingly difficult for companies to build their own storage sites.

The warehouse, with temperatures ranging from minus 25 C to 10 C, is already fully occupied by three tenants, including a transport firm, according to GLP Japan.

Yoshiyuki Chosa, president of GLP Japan, said the company plans to invest an additional 200 billion yen over the next three to five years to further develop the facility, as establishing such warehouses near consumers has become increasingly important.
 
 

For the first time in the country, 3D printer technology will be used to construct a new building for an unmanned railway station, according to a Tuesday announcement by West Japan Railway Co. (JR West) and others.

The new Hatsushima Station along the Kisei Line in Arita, Wakayama Prefecture, will be a one-story concrete building. The structure will be 2.6 meters tall, 6.3 meters wide and 2.1 meters deep.

The project aims to efficiently construct a station if renovating an aging station poses problems.

The building parts will be produced at Serendix Inc., a homebuilder using 3D printers in Nishinomiya, Hyogo Prefecture, and assembled at the station site. The assembly is scheduled to take place after the last train on March 25. The work is expected to require about six hours.

JR West chose Hatsushima Station for the project because it is close to the sea and makes it easier for the company to check matters such as the building’s durability as it is exposed to salty air.

“We will closely examine the cost for construction, maintenance and management, and hopefully bring the project to other stations, too,” said a JR West official.
 
 

Canada's Alimentation Couche-Tard Inc, the operator of Circle K convenience stores, said Thursday that its discussions with Seven & i Holdings Co to acquire the Japanese rival have been "friendly" and that it is not considering a hostile takeover.

At a press conference, the first held in Japan by the company since the buyout talks surfaced last year, Couche-Tard founder and Chairman Alain Bouchard said the two companies' operations combined would create strong synergy.

"Japanese operations are truly world class. For a long time, we have a belief there is a unique strategic fit" between the two retailer's convenience store brands, he said.

But he also said he was "disappointed" that Seven & i has only been focusing on regulatory issues in the United States related to antitrust concerns generated by the potential deal.

The Canadian company sees "a clear path" to regulatory approval given that it has completed many acquisitions in the world's biggest economy, CEO Alex Miller said at the press conference, while Bouchard said the company will continue to pursue the deal even if it takes time.

Amid growing concerns among 7-Eleven store owners in Japan about the potential change of hands, the company said it will invest in the country and create jobs and has no plan to close stores or fire employees.

"We deeply respect the role Seven & i plays in the nation," Bouchard said, referring to how the convenience store operator has grown to be part of the social infrastructure.

The comments came as the companies remain embroiled in an increasingly acrimonious dispute, following Couche-Tard's takeover proposal for the operator of 7-Eleven convenience stores.

Seven & i said Monday it had called on the Canadian company to sell all of its stores in the United States to address antitrust concerns.

Earlier this month, the Japanese company appointed a new CEO and unveiled a series of measures, including a massive share buyback and the sale of its supermarket subsidiary to U.S. private equity firm Bain Capital, as it seeks to enhance its corporate value and fend off the proposed acquisition.

The Japanese company's founding family sought to take the firm private but recently gave up on the plan after facing difficulty in securing funding.
The envisaged deal, costing around 9 trillion yen, would have been the biggest management buyout in Japan, according to Recof Data.

Seven & i said in August last year that it had received a takeover proposal from Couche-Tard, estimated at over 7 trillion yen.

Seven & i operates more than 80,000 convenience stores around the world. The Canadian company, which also runs the Couche-Tard brand convenience store chain, has about 17,000 stores in over 30 countries and regions.
 
 

Many of Japan's biggest companies from tech conglomerates to Toyota have met union demands for substantial wage hikes for a third consecutive year, seeking to help workers cope with inflation and retain staff amid labour shortages.

As annual "shunto" or "spring labour offensive" negotiations at top firms concluded on Wednesday, electronics conglomerate Hitachi said it had agreed to a record 6.2% increase in monthly wages in line with union demands.

Major Toyota auto parts supplier Denso also plans record pay hikes while Toyota said the combined increase in pay for manufacturing staff would match that of last year, which was the highest since 1999.

Policymakers have pushed for robust pay hikes given sharply higher prices for food and record corporate profits on the back of a weak yen. But it's unclear whether the hikes will be strong enough to spur consumer spending and encourage the Bank of Japan to increase its policy rate, still at a low 0.5%, more aggressively.

Economists expect Japan Inc's average pay hike for 2025 to be similar to last year's 5.1% rise, which marked the sharpest increase in 33 years and enabled the central bank to exit its decade-long super-loose monetary policy.

Rengo, Japan's largest labour union umbrella group with 7 million members, will release a preliminary report on agreed terms on March 14. Its unions were seeking an average hike of 6.09%, up from 5.85% last year.

Naoki Hattori, a senior economist at Mizuho Research and Technologies, said that an average pay hike of 5% to 5.5% would support expectations that the Bank of Japan will continue with its practice of raising rates once every six months or so, with the next one seen in June.

"But if we get an average pay hike that is closer to 6% then that changes the complexion of things a bit," he said. "An increase in wages could lift prices, particularly in services. I don't know that we'd see a rate hike as soon as March but we could see one in May," he added.

For the central bank to increase its pace of interest rate hikes, economists say it will need to see wage growth spur consumer spending.

Kazutaka Maeda, an economist at Meiji Yasuda Research Institute, is not optimistic that will happen, saying that an average pay raise of 5-5.5% across corporate Japan this year would "just offset inflation and not drive consumer spending."

In January, the consumer inflation rate used to calculate real wages, which includes fresh food items but not rent costs, rose to 4.7% year-on-year - the highest reading in two years.

How the average pay hike turns out will also depend on whether there will also be strong pay gains at small and medium-sized firms, which employ around 70% of Japan's workforce.

Toyota has said it plans to pay more for domestic components to help suppliers fund pay rises.

"I've heard from smaller firms that they need more support to help them pass on the higher cost of wages to their customers and to increase productivity. The government will work on policy measures to help," Prime Minister Shigeru Ishiba told a meeting with union and business lobby leaders on Wednesday.

Among major companies, Mitsubishi Heavy Industries electronics conglomerate NEC also responded to union demands in full. Nippon Steel and Panasonic hiked pay but not to levels sought by unions.

Japan's economy long struggled with deflation and before 2023, annual pay increases for two decades were between 1-2%. That left its wage levels well behind the average for the OECD grouping of rich countries.

"This is an important year to ensure that momentum behind wage hikes is established so that Japan's economy can fully escape from deflation," Susumu Takimoto, Hitachi's deputy chief human resources officer, told a press conference.
 
 

The government is said to have set its first targets to boost spending on Japanese cuisine by visitors to the country and in overseas nations.

Sources say the goal is to boost tourist spending on food and beverages to 4.5 trillion yen, or 30 billion dollars, by 2030. That's triple the figure for 2023.

The government is also planning events in other countries to promote Japan's food culture.

It has set a goal to boost revenue from Japanese food-related businesses overseas to 3 trillion yen by 2030. That's nearly twice the figure for 2022.

The targets are expected to be included in the government's five-year plan on agricultural policy.
 

 

The Japanese government plans to increase the country's rice exports by nearly eight-fold to 350,000 tons, worth 92.2 billion yen ($623 million), in 2030 from 2024, according to a policy presented to a ruling party meeting Wednesday.

The plan to boost exports through improved production is also seen as a way to secure sufficient domestic supply of the Japanese staple to avoid shortages.

In its draft for a medium- to long-term basic plan for agriculture, the government kept intact its goal of raising the country's food self-sufficiency rate to 45 percent on a caloric intake basis by 2030 from 38 percent in fiscal 2022.

The figure refers to the ratio of domestically consumed food supplied by producers in the country.

The draft of the basic plan, revised roughly every five years, highlighted the need to enhance productivity in addition to expanding exports, noting that geopolitical risks and a decline in domestic farmers have destabilized food production and supply in the country.

The government aims to increase the total value of agricultural and food exports from 1.5 trillion yen in 2024 to 5 trillion yen in 2030, while boosting food-related spending by inbound tourists from 1.6 trillion yen to 4.5 trillion yen.

For rice production, the plan presented to the Liberal Democratic Party gathering aims to increase the number of farmers managing fields of 15 hectares or larger and reduce production costs from 11,350 yen to 9,500 yen per 60 kilograms to compete with cheaper imports.

Japan consumes approximately 6.6 million tons of rice a year, meaning the 350,000-ton export target would be equivalent to around half a month's domestic consumption.

While there is currently a domestic rice shortage, long-term demand is expected to decline due to Japan's shrinking population, making expanding exports a key focus.

Previous basic plans have used the food self-sufficiency rate as a key numerical target, but the latest one will feature several goals following the amendment to a related law last May. The government will seek Cabinet approval by the end of the month.
 
 

Japanese firms are feeling the most acute shortage of full-time workers since the COVID-19 pandemic, with more than half of firms understaffed, according to a private-sector survey.

Among the around 11,000 companies who responded to the January survey, 53.4 percent said they need more full-time workers, the highest since April 2020 and close to the all-time high of 53.9 percent in November 2018, Teikoku Databank Ltd said.

The sector most in need of full-time workers is information services, with shortages of system engineers, followed by construction.

The survey also found 30.6 percent of firms lack part-time workers, with staffing firms feeling the most acute shortage of nonregular workers ahead of restaurants.

The survey came as economists keep close tabs on whether the robust wage growth seen last year will continue. Major Japanese firms will soon decide their response to demands for pay hikes by their labor unions, wrapping up their annual "shunto" negotiations by the end of this month.

Some 68.1 percent of firms hit by labor shortages are planning to raise wages for full-time workers in fiscal 2025 from April, according to the research institute, apparently to secure and retain necessary workers.

Economists, meanwhile, warn that small and midsize companies will struggle to keep pace with bigger firms that have the financial resources to continue hiking pay.

"We have to be vigilant against the risk of more companies going bankrupt due to labor shortages," the research firm said, noting that the number of such bankruptcies hit a record high in 2024.
 
 

 
A majority of Japanese expect U.S.-Japan economic relations to strengthen under the administration of U.S. President Donald Trump, according to a Japanese Foreign Ministry survey.

Asked in which area relations are expected to strengthen, with multiple answers allowed, 52.1% of respondents pointed to "economy, trade and finance," followed by 49.7% who cited "security, counterterrorism, disarmament and nonproliferation."

The results are believed to have been influenced by Trump's comments including on tariffs.

Also in the survey, 81.5% said they strongly or somewhat agree that the security environment in East Asia is becoming more severe.

With Japan and South Korea marking the 60th anniversary of the normalization of diplomatic relations, 53% said that the two countries should promote efforts to address security challenges including North Korea, and 35.7% and 34.4% called for resolving the issue of Takeshima, the Sea of Japan islets controlled by South Korea, and history-related issues, respectively.

The telephone survey received valid responses from 1,000 people age 18 or over across Japan between Feb. 3 and 9.
 
 

Seven & i Holdings, the Japanese operator of the 7-Eleven convenience store chain, appointed its first foreign CEO and handed him the task of overhauling its business to fend off a $47 billion overseas takeover bid and engineer a recovery.

After a tumultuous six months that began when it received a buyout offer from Canadian Circle-K operator Alimentation Couche-Tard (ACT), Seven & i announced its most far-reaching leadership and business restructuring on Thursday.

Lead outside director Stephen Dacus will succeed Ryuichi Isaka as chief executive on May 27, the company said.

Addressing reporters in Japanese and English, Dacus said talks would continue with Couche-Tard, but significant regulatory hurdles stood in the way of a merger.

"What I do not think our shareholders would want is for us to spend two plus years in limbo just for that to be rejected by the U.S. courts," he said.

Seven & i, which has more than 80,000 7-Eleven stores in 20 countries and regions, also said it agreed to sell its superstore unit to Bain Capital for 814.7 billion yen ($5.50 billion) and that it would sell down its ownership of Seven Bank to below 40%.

Additionally, the retail conglomerate said it will buy back about 2 trillion yen worth of shares through fiscal year 2030, and pursue a listing of its North American convenience store subsidiary by the second half of 2026.

Seven & i has been the target of investor criticism over its capital allocation for years, and in August received the ACT buyout offer that was later raised to $47 billion.

In response, a group led by Seven & i's founding Ito family mounted its own buyout offer, while the company's management said they could chart an independent path to recovery.

Dacus told reporters he could identify with 7-Eleven franchisees as his father had been one, and that he'd worked the midnight shift in the store as a teenager.

The incoming CEO, who previously held executive roles with Walmart and Fast Retailing, also led a special committee vetting the takeover bids. The Ito family group failed to secure a reported $58 billion in funding for its offer, scuttling the deal late last month.

Dacus was replaced as head of the special committee by another outside director, Paul Yonamine, the company said on Thursday.

Seven & i shares surged 6.1% on Thursday after Bloomberg News first reported the share buyback plan.

The buyback looked like an attempt to "try to lift market value and fend off" Couche-Tard, said Lorraine Tan, a regional director at Morningstar.

"Fundamentally, one of my immediate concerns is how they are funding the dividends and buyback," she said. "It appears that they will have to rely on borrowings but we note the talk of a listing for its U.S. business."

Some analysts felt Seven & i's restructuring plan may not derail ACT's bid for the company.

The announced divestitures leave Seven & i mainly with its convenience store businesses at home and abroad, which is what ACT really wants, said Travis Lundy, a special situations analyst who publishes on Smartkarma.

"Because the IPO is not for a while, it would suggest there is still time for ACT to make a deal for the whole shebang, assuming they can come up with a divestment package," he said.

Bain said separately on Thursday it plans to list the superstore unit, known as York Holdings, in about three years after scaling it up through acquisitions.


ISAKA REIGN CRITICISED

Seven & i turned the humble 7-Eleven store into a popular food destination in Japan by serving up fresh sandwiches, rice balls and rows of boxed lunches, changing how millions of people eat.

Isaka has been with the 7-Eleven operator since 1980, becoming its president in 2016. But his tenure has been criticized by foreign investors, including ValueAct Capital, which tried to oust him in 2023 for pursuing what it said was a flawed strategy.

Isaka led Seven & i's $21 billion acquisition of Marathon Petroleum's Speedway gas stations in 2020, outbidding ACT and greatly expanding the company's footprint in the North American market.

But some analysts and investors said the company overpaid for the U.S. assets while remaining saddled with low-margin subsidiaries in Japan, such as its superstore segment.

"They jumped into the global market before they had a solid foundation in place," said independent retail analyst Akihito Nakai. "In hindsight, they got the order wrong."

More recently, U.S.-based Artisan Partners urged the company to consider a competitive bidding process for takeover proposals.

Isaka laid out a turnaround plan in October, aiming to roughly double sales to 30 trillion yen by 2030 by expanding overseas and focusing on fresh-food offerings.

Dacus indicated he would stick to the food-centred strategy, saying Seven & i was working with vendors to bring the products found in Japan to store shelves in the U.S.

"I think if we can bring that same quality of food to our stores in the U.S., that would be a huge and sustainable source of growth," he said.

If ACT succeeds in winning control of Seven & i, it would be the biggest foreign takeover of a Japanese company.

Seven & i was classified as "core" to Japan's national security in September, although the finance ministry said at the time it would not create hurdles for a takeover.
 
 

Indonesia's Coordinating Ministry for Economic Affairs and the Japanese Ministry of Economy, Trade, and Industry (METI) have signed a letter of intent (LoI) on cooperation in developing the Kayan hydropower plant in North Kalimantan.

"For Indonesia, the Kayan hydropower plant is not just an infrastructure project within the framework of AZEC (Asia Zero Emission Community)," the ministry's Deputy for the Coordination of International Economic Cooperation Edi Prio Pambudi said in a statement issued on Wednesday.

"This project is a strategic investment for Indonesia's energy security and decarbonization efforts," he added.

He emphasized that as a strategic partner, Japan will help Indonesia implement energy transition projects and achieve net-zero emissions by 2060.

Therefore, the Indonesian government has urged Japan to strengthen cooperation in implementing practical, scalable, and inclusive energy transition projects in the country.

Meanwhile, Deputy Commissioner for International Affairs at the METI Masanori Tsuruda said that the LoI on the development of the Kayan hydropower plant needs to be immediately followed up by both governments.

The development of the Kayan hydroelectric power plant is challenging, but he is confident that the good bilateral relations between Japan and Indonesia are a strong foundation for the development of this project, he added.

As per information provided on the official website of PT Kayan Hydro Energy the project is expected to be Indonesia's first large-scale renewable hydropower development to support hydro-industrialization.

Once completed, the hydropower plant will supply renewable energy to Indonesia's largest green industrial park in Tanah Kuning, North Kalimantan.

With a capacity of 9 thousand MW and a total investment of USD17.8 billion, it is touted to be the largest hydroelectric power plant in Southeast Asia.

The project will also support Indonesia's target of bringing the share of renewable energy in the national energy mix to 23 percent by 2025 and 31 percent by 2050, as a part of its commitment to a sustainable energy future.
 

Japanese and British foreign and economy ministers on Friday affirmed the importance of free and fair trade at a time when the international economic order has been shaken by U.S. President Donald Trump's tariffs.

The four ministers, meeting in Tokyo, also agreed to work together to strengthen economic security.

The talks were the first meeting of the Japanese and British foreign and economy ministers. A similar dialogue has already taken place between Japan and the United States.

"We'll strive toward maintaining and strengthening the international economic order based on free and fair rules," Japanese Foreign Minister Takeshi Iwaya said at a joint press conference after Friday's meeting.

Japanese economy minister Yoji Muto said Japan and Britain, which share the same values of free trade, will further strengthen ties to counter the rise of protectionist moves worldwide.
 
 

Japanese electronics giant Sony and drinks maker Suntory are stockpiling inventory in the United States while their peers shift production or supply chains in efforts to fend off an evolving threat of U.S. tariffs on the export-reliant economy.

In his latest trade salvo this week, President Donald Trump hinted that he might target Tokyo next, after throwing up new tariff barriers against Mexico and China, low-cost production hubs favoured by key Japanese industries, such as automakers.

The scale of the tariff threat for Japan Inc has been further highlighted by Honda's decision to produce a new model of one of its top-selling cars in the United States, instead of Mexico, Reuters exclusively reported on Monday.

Japan Display, a major supplier of LCD screens to the auto industry, said it was also considering production of some items in the United States, partly to avoid tariffs, a move a recent survey showed is being considered by hundreds of peers.

Major Japanese suppliers to iPhone maker Apple - Alps Alpine  and Murata Manufacturing are among other firms looking to insulate supply chains from escalating trade tension.

"Corporates are now more aware that Japan could also be a target," said Norihiro Yamaguchi, a senior economist at Oxford Economics.

Yamaguchi pointed to Trump's warning that the United States may use tariffs to offset any competitive disadvantage to its manufacturers if Japan and China do not stop reducing the value of their currencies.

The protectionist U.S. president is set to levy reciprocal tariffs globally and industry-specific duties that could further hurt Japan, the world's fourth largest economy, a top exporter to the United States and its biggest source of foreign investment.

Japan has denied devaluing its currency and pledged U.S. investments to assuage Trump's concerns on trade. Its trade minister is set to visit Washington as soon as next week to seek tariff exemptions, domestic media have said.

Japanese companies are particularly exposed to trade duties as many have concentrated for decades on overseas sales, particularly to the United States, to counter weak domestic demand and a shrinking population, Yamaguchi said.

Almost nine in 10 Japanese companies expect Trump's policies to hurt business, a Reuters survey showed last month.

Of these, 72% saw his trade strategy, including more tariffs, as the most detrimental factor, while 26% chose friction between the United States and China, Japan's other major trading partner.

Even before accounting for tariffs that may target Tokyo, think tank the Daiwa Institute of Research projects that a trade war between the United States and other countries including China could shave 1.4% from Japan's $4.2-trillion economy over two to three years.

Stefan Angrick, a senior economist with Moody's Analytics, said it was challenging to quantify the economic damage from tariffs as the business uncertainty they created could be more devastating than any direct impact.
 
 

Raising the ratio of defense spending to gross domestic product is not a top priority in Japan's efforts to boost its defense expenditures, Chief Cabinet Secretary Yoshimasa Hayashi said Wednesday.

"What's important is the substance of our defense capabilities," Hayashi told a news conference. "It's not that the amount and the GDP ratio are put before everything else."

In a statement for a U.S. Senate committee hearing, Elbridge Colby, nominated by U.S. President Donald Trump for undersecretary of defense for policy, urged Japan on Tuesday to raise its defense spending to at least 3 pct of its GDP, higher than the Asian country's target of 2 pct for fiscal 2027.

"Our country will constantly examine its measures to reinforce deterrence and response capabilities and will steadily strengthen its defense capabilities drastically," Hayashi also said.
 
 

The Japanese and British governments are arranging to reaffirm the promotion of energy cooperation between the two countries at a ministerial economic dialogue, according to Japanese government sources.

It will be the first time for Japan and the United Kingdom to hold a two-plus-two meeting focused on economic matters.

The economic ministers intend to sign a memorandum of understanding on cooperation in offshore wind power, with the aim of further strengthening economic ties between the two countries, the sources said.

Foreign Minister Takeshi Iwaya and Economy, Trade and Industry Minister Yoji Muto are set to meet with their British counterparts Foreign Secretary David Lammy and Business and Trade Secretary Jonathan Reynolds at the two-plus-two meeting, which is planned to take place in Tokyo on Friday.

The officials are expected to agree on establishing a consultative framework for strengthening economic security. They will also likely focus on measures to enhance both countries’ energy security.

Prior to the talks, Muto and Reynolds are expected to sign the memorandum of understanding, which will include provisions for joint research on basic technologies related to floating offshore wind power, as well as for ensuring the stability of the supply chain and promoting cooperation between the companies of both countries, the sources said.

The officials are also expected to discuss strengthening their cooperation on helping to rebuild Ukraine, which continues to face Russian aggression, and enhancing relations with countries in the Global South.

The meeting will also affirm the importance of bolstering the functions of the World Trade Organization amid concerns over U.S. President Donald Trump’s protectionist trade policies, such as higher tariffs, according to the sources.

In November, Prime Minister Shigeru Ishida and British Prime Minister Keir Starmer agreed to establish the economic version of the two-plus-two meetings when they met in Brazil. The United Kingdom will be the second country, after the United States, to hold such a meeting with Japan.
 

 

Shares of the owner of 7-Eleven plunged on Tuesday after a report said the Japanese retailer plans to reject a multibillion-dollar takeover offer by Canada's Alimentation Couche-Tard (ACT).

Seven & i, which operates some 85,000 convenience stores worldwide, last year rebuffed an ACT offer worth nearly $40 billion that would have been the biggest foreign buyout of a Japanese firm.

The Yomiuri daily reported that a special committee scrutinizing ACT's raised offer of reportedly around $47 billion has decided formally to say no to that too.

The decision was due in part to antitrust concerns, given Seven & i and ACT's overlapping network of stores in the United States, the daily added.
Seven & i shares, which have been highly volatile since ACT's approach was first announced, shed as much as 10 percent after the Tokyo market opened on Tuesday.

The latest news followed separate reports that the 7-Eleven owner is set to replace its CEO Ryuichi Isaka with outside director Stephen Hayes Dacus.

Dacus, who has also worked for Uniqlo owner Fast Retailing and the Japanese arm of U.S. retail giant Walmart, would also be Seven & i's first foreign CEO.

Seven & i said on Monday "no decision has been made" about management changes.

Last week Seven & i said its founding family failed to put together sufficient financing for a buyout to fend off ACT's offer.

The franchise began in the United States, but it has been wholly owned by Seven & i since 2005 and is the world's biggest convenience store brand.

ACT, which began with one store in Quebec in 1980, now runs nearly 17,000 convenience store outlets worldwide including the Circle K chain.
 
 

The prices of more than 2,000 food and drink products will rise during March, research firm Teikoku Databank said.

According to a survey of 195 food manufacturers by Teikoku Databank, 2,343 items will cost more. The number of items that have increased in price this year has exceeded last year's for three consecutive months, Teikoku Databank said.

By category, 1,381 processed foods such as frozen foods will see the biggest increases.

In addition, the cumulative number of items with price increases already announced by manufacturers through August is 10,797.

Companies say the price rises are due to the higher cost of imported ingredients, raw materials and the weak yen.
 
 

Bandai Namco Holdings Inc. opened a Cross Store, which sells anime goods and other products, in Brooklyn, New York, on Friday.

It is the first Cross Store in North America and one of the largest retail stores in the United States for purchasing such goods.

Fans of Japanese anime were seen shopping for trading cards of the popular anime “One Piece,” “Gundam” plastic model kits, “Tamagotchi” toys and other products, including those contained in the about 200 capsule toy vending machines installed at the store.

A 29-year-old customer from New Jersey who purchased $700 (¥105,000) worth of One Piece trading cards started lining up at the store at 5 a.m. The customer, who was holding a large shopping bag, said that they have been a fan of One Piece for seven years and that they wanted to come back to the store again.

Bandai Namco, which also opened a large Cross Store in London in August 2023, is strengthening its overseas expansion.
 
 

Rice prices in Japan have remained high despite hopes that they would normalize after the government announced plans two weeks ago that it would release its stockpiles to curb the surge.

On Feb. 14, the government said it would release up to 210,000 tons of its stockpiled rice, to be handed over to wholesalers in mid-March after it has been bid for and expected to hit store shelves between late March and early April.

The farm ministry expected the announcement alone would lead to lower prices before the release of the stockpiled rice. But there has been no such effect, an executive at a major rice wholesaler said.

Wholesale prices of Koshihikari brown rice from Niigata Prefecture, for example, was between 48,300 yen ($320) and 48,500 yen per 60 kilograms as of Feb. 26, little changed from a month earlier, according to rice market research firm Beikoku Databank.

"Once the results (of the bidding) are revealed, it will have an effect on lowering prices," an official at the research firm said.

The government is scheduled to release 150,000 tons of rice in the first stage, and could release an additional 60,000 tons if the need arises.

According to the consumer price data released last month, rice prices surged 27.7 percent in 2024 from the previous year, the largest increase since 1975. In December alone, prices soared 64.5 percent from a year earlier.

The spike in prices followed a poor harvest in the summer of 2023 due to a period of high temperatures that reduced the amount of rice available for distribution the following year. A sharp rise in the number of foreign tourists has also driven up rice consumption at restaurants.

The Japanese government has 910,000 tons of rice stockpiled, with the planned release equivalent to over 20 percent of the reserves.
 
 

Longtime Fuji Media Holdings Inc executive Hisashi Hieda stepped down Thursday from the company's management advisory panel as its broadcasting unit remains under fire for its handling of a sexual misconduct scandal involving former TV host Masahiro Nakai.

The shakeup of the panel, which advises Fuji Media's board on matters including top management selection, comes amid scrutiny of Hieda's enduring influence as Fuji Television Network Inc struggles with the scandal that has led sponsors to pull their commercials.

Hieda, 87, has also faced pressure to resign as executive managing adviser from a U.S. investment fund that holds shares in Fuji Media. The fund has accused him of being a "dictator" who has ruled over the giant broadcaster group for some 40 years.

The departure of Hieda from the management advisory panel was decided at regular board meetings by Fuji and Fuji TV on Thursday.

Fuji Media President Osamu Kanemitsu told reporters afterward that Hieda was absent from the meetings due to hospitalization for a lumbar compression fracture after a fall at home.

Last month, then Fuji TV Chairman Shuji Kano and President Koichi Minato resigned to take responsibility for the scandal that initially surfaced through weekly magazine reports in December.

Shukan Bunshun magazine has reported that Nakai, best known as a member of the now-defunct pop group SMAP, engaged in alleged nonconsensual sexual activity with a woman in June 2023, resulting in a 90 million yen out-of-court settlement.

Fuji TV has admitted it was aware of some "trouble" between the woman and Nakai, who regularly appeared on the network's programming, but it did not respond immediately, citing the woman's desire to keep the matter discreet and return to work.

While Fuji TV has vowed to revamp its management, some observers believe Hieda's continued presence could hinder meaningful reform.
 
 

Japan’s Nikkei share average ended at a five-month low on Friday, as chip-related stocks tracked Nvidia’s sharp overnight declines, with Advantest tanking nearly 9%.

The Nikkei index fell below 37,000 for the first time since September 19 and hit a low of 36,840.12 in intraday trade.

The index closed 2.88% lower at 37,155.5, its lowest close since September 19, in its biggest daily fall since September 30.
The broader Topix lost 1.98% to 2,682.09.

The S&P 500 and Nasdaq ended sharply lower overnight, weighed down by an 8.5% slump in chipmaker Nvidia after its quarterly report failed to rekindle Wall Street’s AI rally, while investors focused on data pointing to a cooling U.S. economy. 

Investors had some hope on chip-related shares after seeing Nvidia’s outlook in the previous session, but they dumped those today after seeing the market reaction to Nvidia, said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

Japanese chip-related stocks, key components of the index, showed mixed movements in the last session, as they awaited Nvidia’s performance on Wall Street. The Nikkei gained 0.3% on Thursday.

Overnight, Nvidia tumbled 8.5% after the Silicon Valley company gave a weaker-than-expected quarterly forecast for gross margin that overshadowed an upbeat revenue outlook.

In Japan, chip-testing equipment maker Advantest, a supplier to Nvidia, tanked 8.78% to drag Nikkei the most. Chip-making equipment maker Tokyo Electron slipped 4.45%.

Fujikura, which makes cables for data centers, slipped 7.32%, while its peer Furukawa Electric lost 5.9%.

Nikkei’s gains this year have been capped by worries about the impact of U.S. President Donald Trump’s tariff threats and concerns about the Bank of Japan’s interest rate policy.

Today, the market had another blow, said Suzuki.
But the losses of the Topix are smaller than the Nikkei’s. So the question is whether we see the Nikkei index or Japanese equities overall.

Convenience store operator Seven & I Holdings 3382. rose 1.23% to become one of the 20 stocks that rose on the Nikkei, after tanking 11.7% in the previous session.

Of the 225 components on the index, 203 stocks fell and two were flat.
 
 

Japan's ruling coalition submitted a modified fiscal 2025 government budget bill to the House of Representatives, the lower chamber of the Diet, the country's parliament, on Friday.

The revised bill includes some 110 billion yen in additional spending to make high school education free, a proposal the coalition has agreed on with opposition Nippon Ishin no Kai (Japan Innovation Party).

It was the first parliamentary revision to an initial government budget through consultations between ruling and opposition parties since the administration of then Prime Minister Ryutaro Hashimoto in 1996.

The ruling Liberal Democratic Party and its junior coalition partner, Komeito, also submitted to the Lower House Friday a modified tax reform bill featuring the raising of the minimum taxable income to 1.6 million yen from 1.03 million yen.

The ruling parties hope that the bills will clear the Lower House in the first half of next week.
 
 

Seven & i Holdings Co., the operator of the 7-Eleven convenience store chain, announced Thursday that the founding Ito family has told the company that it has been unable to secure funding for its proposed management buyout of the company.

MBOs are a method by which a company’s management acquires the company through purchasing shares.

Itochu Corp., which was considering investing up to ¥1 trillion, also officially announced Thursday that it had decided not to join the MBO scheme, saying, “We have completed our consideration into this plan.”
Itochu apparently has seen little scope for mutual benefit with convenience store chain FamilyMart, an Itochu subsidiary.

Seven & i in August said it had received a takeover bid from leading Canadian convenience store operator Alimentation Couche-Tard Inc. It had expressed its reluctance to accept the proposed acquisition.

Seven & i Vice President Junro Ito, a member of the founding family, and Ito-Kogyo Co., the family’s asset management company, had proposed the MBO of Seven & i to counter the Canadian firm’s takeover bid.

With the proposed acquisition was estimated to be worth a total of between ¥8 trillion to ¥9 trillion, the Ito family approached megabanks and U.S. investment funds in addition to Itochu for financing and investment.

However, their plan to secure the necessary financing fell through when they were unable to obtain the cooperation of Itochu, which had been a strong candidate for investment.

Seven & i announced it is continuing “to assess a full range of strategic alternatives, including the proposal from [Couche-Tard].”
However, Seven & i, which has shown a strong aversion to takeovers, apparently intends to increase its corporate value on its own.
 
 

Toyota Motor Corp announced plans to restructure its board on Tuesday in what it described as an attempt to bring in more diverse views and give a larger roles to auditors.

Among six appointments is Christopher Reynolds, now an executive in the automaker’s North American operations. As a lawyer, and son of a Ford worker, he brings experience in human resources and risk management, according to Toyota.

The number of women on the 10-person board will grow from one to two with the appointments of Kumi Fujisawa, an independent outsider and entrepreneur, and Hiromi Osada, previously a Toyota auditor. George Olcott, previously an auditor, will also join the board.

The number of outside members will rise from four to five.
Takanori Azuma, a Toyota Human Resources official, said the new board includes auditors for the first time.

The company's internal controls have come under scrutiny since it admitted to cheating on certification tests for seven vehicle models last year.

Azuma said the additions are designed to bring diverse views to its leadership as “weapons for survival” in a changing environment.

“It would be a mistake to assume that what we think up internally will be what our customers and people around the world can empathize with,” he said.

The maker of the Camry sedan and Lexus luxury models has been trying to transform itself into what it calls “a mobility company” as the auto industry undergoes drastic changes including the arrival of powerful relative newcomers like Tesla and BYD.

Chairman Akio Toyoda, from the company's founding family, and Chief Executive Koji Sato’s positions will remain unchanged.

The company will seek approval for the new board at a general shareholders’ meeting later this year.
 
 

Japan Post Holdings Co. plans to reduce its stake in Japan Post Bank to 50 pct or less soon from the current 61.5 pct, people familiar with the matter said Wednesday.

The stake sale, estimated to be valued at about 600 billion yen, based on the current stock price, is designed to make the bank's operations more flexible.
The parent company's board of directors is expected to formally decide on the sale as early as Thursday.

In its medium-term business plan released last year, the holding company said that it would reduce its stake in the financial unit to 50 pct or less by fiscal 2025, which ends in March next year.

Such sale will help ease regulations on Japan Post Bank under the postal service privatization law, enabling it to engage in new business without receiving prior approval from the government.
 
 
 

Japan's biggest airline ANA Holdings announced Tuesday it will purchase 77 new aircraft from Boeing, Airbus and Embraer to replenish its fleet in order to serve growing passenger demand domestically and internationally.

The order will be valued at a total of 2.1 trillion yen at catalogue prices before discounts, the company said, adding in a separate statement that 68 orders have been confirmed, with nine options for small and medium-size aircraft.

This mega-order is done "in anticipation of future growth in passenger demand, including strong inbound demand", it said.

"This will be achieved by renewing the fleet that was suspended due to the COVID-19 and placing additional orders for new aircraft."

From Boeing, the company will purchase 18 widebody 787-9 aircraft -- used for "international routes in anticipation of strong Asia-North America demand" -- and a dozen 737-8 jets.

ANA, or All Nippon Airways, will also be purchasing a total of 27 Airbus aircraft -- some of which would be used by Peach, a low-cost carrier owned by ANA.

For domestic routes, ANA will order 20 100-seat class Embraer E190-E2 aircraft, saying it was "the first time in Japan" for the Brazilian plane manufacturer.

"This order will be the catalyst for improving the profitability of domestic flights and the expansion of international flights which is an area of future growth of our airline business," said ANA Holdings president and CEO Koji Shibata in the statement. "We will fully utilize this opportunity in order to become an industry-leading airline with sustainable growth."

With this massive buy, the total number of aircraft in the group's fleet -- including those already ordered -- will be approximately 320 by the financial year 2030.

More than half would be the Boeing 787 series aircraft, ANA said.
Boeing said it was "honored" that ANA selected the 787 Dreamliner and 737 MAX to expand its fleet.

"This order is a testament to the market-leading capabilities of Boeing's wide-ranging family of airplanes. We look forward to working closely with ANA to finalize the agreement," the US aviation giant said in a statement.

A spokesperson for Airbus said: "We are pleased that ANA has decided to grow its fleet with a new order for 24 A321neo and three A321XLR aircraft. We look forward to finalizing the details."
 
 

Japan is considering tightening regulations on crypto asset transactions by classifying them as financial products akin to stocks, a government source said Tuesday.

The Financial Services Agency is seeking to tighten oversight of crypto asset issuers to protect users amid a rise in fraudulent investment solicitations and rapid market expansion in recent years, according to the source.

Prime Minister Shigeru Ishiba's administration and the ruling Liberal Democratic Party plan to outline the direction of the potential policy change by June, the source said. In Japan, crypto assets are currently regulated under the Payment Services Act.

The financial watchdog and industry groups said crypto asset trading accounts in Japan totaled 11.81 million as of the end of December. The balance of deposits has been rising, reaching around 4.5 trillion yen ($30.11 billion).

If crypto assets come under the Financial Instruments and Exchange Act, which covers securities such as stocks, issuers would be required to disclose detailed information on their corporate status, potentially enhancing user protection.
 
 

Monday marked three years since Russia began its aggression against Ukraine. With economic sanctions against Moscow, mainly by the Group of Seven countries, still in place, Japan’s trade with Russia has shrunk drastically. However, Russia still makes up nearly 10% of Japan’s natural gas imports.

With a ceasefire in sight, businesses involved in Ukraine’s reconstruction are gradually mobilizing. Meanwhile in Japan, the rising prices triggered by the start of the aggression show no sign of abating.

According to trade statistics for 2024 released by the Finance Ministry, exports to Russia were down 17% year-on-year to ¥327.6 billion, and imports were down 17% to ¥860.3 billion. Compared to 2021, before the aggression started, exports were down about 40% and imports about 60%.

Due to the trade embargo imposed by G7 and other countries, Japan’s exports of such items as semiconductor-related manufacturing equipment, electronic components and aircraft have reached zero.

New car exports to Russia, which peaked at about 450,000 in 2008, were zero in both 2023 and 2024. Major companies such as Toyota Motor Corp. have already withdrawn from operations in Russia.

On the other hand, exports of secondhand compact cars, which are exempt from export restrictions, increased. In 2024, about 200,000 such vehicles were exported to Russia, an increase of around a third from the about 150,000 in 2021.

It is possible that Japanese cars, which are popular in Russia, are also being traded via third countries, creating a loophole in the sanctions.

subhead: Increasing LNG imports from U.S.

Liquefied natural gas (LNG) remains Japan’s most valuable import from Russia by far at ¥548 billion. Seafood such as crab, cod and salmon also amounted to ¥130.2 billion.

Even before Russia invaded, Japan relied on the country for about 10% of its LNG imports.

The Sakhalin-2 project, in which Japanese companies have stakes, is exempt from the sanctions for the time being, allowing Moscow to continue exporting LNG to Japan from Russia’s Far East.

“With the short transport distance and stable production, the importance of the Sakhalin-2 project has not changed,” said a major trading company executive.

Imports from the United States, which is strengthening its LNG production, have been on the rise. In 2024, the U.S. provided 9.6% of Japan’s LNG import, overtaking Russia at 8.6%. At the recent Japan-U.S. summit meeting, the two countries agreed to expand imports of U.S.-produced LNG, making it likely that Japan’s reliance on Russia will decline.

The United States, Europe and other countries are continuing to impose a ban on Russian financial institutions using SWIFT (Society for Worldwide Interbank Financial Telecommunication), one of the world’s largest international payment networks, making it difficult for Moscow to settle trade.

According to European media, the European Union is expected to soon officially decide to impose additional sanctions on several banks in Russia.

However, Russia has been countering the sanctions by establishing an original payment network known as SPFS (Financial Messaging System of the Bank of Russia) and increasing trades with China and India.

According to Anatoly Aksakov, head of the State Duma Committee on Financial Markets, new settlements methods have been already developed.

“SWIFT is dying, it is already a backward technology,” Aksakov recently told Russia’s TASS news agency.
 
 

Japan's former top currency diplomat Masato Kanda assumed office on Monday as president of the Asian Development Bank, the Manila-based international lender said.

As its 11th president, Kanda vowed to advance the "ADB's mission to promote sustainable, inclusive, and resilient growth" and "respond to pressing development challenges." He succeeded Masatsugu Asakawa, another former senior official of Japan's Finance Ministry.

Japan, a leading shareholder in the ADB along with the United States, has supplied the bank's chief since the institution was established in 1966 to eradicate extreme poverty and support development in the Asia-Pacific region.

Kanda will serve the remaining term of Asakawa until Nov 23, 2026.
During his tenure as vice finance minister for international affairs, Kanda was behind massive market interventions by Japan aimed at stemming the yen's sharp decline against the U.S. dollar and other major currencies. He left the post in July after serving for three years.

He also served as a special adviser to the cabinet of then Japanese Prime Minister Fumio Kishida.
 
 

 

 

Japanese banks are now raising the interest rates on their savings accounts in an increasingly heated competition for business. Interest rates on one-year fixed-term deposits have crossed the 1% line one after another, and rates on ordinary deposits continue rising.

Nearly a year has passed since the Bank of Japan ended its negative interest rate policy, and “a world with interest rates” has begun to take root.
Thus, commercial banks’ battles to lure more savings account clients have been increasingly fierce.

The rate-raising race is being led mainly by internet-based banks.
“If we don’t raise interest rates, we’ll start bleeding deposits,” said Hidenori Tsunehisa, deputy president of Tokyo Kiraboshi Financial Group Inc. He made the remark at a press conference to announce business results on Jan. 31.

UI Bank, a company under the Tokyo Kiraboshi umbrella that specializes in internet banking services, raised its savings interest rate for one-year fixed-term deposits from 0.55% to 1.0% on Jan. 24.

If a person opens a new savings account with UI Bank, the rate further rises to 1.1% for a limited term.

ORIX Bank Corp. has also raised interest rates for its internet-exclusive e-Direct banking service. Those who open new accounts with the service will now receive interest of 1.0% on one-year fixed-term deposits.
Some local banks are enthusiastically making similar moves.

Until the end of March, the Bank of Yokohama is running a campaign in which it will offer interest rates of 1.0% on one-year fixed-term deposits. This high rate is available to people who newly transfer or deposit at least ¥3 million into accounts with the bank.

By contrast, megabanks set their interest rates for one-year fixed-term deposits at 0.125%. It seems that these megabanks, rather than making any snap decisions, have kept their fixed-term deposit rates low because they already have enough money to lend and their earning power is high.

Internet-based banks do not have to pay the costs of maintaining large-scale networks of brick-and-mortar locations. By presenting much higher interest rates than those of megabanks, internet-based banks aim to lure clients to deposit money with them.

In March last year, the Bank of Japan made the bold decision to discontinue its negative interest rate policy and raise interest rates for the first time in 17 years.

They decided to raise rates again in July last year and January this year. The Bank of Japan’s current policy rate is around 0.5%.

Private-sector financial institutions’ short-term interest rates are tied to the policy rate.

Interest rates on fixed-term deposits differ depending on term length. But a comprehensive judgment, taking into account the upward trend of short-term interest rates, indicates that interest rates on one-year fixed-term deposits are becoming the main battlefield in the competition for depositors.

To that extent, potential profit margins on loaned money can be said to be improving.

At a meeting of the House of Representatives Budget Committee on Jan. 31, Bank of Japan Gov. Kazuo Ueda said, “If [the Bank of Japan’s] forecasts about the economy and price levels come true, I will continue raising the policy rate.”

As long as the Bank of Japan continues raising the rate, it is very likely that private financial institutions will also continue competing to raise their own interest rates.

However, there is a large gap in earning power between major banks, which make money from lending and investments, and other institutions such as internet-based banks.

Hiroyuki Kubota, a financial analyst, offered the view that “This competition will probably eventually become just a test of strength.”
 
 

Seven & i Holdings Co is expected to make U.S. private equity firm Bain Capital the preferred buyer for its intermediate subsidiary operating Ito-Yokado supermarket chain, a source familiar with the matter said Saturday.

The Japanese retail giant is aiming to shed its noncore operations and focus on its 7-Eleven convenience stores business, as it tries to fend off a takeover bid from Canadian convenience store operator Alimentation Couche-Tard Inc.

Seven & i is aiming to reach a final agreement with the private equity firm in March. The two other potential buyers competing for the sale of the intermediate subsidiary York Holdings Co, are Kohlberg Kravis Roberts & Co and Japan Industrial Partners, Inc.

Bain Capital is reported to have made an acquisition proposal based on a valuation of over 700 billion yen for the subsidiary, which operates 31 retailers including the Ito-Yokado business.

Seven & i has said it plans to sell a majority stake in the subsidiary by February 2026, turning it into an equity-method affiliate.

Ito-Yokado has recorded consistent losses in recent years, leading to widespread store closures and a reduced presence across the country as it faces competition from online retailers and discount stores.

York Holdings also operates the Denny's casual restaurants brand in Japan, the Loft outlet chain and children's clothing chain Akachan Honpo Co.
 

 

Prices of vegetables and rice have been soaring in Japan due to unfavorable weather and rising production costs.

Prices of fresh vegetables in January climbed 36% year on year, with prices of cabbage and Chinese cabbage shooting up about three and two times, respectively, according consumer price data released by the internal affairs ministry Friday.

Rice prices rose 70.9%, with the pace of increase marking a record high for the fourth straight month.

For prepared food, there have been moves to pass higher production costs on to retail prices, putting pressure on households.

The recent lack of rain is a factor behind the surge in vegetable prices, according to the ministry and other sources.

The pace of rise for Chinese cabbage accelerated from December’s 55.7%, partly reflecting a surge in demand as a substitute for cabbage, whose prices remain elevated.

Rice prices have been on an uptrend since last summer, when they soared amid supply shortages.

The higher rice prices have led to markups of related products, with prices in January rising 9.2% for “onigiri” rice balls and 4.5% for sushi served at restaurants.

Earlier this month, the government decided to release part of rice stockpiled by the state to ease the distribution bottlenecks, a factor contributing to the spike in the prices of the staple food.

Koya Miyamae of SMBC Nikko Securities Inc. predicted that the rate of rice price growth will remain high as moves to pass on higher production costs continue.

Prices of food excluding fresh food in the first half of this year are expected to rise over 5% from a year before, pushed up by spikes in the prices of rice-based products, according to Miyamae.