In response to the rising price of rice, retailers, restaurant chains and food-product manufacturers are taking steps to deal with the situation.

They are trying to absorb the costs by increasing the prices of onigiri rice balls, boxed lunches and processed rice products, as well as by ending the service of offering extra portions of rice for free.



Strategy review

Seven-Eleven Japan Co. announced on Monday that it will raise the prices of some of its boxed lunches and onigiri rice balls in phases starting from Jan. 27. The company will raise the price of rice balls by up to ¥28, including “Shiomusubi,” whose price will be raised from ¥108 (excluding tax) to ¥128. The price of boxed lunches will be raised by up to ¥60.

As customers have been shying away from stores due to higher prices, Seven-Eleven has made efforts since September to recover patrons by lowering the prices of some products, including fried rice.

However, the company was forced to review its strategy in less than six months because rice prices are expected to continue going up for an extended period of time.

Seiyu Co. began selling rice produced in Taiwan in November. It is rare for a major supermarket to sell rice produced overseas. However, the Taiwan rice is popular because it is cheaper than equivalent domestic rice but tastes almost the same, according to the supermarket.



End of free service for extra rice

Unlike retailers, rising rice prices did not immediately impact food product manufacturers and restaurant chains because they usually conclude long-term contracts for rice purchases. However, some companies have decided to raise the prices of their products as there is no sign that rice prices will decline.

Nissin Food Products Co. will raise the prices of products in the “Nissin Curry Meshi” series and other instant cup rice products by about 11% beginning with its shipments in April. Nichirei Foods Inc. will raise the prices of fried rice and other frozen foods by 10% to 30% starting in February.

In September, Skylark Holdings Co. raised the price of rice at its Gusto, Jonathan’s and other restaurants under its wing by ¥30 to ¥55. Denny’s, a subsidiary of Seven & i Holdings Co., raised the price of rice in December and ended its free service of offering extra rice during breakfast and lunch hours.


Wholesale prices increased 1.6 times

Rice became in short supply due to the low quality of the 2023 rice crop. The additional hoarding demand in preparation for a disaster further negatively affected stocks of rice.

Rice prices soared because retailers were buying all the rice they could. Prices remain high even after the rice produced in 2024 became available in stores.

According to the Agriculture, Forestry and Fisheries Ministry, the average wholesale price per 60 kilograms of all varieties of rice produced in 2024 was ¥24,665 in December, 60% higher than the same month in the previous year.

Some in the restaurant industry believe there may be a move to switch to less expensive rice produced overseas, as one executive of a major restaurant chain said.
 
 

 

 

Department store sales in Japan in 2024 totaled 5.75 trillion yen, surpassing the pre-coronavirus pandemic levels of 2019 amid inbound tourism boom, data by an industry body showed Friday.

Sales on a same-store basis increased 6.8 percent from 2023, marking the fourth consecutive year of growth. Duty-free sales surged 85.9 percent to 648.7 billion yen, hitting a record high for the second straight year, according to the Japan Department Stores Association.

Department stores saw the return of customers come into full swing toward the end of 2023 after the government downgraded the legal status of COVID-19 to the same category as seasonal influenza. The number of foreign visitors to Japan also sharply rose the following year.

An association official attributed the "return of travelers from mainland China" as a major factor that pushed up sales.

Helped by a weak yen, luxury brands and jewelry sold well among duty-free items in 2024. Japanese traditional crafts were also popular.

Demand was also strong from Japan's wealthy population, with sales of clothing exceeding food for the first time in five years, the association said.

In Japan's 10 major cities, including Tokyo and Osaka, department store sales grew 9.1 percent in 2024 from a year earlier.

Stores in other cities, however, dropped 0.5 percent amid a scale-down of sales space in stores as part of structural reform efforts, even though they have also benefited from the increasing number of foreign tourists.

In December alone, department store sales on a same-store basis gained 2.8 percent from a year before, up for the second straight month as demand for winter clothing increased due to a drop in temperature.
 
 

The Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis, underscoring its confidence that rising wages will keep inflation stable around its 2% target.

The decision marks its first rate hike since July last year and comes days after the inauguration of US President Donald Trump, who is likely to keep global policymakers vigilant ahead of potential repercussions from threatened higher tariffs.

At its two-day meeting concluding on Friday, the BOJ raised its short-term policy rate from 0.25% to 0.5%, a level Japan has not seen in 17 years. It was made in a 8 to 1 vote with board member Toyoaki Nakamura dissenting.

The widely expected move underscores the central bank’s resolve to steadily push up interest rates to around 1%, a level analysts see as neither cooling nor overheating Japan’s economy.

“The likelihood of achieving the BOJ’s outlook has been rising,” with many firms saying they will continue to raise wages steadily in this year’s annual wage negotiations, the central bank said in a statement announcing the decision.

“Underlying inflation is heightening towards the BOJ’s 2% target,” the central bank said, adding that financial markets remain stable as a whole.

The BOJ made no change to its guidance on future policy, saying that it will continue to raise interest rates if its economic and price forecasts are realized. But it removed a phrase stressing the need to scrutinize risks surrounding overseas economies and markets.

“Their logic remains the same. They are still far away from neutral, so it’s natural to make an adjustment,” said Naka Matsuzawa, chief macro strategist at Nomura Securities in Tokyo.

“Unless the BOJ either changes the logic of rate hikes, or even raises the neutral point, which they have been mulling – about 1% – there’s not going to much room for the market to price in further hikes in the future.”

The yen rose around 0.5% to 155.32 per dollar after the decision, while the two-year Japanese government bond (JGB) yield rose to 0.705%, the highest since October 2008.

Attention now shifts to any clues from BOJ Governor Kazuo Ueda in his post-meeting briefing at 0630 GMT on the pace and timing of further increases.



Inflation risks

In a quarterly outlook report, the board raised its price forecasts to project core inflation moving at or above its 2% target for three straight years.
It also said risks to the inflation outlook were skewed to the upside amid intensifying labor shortages, rising prices of rice and the boost to import costs from a weak yen.

“With regards to this year’s annual wage negotiations, there have been many views expressed by firms that they will continue to raise wages steadily,” the report said.

The head of Japan’s union umbrella group told Reuters on Friday that Japanese annual pay increases must exceed the 5.1% secured last year as real wages continue to fall.

The board now projects core consumer inflation to hit 2.4% in fiscal 2025 before slowing to 2.0% in 2026. In the previous projection made in October, it expected inflation to hit 1.9% in both fiscal 2025 and 2026.

It made no change to its forecasts that Japan’s economy will grow 1.1% in fiscal 2025 and 1.0% in 2026.

While the US economy has been solid and financial markets stable as a whole, the BOJ must be vigilant to uncertainties surrounding US policy conduct, the report said.

“The hike may have been expected but in what feels like the first time in a very long time, there were no major downgrades to their economic outlook,” said Matt Simpson, senior market analyst at City Index in Brisbane. “This keeps the door open to another 25 (basis points) hike by the year-end, and rates to sit at a whopping 0.75%.”

Japan’s core consumer inflation accelerated to 3.0% in December, the fastest annual pace in 16 months, data showed earlier on Friday, in a sign rising fuel and food prices continue to push up living costs for households.

After taking the helm in April 2023, Ueda dismantled his predecessor’s radical stimulus program in March last year and pushed up short-term interest rates to 0.25% in July.

BOJ policymakers have repeatedly said the central bank will keep raising rates, if Japan makes progress in achieving a cycle in which rising inflation boosts wages and lifts consumption, thereby allowing firms to continue passing on higher costs.
 
 

To commemorate the 55th anniversary of the tomica miniature car, Tomy Co. announced on Tuesday that it would release products for adults in cooperation with five automobile manufacturers including Toyota Motor Corp. and Nissan Motor Co.

The models will be specially designed by automobile designers from each company. In addition to Toyota and Nissan, Honda Motor Co., Mitsubishi Motors Corp., and Suzuki Motor Corp. are cooperating to launch the products sequentially starting this spring.

The Drift Turn Stage, which use water vapor to create white smoke to make the car look as if it is drifting, will also go on sale. The Drift Turn Stage lineup includes the “Initial D” manga and the “Fast and Furious” movie. Mini garages to display the collected cars will also be on sale.

Launched in 1970, tomica is a long-selling product that has been enjoyed by three generations. The total number of tomica cars sold has exceeded 1 billion units, and more than 10,000 models have been introduced.

“We will promote the appeal of tomica overseas as well as expand the adult fan base,” said Shunsuke Takeuchi, a Tomy executive officer on Tuesday.
 
 

Japan saw record-high exports last year, as its annual trade deficit declined 44% from the previous year, the Finance Ministry reported Thursday.

The trade deficit, which measures the value of exports minus imports, totaled 5.3 trillion yen, according to government data, as imports ballooned on the back of rising energy costs and growing inflation around the world.

Exports from the world’s third-largest economy totaled 107.9 trillion yen, surpassing the 100 trillion yen mark for the second-straight year, and the biggest value on record for comparable data, which dates back to 1979, the ministry said.

Some companies may have sped up their exports in anticipation of potential tariffs by U.S. President Donald Trump.

Trump has said he expects to put 25% tariffs on Canada and Mexico starting Feb 1. During his campaign, he threatened to impose tariffs on imports from China, although details on that remain unclear.

For the month of December, exports gained a greater-than-expected 2.8% on-year, while imports rose 1.8%. Exports grew to Asian and European nations, while dipping slightly to the U.S.

Imports grew most from India, Hong Kong and Iran.
Demand was especially strong for Japan's vehicles, semiconductors and other machinery.

The weakening yen, another recent trend, has the effect of inflating the value of imports. The U.S. dollar has been hovering at 150-yen levels, sometimes surpassing 160 yen, over the past year, while a year ago it was often at 140-yen levels.

Japan has recorded a trade deficit for four straight years, but last year's deficit was considerably smaller than the 9.5 trillion yen deficit for 2023.
 
 

Sales from seven major Japanese convenience store chains hit a record high of 11.8 trillion yen in 2024, bolstered by inbound tourism and demand for readily consumable snacks and drinks, data by a Japanese franchising authority showed Monday.

The sales were up 1.2 percent from the previous year, marking a third consecutive year of record highs. The number of stores in the country stood at 55,736 as of December, inching up 23 from a year ago, according to the report by the Japan Franchise Association.

Although the number of store visitors in 2024 increased by 1.2 percent to 16.4 billion people, customers felt the pinch of rising prices, and the average amount spent in a single convenience store run was 720.2 yen, down 0.05 percent from the previous year, the data showed.

Hot weather boosted soft drink sales while over-the-counter foods such as onigiri rice balls and fried snacks also saw a rise in sales.

"The increase in visitors from overseas was a factor that lifted sales," an association official said.

Monthly sales for December were down 1.2 percent from a year earlier to around 1 trillion yen. It marked the first decline in 13 months.

However, the number of customers increased year-on-year by 0.8 percent to 1.3 billion, rising for the third consecutive month.
 
 

Fuji Television Network, Inc. is considering establishing a third-party committee based on the guidelines of the Japan Federation of Bar Associations to investigate the facts regarding a scandal involving television personality Masahiro Nakai, 52, and a woman, according to sources. The TV broadcaster will hold an extraordinary meeting of its board of directors on Thursday.

The company had announced at a press conference on Friday that it would establish an investigation committee led by a third-party lawyer, but there were growing calls for the establishment of a third-party committee with greater independence.

“I hope that the investigation will proceed as soon as possible in a manner that ensures independence, and that efforts will be made to restore trust,” Internal Affairs and Communications Minister Seiichiro Murakami said at a press conference held after a Cabinet meeting on Tuesday.

The company’s news program “Live News it!” reported on Tuesday that the number of companies that had suspended commercials on Fuji TV had risen to 75 as of Monday.

The number of advertisements replaced by public announcements from the Advertising Council Japan, a public interest incorporated association, is said to be more than 350.

 

Lack of explanation spurs criticism

Companies started pulling their advertisement from Fuji TV one after another in the wake of the broadcaster’s Friday press conference. It is unusual to see a string of companies suspending their ads due to their distrust of the TV station itself, rather than of particular programs or performers. Even some Fuji employees questioned their company’s response to the case.

According to weekly magazine reports, there was an incident in June 2023 when a woman was subjected to unwanted behavior after a dinner meeting at Nakai’s home.

Later, a settlement was reached in which Nakai would pay a large sum of money to settle the matter. In response to the news reports, Nakai released an “apology” comment on Jan. 9, admitting that there had been trouble.

The report claimed that an executive of the company was involved in organizing the dinner party, but the company denied this. Koichi Minato, president of the company, did not disclose at Friday’s press conference whether or not the woman was a Fuji TV employee.

Minato indicated that an investigative committee led by a third-party lawyer would be formed to look into the matter, but he declined to provide factual details on the case.

The suspension of airing commercials spread after the press conference.
According to the company’s press release, 75 companies have suspended the airing of their commercials.

Some of the companies have stated that this was a “comprehensive decision,” but some have expressed dissatisfaction with Fuji TV’s lack of explanation. The Japan Racing Association (JRA), whose horse races are broadcast by the company, has also suspended its commercials from Monday.

“This is not a matter of an individual employee. There are compliance concerns for the entire company. The company’s announcement so far is not enough to explain the whole picture of the matter,” a spokesperson for a major financial institution said, asserting that Minato’s explanation was not sufficient.
 
 

The Japan Business Federation, or Keidanren, and the Japanese Trade Union Confederation, or Rengo, held a meeting of their leaders Wednesday, effectively starting this year's "shunto" spring wage talks.

Keidanren Chairman Masakazu Tokura and Rengo President Tomoko Yoshino agreed that it is a crucial moment to realize a cycle of economic growth through price hikes and wage increases.

 

The focus of this year's labor-management negotiations is whether the momentum for wage increase will be maintained for stable structural growth after the labor side won the largest pay hike in 33 years in last year's shunto.

At the beginning of the meeting, Tokura said, "It is the social responsibility of our companies to form a substantial middle class through wage hikes and lead the Japanese economy to a virtuous cycle of growth and distribution."

 

"We hope to share our awareness and direction and cooperate with Rengo," he added.
 
 

Many major Japanese companies said Monday they are suspending commercials on Fuji Television Network Inc, as the broadcaster faces scrutiny over its alleged involvement in a misconduct scandal involving Masahiro Nakai, a male member of the now-defunct popular idol group SMAP.

Nissan Motor Co, Toyota Motor Corp, Japan's largest carmaker, cosmetics maker Kao Corp, Lawson, Seven & i Holdings Co, McDonald's Japan and job-matching app Timee have distanced themselves from Fuji TV, which announced Friday that it is launching a probe amid allegations that an employee played a role in the incident between Nakai and a woman.

"We are currently replacing commercials to the extent possible. As for the future, we will decide by closely watching the situation," Nissan said, after switching its commercials on several programs, including "Sazae-san," Japan's longest-running animated TV series.

Kao said it has made the decision by taking into consideration its policy on human rights. Going forward, the firm said it "will make a comprehensive judgment" based on the results of Fuji TV's investigation and other announcements.

Seven & i said the suspended commercials include those for its 7-Eleven convenience stores, which were aired during Fuji TV programs such as the anime series "One Piece."

With the number of companies pulling their commercials increasing, Fuji TV said later in the day, "We apologize for the inconvenience caused to many advertisers and advertising agencies. We will refrain from disclosing details of our sales operations."

Tokyo Broadcasting System Television Inc also said Monday it has decided to end a program featuring Nakai and replace him with another host in a different show, citing a "comprehensive assessment of the situation" after discussions with both parties involved.

The Tokyo-based broadcaster, known as TBS, added it has begun to carry out an internal investigation to determine whether similar suspected incidents have been committed by its employees, although it has "not been aware of any issues so far."

According to a weekly magazine in December, what was initially planned as a meal in June 2023 with Fuji TV employees ended up with only Nakai and the woman present, leading to nonconsensual sexual activity and a 90 million yen out-of-court settlement.

The TV broadcaster denied involvement in the incident, saying that one of the employees, who reports said set up the meal, neither arranged nor was aware of it.
 
 

The Bank of Japan is expected to raise interest rates on Friday barring any market shocks when U.S. President-elect Donald Trump takes office, a move that would lift short-term borrowing costs to levels unseen since the 2008 global financial crisis.

A tightening in policy would underscore the central bank's resolve to steadily push up interest rates, now at 0.25%, to near 1% - a level analysts see as neither cooling nor overheating Japan's economy.

At the two-day meeting ending on Friday, the BOJ is likely to raise its short-term policy rate to 0.5% unless Trump's inaugural speech and executive orders upend financial markets, sources have told Reuters.

In a quarterly outlook report, the board is also expected to raise its price forecasts on growing prospects that broadening wage gains will keep Japan on track to sustainably hit the bank's 2% inflation target.

A hike by the BOJ would be the first since July last year when the move, coupled with weak U.S. jobs data, shocked traders and triggered a rout in global markets in early August.

Keen to avoid a recurrence, the BOJ has carefully prepared markets with clear signals by Governor Kazuo Ueda and his deputy last week that a rate hike was on the cards. The remarks caused the yen to rebound as markets priced in a roughly 80% chance of a rate increase on Friday.

There were also hints of near-term action last month. While the BOJ held off raising rates at the Dec. 18-19 meeting, hawkish board member Naoki Tamura proposed pushing up rates. Some of his colleagues also saw conditions fall into place for an imminent rate hike, minutes of the meeting showed.

With a policy tightening this week seen as a near certainty, market attention is shifting to Ueda's post-meeting briefing for clues on the timing and pace of subsequent increases.

As inflation has exceeded the BOJ's 2% target for nearly three years and the weak yen has kept import costs elevated, Ueda is likely to stress policymakers' resolve to continue raising interest rates.

But there is good reason to tread cautiously. While the International Monetary Fund raised its forecast for global growth in 2025, Trump's policies risk destabilising markets and stoking uncertainty about the outlook for Japan's export-reliant economy.

Domestic political uncertainty could heighten, too, as Prime Minister Shigeru Ishiba's minority coalition may struggle to pass budget through parliament and win an upper house election scheduled in July.

The economic damage caused by past ill-fated rate hikes also haunt BOJ policymakers. The BOJ ended quantitative easing in 2006 and pushed short-term rates to 0.5% in 2007, moves that triggered a storm of political criticism as delaying an end to deflation.

The BOJ cut rates from 0.5% to 0.3% in October 2008, then to 0.1% in December of that year, as the global financial crisis pushed Japan into recession. Since then, various unconventional steps have kept borrowing costs stuck near zero.

"Japan had a permanently low growth rate, inflation rate and lower level of interest rates. So policymakers, investors and the business community still ask - have we really broken free from that?," said Jeffrey Young, chief executive officer of DeepMacro.

"The BOJ is going to have to explain very carefully that they're raising rates to move away from the extraordinary policy that they adopted."
 
 

Suzuki Motor Corp. plans to expand exports of its passenger cars from India to Japan, Europe, Southeast Asia and other regions, President Toshihiro Suzuki has said.

“We will take advantage of the economies of scale in India and use this country as an export base,” Suzuki said at a press conference in New Delhi on Thursday.

Suzuki began manufacturing in India in 1983 when Toshihiro’s father, Osamu Suzuki, who died last month, was president.

Suzuki has a 40% share of the Indian market. The carmaker, which has three plants in India, plans to increase its annual production capacity from about 2.35 million units to about 4 million units by fiscal 2030 by building a new plant.

“We want to earn foreign currency through exports and cooperate in India’s development,” he said at the press conference held before the opening of an auto show in New Delhi on Friday.
 
 

Toyota Motor Corp is considering shifting some production at its central Japan home ground to other areas in a realignment aimed at addressing a labor shortage and natural disaster risks, sources familiar with the matter said.

One of the reorganization plans under consideration is to increase its production capacity in the Tohoku and Kyushu regions, located in the country's northeast and southwest, respectively, by 200,000 units each by around the early 2030s while cutting its output in the Tokai region, where it is headquartered, the sources said.

After the revamp, the automaker would be able to build 600,000 units each in Tohoku and Kyushu, while production in Tokai would be brought down from the current 2.2 million units, with its total output capacity in Japan left unchanged at around 3 million cars.

The plan is subject to changes depending on market conditions and may not materialize, the sources said. Toyota currently operates 14 auto factories in Japan.

The consideration comes as a government panel estimates there is an approximately 80 percent chance that a megaquake with a magnitude 8 to 9 will occur in the Nankai Trough -- an ocean-floor trench along the country's Pacific coast where the Eurasian and Philippine Sea tectonic plates meet -- within the next 30 years, with areas such as central Japan expected to suffer significant damage.

In addition, a severe labor shortage in the Tokai region is making it difficult for the automaker to secure enough workers. The diversification of production will address such problems, the sources said.

The Tokai region will remain its core hub for domestic production, and the company is also considering utilizing the space made available through the output transfer for the development of electric vehicles and software, they said.
 
 

 

World Bank Deputy Chief Economist Ayhan Kose has said that the Japanese economy is expected to "deliver healthy growth" over the next two years driven by increased consumption backed by rising wages.

He also indicated that there is room for the Bank of Japan to raise interest rates.

In its economic forecast released Thursday, the World Bank predicted Japan's gross domestic product will grow a real 1.2 pct in 2025 and 0.9 pct in 2026.

In an interview with Jiji Press, Kose pointed out that "when wage growth surpasses inflation in real terms, obviously, the income earners are going to be in a better position to spend." That could in turn lead to "better growth outcomes," Kose also said.
 
 
 

A leading Japanese sauce maker has established a base in Paris in anticipation of an overseas boom in kona-mon flour-based dishes.

Hiroshima-based Otafuku Sauce Co. set up the office following the rise in popularity of Japanese foods such as sushi and tempura. The Paris office is the company’s second overseas branch following Taipei.

Otafuku sent Keisuke Asakura, from its overseas sales department, to Paris in June last year. Another employee joined the office in December to help sales activities.

As part of efforts to promote flour-based okonomiyaki savory pancakes as a homemade dish, the company cooks and serves the dish at events in the United Kingdom, Italy, Belgium and elsewhere.

In addition, food samples and cooking classes are provided at local supermarkets. The dish’s complex flavors, with the umami of vegetables, are attracting consumers.

“Customers seem to like the taste,” said Asakura. “The challenge now is to raise awareness of Japan’s kona-mon culture.”

The company’s flagship okonomiyaki sauce has been exported to Europe along with other products. By establishing a base in Paris, known as the food capital of France, Otafuku wants to promote the kona-mon culture and boost sales.

The company has set a sales target of ¥1 billion for the fiscal year ending September 2027, more than double the figure for the same period in 2023.

As of June last year, there were 34 okonomiyaki restaurants and 10 other restaurants that serve takoyaki, another popular flour dish, in Europe. Out of these, 10 opened in the last three years.
 
 

Major shipping companies in Japan are boosting their cruise liner operations to meet globally growing demand for trips on luxury ships after the COVID-19 pandemic.

"This is a good opportunity," said Tsunemichi Mukai, president of MOL Cruises Ltd., the cruise ship operating arm of Mitsui O.S.K. Lines Ltd. "The Japanese cruise industry will be energized."

 

In December, MOL Cruises put a new luxury liner into service for the first time in 34 years.

The 458-passenger Mitsui Ocean Fuji features all-suite cabins, four restaurants, swimming pools and bars, as well as entertainment facilities such as a live performance stage and casino and card game rooms.

 

The company plans to offer cruise tours using the vessel to South Korea's Busan and places in Japan during the spring holiday season at prices starting from 925,000 yen per person.

This summer, NYK Cruises Co. will begin operating a new cruise liner also for the first time in 34 years.
 
 

U.S. officials late Wednesday announced a $1.6 billion deal with Toyota subsidiary Hino Motors to settle charges it deceived regulators about the amount of emissions spewed by its diesel engines.

Hino used altered emissions test data to get approval to import and sell more than 110,000 diesel engines to the U.S., most of which were installed in heavy-duty trucks made by Hino, according to the U.S. Environmental Protection Agency (EPA).

As part of the deal, Hino will plead guilty to engaging in a criminal conspiracy to mislead regulators and consumers, violating environmental protection laws and endangering public health, U.S. Attorney General Merrick Garland said in a release.

U.S. regulators and the state of California, which has strict vehicle emission standards, worked out criminal and civil remedies with Hino valued at more than $1.6 billion.

"Hino's actions directly undermined EPA's program to protect the public from air pollution," acting EPA administrator Jane Nishida said in a release.
The proposed settlement is contingent on approval from a U.S. district court judge in the state of Michigan.

"Corporate crimes such as these endanger the health and well-being of innocent Americans, as well as the environment in which we all live," said U.S. attorney for the Eastern District of Michigan Dawn Ison.

The deal includes a five-year term of probation during which Hino will be barred from importing diesel engines it has manufactured into the United States and implement a comprehensive compliance and ethics program, according to the EPA.

Hino will also have to recall some trucks with engines violating emissions standards and spend some $155 million to replace marine and locomotive engines through the U.S. to offset excess air emissions, according to the EPA.
 
 

The bid by Nippon Steel to buy U.S. Steel may have a new lease on life, even as the potential for a new bid for the storied Pittsburgh steelmaker began to emerge Monday.

Lourenco Goncalves, the CEO of Ohio-based steelmaker Cleveland Cliffs, said in a news conference Monday that he wanted to make a new bid for U.S. Steel, which accepted the buyout offer from Nippon in 2023 after it rejected an offer by Cleveland-Cliffs.

Goncalves declined to give financial details about the bid, but said in a news conference at a Cleveland-Cliffs plant in western Pennsylvania that it is an “all-American solution" to save U.S. Steel. He said he would relocate Cleveland-Cliffs' headquarters to Pittsburgh, keep the U.S. Steel name and make Cleveland-Cliffs part of U.S. Steel.

Over the weekend, the Biden administration extended a deadline for the Japanese steelmaker to abandon plans to acquire U.S. Steel after President Joe Biden blocked the deal.

The new deadline, now in mid-June, was viewed by U.S. Steel — and investors, apparently — as an opportunity for the companies to complete the acquisition, even though President-elect Donald Trump, who takes office in a week, also opposes the deal.

Biden nixed the acquisition this month citing a potential threat to national security, though the U.S. Committee on Foreign Investment in the United States, known as CFIUS, failed to reach a consensus on the security issue.

“We are pleased that CFIUS has granted an extension to June 18, 2025 of the requirement in President Biden’s Executive Order that the parties permanently abandon the transaction," U.S. Steel said in a statement Sunday.

"We look forward to completing the transaction, which secures the best future for the American steel industry and all our stakeholders.”
Shares of U.S. Steel rose 6% in trading Monday.

The proposed deal kicked up an election year political maelstrom across America’s industrial heartland and quickly drew vows by Biden and Trump from the campaign trail in a critical battleground state to block the deal.

Even after the election, Trump wrote on social media in December that he is “totally against” U.S. Steel being bought by a foreign company and said he would block the deal as president. He reiterated that stance this month after it was blocked by Biden.

However, a CFIUS composed of Trump appointees and Trump himself may be free to allow the deal to go through, or negotiate new terms.

Dennis Unkovic, a Pittsburgh lawyer who works on international business transactions, including deals in which CFIUS approval was required, said a new CFIUS and a new president are not legally bound by Biden’s decision.

CFIUS giving the parties an extra six months to unwind the deal is unusual, Unkovic said. It wasn't immediately clear why CFIUS extended the deadline, but Unkovic pointed to reports that Biden's CFIUS was divided over whether it was a security threat.

“Extending this from the 30 days to the 180 days was a sign that there were people in the Biden administration that would like somebody to take a second look at this,” Unkovic said.

CFIUS' job is to see if there are workarounds or modifications to a deal to allow it to go through, and rarely is a deal turned down, Unkovic said. After CFIUS takes another look at it, it could still be up to Trump to decide.
“Now how he comes down on it, who knows?” Unkovic said.

Nippon Steel and U.S. Steel have insisted that the deal presents no national security problem for the U.S., said Biden's decision to block it was a violation of legal due process and a political calculation.

The two steel companies sued in federal court three days after Biden announcement and accused the head of the Steelworkers union, Cleveland-Cliffs and Goncalves of working together to scuttle the buyout in a separate lawsuit.

The United Steelworkers have opposed the Nippon Steel deal, concerned over whether the company would honor existing labor agreements or slash jobs, and questioned Nippon Steel's status as an honest broker for U.S. national trade interests.

However, some union members have come out in favor of the deal. Nippon Steel — the world's fourth-largest steelmaker — says its ability to invest in U.S. Steel's aging blast furnace plants in Pennsylvania and Indiana will boost the ability of the U.S. to compete in an industry dominated by China.

U.S. Steel has warned that, without Nippon Steel’s cash, it will shift production away from the blast furnaces to cheaper non-union electric arc furnaces and move its headquarters out of Pittsburgh.

Goncalves said U.S. Steel and Nippon Steel abandoning their blocked deal is critical to his company's ability to mount a new bid and, until that happens, he can't make a bid.

“If I present an offer today, they can’t take it," Goncalves said. "So the very first thing that needs to happen, the merger agreement needs to be abandoned.”

He also suggested that Trump's CFIUS could move the deadline to abandon the Nippon-U.S. Steel deal back to the original deadline set by Biden of Feb 3.
 
 

An executive of Japan's ruling Liberal Democratic Party on Tuesday urged China to abolish its import restrictions on Japanese fishery products.

Hiroshi Moriyama, secretary-general of the LDP, also requested Beijing to secure the safety of Japanese nationals in China.

Moriyama made the requests at the first dialogue meeting between Japanese and Chinese ruling parties in six years and three months, which took place in Beijing.

Japanese participants included Makoto Nishida, secretary-general of Komeito, the LDP's junior coalition partner. From China, Liu Jianchao, head of the International Department of the Communist Party of China's Central Committee, attended the meeting.

In his keynote speech, Moriyama said, "I strongly hope that China will lift import restrictions on Japanese food products including fishery products." He also called on China to resume or expand imports of beef and polished rice from Japan.
 
 

U.S. authorities extended a deadline imposed on Nippon Steel Corp and U.S. Steel Corp to abandon their merger plan to June 18, the companies said Sunday, a move that came as they fight to advance the deal in courts.

U.S. President Joe Biden issued an order on Jan 3 to block the $14.1 billion takeover of U.S. Steel by the Japanese company on national security grounds and urged the companies to take all steps necessary to "fully and permanently" abandon the deal within 30 days.

However, the order also stated the period can be extended by the Committee on Foreign Investment in the United States, a panel of U.S. federal agencies involved in screening the proposal.

The extension of the Feb 2 deadline was granted by CFIUS at the request of Nippon Steel.

Reacting to Biden's order, Japan's biggest steelmaker and U.S. Steel, the third-largest U.S. producer, have filed two federal lawsuits in the United States seeking to protect their merger plan from what they called "illegal and improper political and anticompetitive interference."

One of the lawsuits asks a court to "set aside the unlawful CFIUS review process and President Biden's accompanying order" and to instruct CFIUS to reassess the proposal.

The acquisition plan was announced in December 2023. U.S. Steel was once a symbol of American economic prowess, but it has struggled to compete with foreign rivals.

The deal became a hot-button issue in the 2024 U.S. presidential election, as Pennsylvania, where U.S. Steel is headquartered, is a key battleground state. The leadership of the politically influential United Steelworkers union also came out against the deal.

During the election campaign, Biden, who leaves office on Jan 20, Democratic presidential candidate Vice President Kamala Harris and Republican President-elect Donald Trump all publicly opposed the deal.
 
 

BYD overtook Toyota in its all-electric vehicle sales last year for the first time. 59,736 all-electric vehicles were sold in Japan in 2024, down 33% from the previous year – the first decline in four years.

BYD sold 2,223 electric vehicles in 2024, up 54% from the year before. Toyota’s EV sales were down 30% to 2,038 units, according to the Japan Automobile Dealer Association.

BYD entered Toyota’s home market in 2023 with the Atto 3 crossover and Dolphin hatchback. Atto 3 is the international name for Yuan Plus. Later, the BYD Seal EV sedan joined it.

In 2025, the Shenzhen-based automaker will launch its fourth car in Japan, the BYD Sealion 07 EV. The BYD Dolphin starts at 2.99 million yen (19,000 USD). All models BYD sells in Japan are all-electric.

EV share fell below 2% in 2024, the lowest among developed markets. While other markets’ EV sales are growing more slowly, Japan’s reluctance to adopt EVs is becoming apparent.

Toyota’s first EV, the bZ4X crossover, rose 10% to 1,012 cars in 2024. The car starts at 5.5 million yen (34,800 USD) in Japan.

Nissan Motor is the market leader in Japan, controlling about 50% of the EV market. However, sales of the Nissan Leaf fell 44% to 30,749 units, the lowest number since 2021.

Sales of the Sakura, an electric kei car that embodies Japan’s iconic lightweight minicars, dropped sharply by 38% to 22,926 units. Meanwhile, sales of the Leaf saw an even steeper decline of 48%.

Among imported EV brands, Tesla is a clear market leader, and BYD is at about 40% of its sales in Japan. The company previously announced it plans to open 100 stores in Japan by 2025.
 
 

Suzuki Motor Corp. made its CES debut in Las Vegas this week, exhibiting a light truck and electric vehicles jointly developed with various startups.
CES is one of the world’s largest technology exhibitions.

President Toshihiro Suzuki spoke to The Yomiuri Shimbun among other media at the venue on Wednesday and explained the company’s aim at the exhibition.

“We want to connect with people who share Suzuki’s philosophy,” he said.
Regarding artificial intelligence, a major theme of CES, Suzuki said: “AI is advancing further than we thought. We want to work on it so that we don’t fall behind.”

He also indicated that he intends to broaden the company’s use of AI, which is currently limited to translation and document creation, and apply it to development, sales and other areas.
 
 

Apollo Global Management plans to expand in Japan and add staff to its Asia wealth business, its regional top executive said, as global investment firms pump more resources into the region to capitalise on a surge in deals and assets. 

The New York-based asset manager aims to add around 10 people in Japan to accelerate its expansion in the country, Matthew Michelini, Apollo's Singapore-based partner and Asia-Pacific head, told Reuters. 

"If I look at the regional leads that we need to hire over the next year or two, most of them we're looking for will be seated in Japan," said Michelini, one of the architects behind Apollo's move to ramp up Asia's contribution to its global business three years ago.

Its Tokyo office currently has around 20 to 25 staff including 10 investment professionals and the firm could expand the total to 30 in the next two years, he said. 

Japan will be Apollo's fastest-growing office in Asia for the next two years, with a setup covering private equity, institutional sales, wealth and credit, Michelini said, adding capital allocation to the country is also likely to rise.
Rivals including Warburg Pincus and Carlyle are also expanding in Japan with more hires. 

The Japan expansion coincides with a surge in dealmaking over the past two years, making the country a rare bright spot amid a slowdown in mergers and acquisitions, helped by a push for better corporate governance and a weakened yen making assets cheaper.

Japan was the largest market for private equity deals in the Asia-Pacific region in 2023 accounting for 30 per cent of total deal value, compared to only 5 per cent to 10 per cent historically, showed data from consultancy Bain & Co. 


Double weath staffing 

Meanwhile, the wealth business, launched two years ago and which has garnered over $5 billion in Asia-Pacific assets, will be one of Apollo's regional growth engines where it plans to double staffing over the next two years. 

Michelini said the firm will start wealth hiring in South Korea and Australia in 2025, adding to teams in Hong Kong, Singapore and Japan, without providing staffing targets. 

In December, Apollo poached Diane Poon from KKR as a principal in its wealth team in Singapore. 

Apollo is among a few private equity firms approached by Japan's Seven & i Holdings about participating in a potential buyout of the retailer, Nikkei reported in November, in what would be the world's largest-ever management buyout. 

The firm declined to comment on whether it is engaged with parties for a Seven & i deal. 

Globally, the Nasdaq-listed private equity and corporate credit specialist aims to more than double in size over the next five years. 

Founded in 1990, Apollo is a multi-asset manager with $733 billion of assets under management as of the end of the third quarter last year. It also provides investment and asset management services to retirees.
 
 

Japan’s dealmakers are expecting a busier 2025 after more than ¥36.4 trillion ($230 billion) in mergers and acquisitions last year, underpinned by companies’ changing attitudes around business expansion.

Sitting on ample cash and trading at low valuations, firms in Japan are becoming more proactive to fend off global rivals and activist investors showing renewed interest in the country after decades of stagnant growth.

Some businesses are opting to expand quickly through high-profile global acquisitions — with Nippon Steel going so far as to sue U.S. officials to pursue a deal.

Others including Honda are considering options once unthinkable: merging with rivals, or, in the case of Fuji Soft, working with private equity funds on a buyout.

"We’re in a very different time,” said Satoshi Shimada, the head of Japan M&A at JPMorgan Chase & Co. "The need to consider offers and the need to be prepared to consider offers have become significantly real in the last 12 to 24 months.”

The shift in corporate thinking has been noticeable. Dealmakers recall Japanese firms used to request meeting private equity funds at hotels instead of their offices to avoid the embarrassment of being seen with such investors.

For bankers, it would’ve been inconceivable to have "sell the company” as an option on a pitch deck in Japan. Now, businesses are becoming receptive to all options.



Activist funds

Pressure from activist hedge funds is one source of the urgency. Investors like Elliott Investment Management and ValueAct Capital Partners have been more aggressive in Japan, seeking to profit from undervalued companies sitting on high quality operations.

Such funds, which have historically been viewed with wariness, now have the backing of the economic ministry, while institutions like the Tokyo Stock Exchange are pushing Japanese companies to pay more attention to shareholder returns.

Japan was the second-busiest market for activist investing last year, with about 150 campaigns — a near 50% jump from 2023 — data shows. Meanwhile, Japanese stocks are poised to reach new record highs in 2025.

"We’re advising companies under pressure from activist shareholders, and they’re seriously considering going private or integrating with the operation of other Japanese companies,” said Kenichi Sekiguchi, a partner in the M&A practice at law firm Mori Hamada.

Sekiguchi said his team had a robust pipeline going into this year, and expects several transactions valued from hundreds of millions to billions of dollars to be announced in the first half.

In 2024, the value of mergers and acquisition deals that involved a Japanese company rose 44% to more than $230 billion, data shows. That’s the fastest growth since 2018 and compares with a 38% rise in M&A activity across the Asia-Pacific region.

The new year is starting with a slew of prominent deals that reflect a more dynamic corporate Japan.

There’s the potential ¥9 trillion ($57 billion) management buyout of Seven & i Holdings, as the 7-Eleven operator’s founding family tries to outmaneuver a takeover bid from Alimentation Couche-Tard.

Honda and Nissan formalized their intentions to work toward a tie-up at the end of last year, which could create the world’s third-largest carmaker.

And there’s the ongoing tussle between KKR & Co. and Bain Capital to take over Fuji Soft in a $4 billion-plus deal, marking a rare hostile bid by Bain in Japan.

The acquirers are increasingly diversified. In 2024, private equity firms with Chinese roots became more active in Japan. Hillhouse Investment Management announced a tender offer for real estate company Samty Holdings.

FountainVest Partners partnered with Unison Capital to buy Japanese jeweler Tasaki & Co. for about ¥100 billion from MBK Partners.
"We’re seeing a significantly increased universe of investors and buyers,” said Jeff Acton, a partner at the boutique investment banking firm BDA Partners in Tokyo.

Acton says lately he’s having two to three meetings a week with new investors and funds looking to enter the market. "Five years ago, it would’ve been zero meetings.”



Buyouts and privatizations

Some companies see going private as a more palatable option than becoming a subsidiary of a rival company, said Tetsuro Onitsuka, a partner at Swedish buyout firm EQT in Tokyo.

"We have a good pipeline this year, and some of that comes from this type of industry-driven pressure,” Onitsuka said. "It’s not going to become like the U.S. overnight, but there is a change in mindset and that’s driving the opportunities for us.”

Carlyle Group finished deploying its fourth Japan fund in about 3.5 years, ahead of the typical five-year timeline, said Japan Co-Head Takaomi Tomioka. The fifth Japan fund closed last May with ¥430 billion from investors, the largest Japan-focused buyout fund ever raised.

"The number of buyout opportunities has increased considerably,” Tomioka said. The firm expects to deploy about ¥100 billion this year from its new Japan fund, mostly in take-privates and carve-out deals, he added.

Despite the flurry of activity on Japanese soil, companies are also continuing a years-long trend of being aggressive overseas buyers. Headwinds like the weak yen and the blocking of Nippon Steel’s bid to buy U.S. Steel may have given some firms pause initially, but is unlikely to affect the overall course of more outbound deals from Japan, dealmakers said.

Japanese corporations’ combined cash holdings are also still near all-time highs — boosted by unwinding strategic shareholdings across some of the biggest companies.

Last July, Toyota announced it would buy back ¥806.8 billion worth of stock held by companies including Mitsubishi UFJ Financial Group and Tokio Marine Holdings. That cash will now need to be used — likely for M&A overseas, bankers said.

Industries like consumer products and insurance will likely be the most active overseas, considering the demographic decline trend in Japan.

"Over the next year, we’ll see lots of multibillion dollar outbound deals,” said Ken LeBrun, a partner at law firm Davis Polk & Wardwell in Tokyo.

"Cash is available, lending by Japanese banks is open. And for a lot of Japanese companies — to make the necessary impact on their businesses, they need to do big deals.”
 
 

Resona Bank was apparently hit by another cyberattack on Tuesday, as its internet banking service for retail customers was temporarily inaccessible.
The bank intermittently experienced a similar situation around the turn of the year.

According to the bank, Tuesday’s glitch began around 5:30 p.m., and the problem was largely resolved by around 7:30 p.m. No breach of customer information or virus infection has been confirmed.

The possible cyberattack was of the type that floods the target with a massive amount of data.

Glitches apparently caused by cyberattacks also hit MUFG Bank and Mizuho Bank late last month.
 
 

A potential foreign acquisition of Japanese retail giant Seven & i (3382.T) opens new tab would be "heavily related" to national security, Japan's economy minister Ryosei Akazawa said on Wednesday.

His public comment is the first by a senior Japanese official over security issues raised by a $47 billion buyout offer by Canada's Alimentation Couche-Tard (ATD.TO) opens new tab.

Seven & i was classified as "core" to Japan's national security in September, raising questions as to whether it was a defensive move. The finance ministry said at the time that the classification would not create hurdles to a potential buyout.

The owner of 7-Eleven convenience stores has rejected Couche-Tard's offer and its founding family is in talks to take the company private to fend off the takeover attempt.

"Speaking about a potential acquisition of Seven & i, I think the matter is heavily related to (national) security," Akazawa said at the Japan National Press Club.

Akazawa said convenience stores and their distribution networks could be utilised in the event of disaster to help bring hot food to people in affected regions, for example.

"If Seven & i's convenience store business is in foreign hands and run solely for profits, we'll have to think about various things, such as whether we can we get full support when our people affected by the disaster are suffering," he said.

Akazawa made the comments when asked about growing protectionism globally on national security grounds, as shown in U.S. President Joe Biden's decision to block Nippon Steel's (5401.T) opens new tab $14.9 billion bid for U.S. Steel (X.N).

Asked about potential Bank of Japan rate hikes, Akazawa said he wondered if current interest rate levels were normal, while stressing it was up to the BOJ to decide on monetary policy.

The central bank "may want policy leeway by having more room for a rate cut that could be conducted in case of emergencies," he added.
 
 

Toyota Motor Corp. said Monday that it will launch autonomous driving and other projects at a test course now under construction in central Japan, starting as early as this autumn.

The Japanese automaker said that Phase 1 of its Toyota Woven City test course in Susono, Shizuoka Prefecture, will be launched in autumn 2025 or shortly thereafter.

Woven City will provide a test venue for technologies including autonomous driving, robots, drones and flying cars while offering accommodation to researchers and their families.

"We think of Woven City as a 'test course for mobility' where we can develop any number of solutions," Toyota Chairman Akio Toyoda said at a press conference on the sidelines of the CES annual technology show in Las Vegas.

Daikin Industries Ltd., Nissin Food Products Co. and three other companies will take part in Woven City, whose concept was announced by Toyota at CES in 2020.
 
 

The study, authored by economist Clare McAndrew, also reveals that Japanese collectors buy far less at art fairs or online than the global average

The Japanese art market grew by 11% between 2019 to 2023 to an estimated $681m, compared to 1% growth worldwide during the same period, finds a new report. The Japanese Art Market 2024 is authored by Clare McAndrew, the founder of Arts Economics, and was commissioned by Japan’s Agency of Cultural Affairs.

While the Japanese art market rebounded from the challenges of the Covid-19 pandemic due to a stable structure that is volume-driven and heavily local, it also dipped 10% last year from $756m in 2022, entirely at the top end, McAndrew said at an online launch for the report, held in December.

Galleries and dealers constituted 68% of the value of Japan’s art sales in 2023, and its more than 2,060 professional galleries and dealers are situated mostly in Tokyo (59%) and the surrounding Kanto region (66%).

These galleries represent an average of 27 artists each—up from 20 in 2022.
Other findings from the report are that 74% of Japan’s gallery sales were conducted in-person at gallery facilities, compared to 10% at art fairs.

This is far less than the 29% of sales conducted by galleries at art fairs globally. Japanese galleries also attend far fewer fairs on average: four annually, compared to the global average of 11.

Online sales, which appeal most to younger buyers, constitute 20% of art sales worldwide, but in Japan they only account for 5%. “This report presents what is, rather than the why,” of Japan’s comparative digital disinterest, McAndrew said.

She surmised that one contributing factor could be a “trend towards disintermediation” that does not show up in official figures. “Some [artists] are making direct sales as well, so outside of the structure—and things like Instagram have been pivotal to giving artists the power to do that.”

Comparatively low turnover at auction and via digital sales may explain why the Japanese art market saw such a sharp one-year drop in 2020, of 38% compared to 22% globally. Though major Japanese galleries are increasingly visible at international art fairs, domestic sales continue to dominate, with 84% of sales made to local collectors. “That is a strong feature, but also limiting,” McAndrew said.

She continued that Japanese artists who are popular with international collectors, like Yayoi Kusama and Yoshitomo Nara, experience higher sales volume but at much lower prices domestically, and that overall, art in Japan is priced much more affordably.

Of the $221m in auction sales made in Japan in 2023, 91% of lots were under $10,000. By value, dealer sales under $250,000 and between $250,000-500,000 were respectively 29% and 19%, with works priced over $10m and $1m-10m at respectively 4% and 33%.

However, taken by volume, sales under $50,000 were 93% of transactions, with works under $10,000 comprising 77%; only 1% of transactions were under $1m. At auction, 91% of transactions were under $10,000 and 98% under $50,000.

Elsewhere, reports on high art prices deter younger, middle class potential buyers, McAndrew said, but "looking especially at the Japanese market, it is a very democratic market”.

Now with a global market share of 1%, Japan’s art market is around the size of Spain's, and it is Asia’s second-largest market, representing 5% of the region's share. Nonetheless it is still dwarfed by the combined share of Hong Kong and mainland China, which represents 80% of Asia and 19% of global art sales.

Japan’s lower price points may mean that art permeates more of its society; the art market directly creates about 12,700 jobs in Japan. Additionally, McAndrew said, some 47,320 visual artists are based in Japan, and the country has more than 5,000 museums, of which 1,000 specialise in art.

Art also fuels a very strong ancillary business worth $136m, services that are “very niche and wouldn’t survive or exist without the art market,” McAndrew said. “This core supports a much wider infrastructure.”
 
 

Japan's service firms enjoyed a festive end to the year.
The sector expanded for a second straight month during December according to figures out Monday.

The closely watched services PMI from au Jibun Bank rose to 50.9.
That was a bit lower than an earlier preliminary reading, but still well above the key 50 point level that indicates rising activity.

Firms were buoyed by solid demand.

That saw a subindex of new business rise for a sixth month, while employment was up for a 15th straight month.

Firms said they were hiring more people in line with expansion plans.
Business sentiment also stayed positive, with companies saying they are hopeful activity and demand will both grow over the coming year.

The rate of inflation held at relatively high levels during the month, largely due to rising costs for labor and raw materials.

That will bolster the chances of further rate hikes by the Bank of Japan.
However, bank governor Kazuo Ueda has said he also need to watch overseas developments, not least what Donald Trump does when he takes office in the U.S. later in January.
 
 

Whether Japanese employers will raise wages in 2025 faster than the previous year holds key to the economy's ability to put itself on a domestic demand-led sustainable growth path this year.

Wages need to grow faster than inflation to boost personal consumption, a key engine of economic growth that has been weak because of higher prices.

"It's hard for me to live on my pension if prices continue to rise," a housewife in her 70s said late last month in the popular Ameyoko shopping street in Tokyo, which was crowded with people purchasing ingredients for New Year's dishes.

The average price of the country's traditional "osechi" New Year's cuisine for 2025 was 27,826 yen, an increase of as much as 10.5 pct from three years before, according to research firm Teikoku Databank Ltd.

Japan's core inflation, which excludes volatile fresh food prices, exceeded 2 pct for the 32nd consecutive month in November, when rice prices surged 63.6 pct from a year before, the biggest-ever increase, because of the lingering effect of shortages in the summer.
 
 

Nippon Steel Corp is set to file a lawsuit in response to U.S. President Joe Biden's decision to block its $14.1 billion takeover of United States Steel Corp, sources close to the matter said Saturday.

Biden on Friday said the deal posed a risk to national security while urging the Japanese and U.S. steelmakers to "fully and permanently" abandon their plan, which has been backed by U.S. Steel shareholders. The leadership of the powerful United Steelworkers union strongly objected to the acquisition.

Nippon Steel, the world's fourth-largest steelmaker, and the smaller U.S. Steel immediately released a joint statement saying the U.S. authorities' review of their deal was "manipulated to advance President Biden's political agenda" and that they will "take all appropriate action to protect our legal rights."

Biden's order marked the first time an American president has banned a merger and acquisition deal involving a Japanese firm.

Biden, who leaves office on Jan 20, and President-elect Donald Trump have both publicly opposed the deal, which was initially announced in 2023 and became highly politicized ahead of the November U.S. presidential election.

The two firms are expected to claim in court that Biden did not present sufficient evidence to prove the acquisition poses a threat to U.S. national security, and that his decision violates due process under the U.S.

Constitution and the law governing the Committee on Foreign Investment in the United States.

The committee reviewed the deal but said last week it could not reach a consensus, leaving the decision to Biden, according to the companies.
 
 

Traders have started bidding at the first tuna auction of 2025 at Tokyo's Toyosu fish market. The top item fetched the second highest price on record.
The lively auction began with a bell shortly after 5 a.m. on Sunday.

Bids were made for raw and frozen tuna from across Japan and around the world.

The top item was a 276-kilogram bluefin tuna unloaded at the port of Oma in the northern prefecture of Aomori. A trader bought the fish for 207 million yen, or about 1.3 million dollars.

That is the second highest since comparable data became available in 1999. The highest bid on record is 333.6 million yen, or about 2.1 million dollars, marked in 2019.
 
 

Japan plans to map out a strategy within 2025 to boost defense equipment exports by enhancing the international competitiveness of its defense industry.

The government aims to strengthen the industry's foundation by helping expand its market reach, hoping to accelerate related efforts in cooperation with the private sector as U.S. President-elect Donald Trump is set to return to power soon with his "America First" policy.

The strategy, which will present medium- and long-term targets for defense equipment exports, will be worked out through cooperation among government agencies including the defense and trade ministries. Opinions of the industry will be reflected in the strategy.

The government expects that the strategy would be revised every five years.
Japan's defense industry relies almost entirely on demand from the Self-Defense Forces. Many manufacturers have quit defense business due to low profit margins.
 
 

Japanese cosmetics giants are struggling in the Chinese market and are making moves to develop new markets in the Global South and other regions.

In the past, China was seen as an area with high growth potential, but the market has seen a decline in sales due to a slowdown in consumption caused by the worsening real estate market as well as the rise in local cosmetics manufacturers.

In late November, Shiseido Co. presented a two-year action plan to run through 2026. Regarding the sluggish growth of the company’s Chinese business, Shiseido President Kentaro Fujiwara said, “We cannot expect to grow as fast as we have in the past.”

Shiseido’s consolidated financial results for the January-September period of 2024, based on international financial reporting standards, show that sales from its Chinese business fell by 2.4% compared with the same period the previous year. In particular, sales fell by more than 30% on the resort island of Hainan, a major area for the cosmetics market where Chinese nationals can buy goods duty-free.

As a result, the company has revised its consolidated net profit forecast for the fiscal year ending December 2024, to ¥6 billion, ¥16 billion less than its previous forecast.

“China is a huge consumer market from the medium- to long-term perspective,” said Fujiwara. “We can still offer many more new value products.” He did not mention any specific measures to deal with the problem.


Exports halved in 3 years

Shiseido has long positioned its China business as a “growth engine.” The company began selling products at Chinese state-run department stores and other outlets in 1981.

The company is widely recognized in the country, with its China-exclusive brand Aupres having been designated as the official cosmetics for the Chinese national team at the Olympics in the past. Sales for the fiscal year ending in December 2017 exceeded ¥1 trillion.

However, consumption started to slow down from around 2022 because of the deteriorating real estate market in China. In addition, Chinese brands, such as Florasis and Zeesea, have become more popular.

“There is a growing trend, especially among younger consumers, to use products made in their own country,” an executive of a major cosmetics company explained. “This has resulted in a double whammy of sluggish consumption in China and increased competition with Chinese brands.”

Other major cosmetics companies are having a similar problem to Shiseido’s. In the January-September period of 2024, Kose Corp. and Kao Corp. saw sales decline in Asia, including China, by more than 20% compared with the same period the previous year. Pola Orbis Holdings Inc. also saw overseas sales drop by 10% in the July-September quarter, affected by poor performance in China.

According to trade statistics released by the Finance Ministry, cosmetics exports from Japan to China increased sharply, reaching a value of ¥370.9 billion in 2021. However, exports have since started to fall, recording ¥281.3 billion in 2023, and only ¥188.3 billion in the January-October period of 2024.



Looking to Global South

With no effective measures being taken to rebuild their businesses in China, some companies are looking to enter other markets, such as Southeast Asia and India.

Kose is set to acquire Puri Co., a Thai cosmetics company, for about ¥13 billion. The Thai company, which will become a subsidiary, is successful with its high-end brands, such as body cream and hair care products.

Kose President Kazutoshi Kobayashi said at a press conference on Dec. 10: “We’ll strengthen our sales in the Global South. We’ll continue to aggressively seek business alliances and acquisitions.”

Mandom Corp. aims to expand its business into India, the Middle East and elsewhere in the future. The firm’s President Ken Nishimura said: “We haven’t even considered expanding to regions with [people having] different skin and hair textures. Now, we need to make our next move.”

Naoto Saito, head of the Economic Research Department of Daiwa Institute of Research, said: “There is a big business risk in focusing only on China. It’s necessary to develop new markets such as India and Africa.”
 
 

President Joe Biden has blocked the nearly $15 billion proposed deal for Nippon Steel of Japan to purchase Pittsburgh-based U.S. Steel — affirming his earlier vow on the presidential campaign trail to prevent the acquisition of Steeltown USA’s most storied steel company.

The proposed deal kicked up an election year political maelstrom across America’s industrial heartland and blocking it drew a threat of litigation from Nippon Steel.

“We need major U.S. companies representing the major share of U.S. steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said in a Friday morning statement.

Nippon Steel and U.S. Steel blasted the decision, saying in a joint statement that Biden's blocking the deal “reflects a clear violation of due process and the law” in a process it said was “manipulated” to advance Biden’s political agenda.

It also insisted that Biden cited no credible evidence of the deal presenting a national security problem and suggested it will sue, saying “we are left with no choice but to take all appropriate action to protect our legal rights.”

Biden's decision comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on the possible national security risks of the deal last month, and sent a long-awaited report on the merger to Biden. He had 15 days to reach a final decision.

The committee, chaired by Treasury Secretary Janet Yellen and made up of other cabinet members, can recommend that the president block a transaction, and federal law gives the president that power.

A U.S. official familiar with the matter, who spoke on condition of anonymity, told The Associated Press last month that some federal agencies represented on the panel were skeptical that allowing a Japanese company to buy an American-owned steelmaker would create national security risks.

The decision comes just weeks before the Democratic president is set to leave office and could damage relations between the U.S. and Japan, which is America’s biggest ally in Asia and its largest foreign holder of U.S. debt.

In their statement, the two steel companies said it's “shocking — and deeply troubling” that the U.S. would reject a transaction that advances U.S. interests and “treat an ally like Japan in this way.”

“Unfortunately, it sends a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States,” the companies said.

Biden previously came out against the deal last March during the presidential campaign — and was backed by the United Steelworkers, concerned over whether the company would honor existing labor agreements or slash jobs, as well as over the firm’s financial transparency.

“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said in a March statement, while he was still seeking reelection to the presidency before dropping out of the race.

“U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

President-elect Donald Trump has also opposed the acquisition and vowed in December on his Truth Social platform to block the deal and to use tax incentives and tariffs to grow the company.

On Friday, Steelworkers President David McCall said the union is grateful for Biden's move to block the sale and called it the “right move for our members and our national security.”

McCall had long questioned Nippon Steel's status as an honest broker for U.S. national trade interests and reiterated that Friday, saying in a statement that “Nippon has proven itself to be a serial trade cheater."

“Allowing it to purchase U.S. Steel would have offered it the opportunity to further destabilize our trade system from within and in the process, compromise our ability to meet our own national security and critical infrastructure needs,” McCall said.

McCall insisted that U.S. Steel has the financial wherewithal to make the company strong and resilient.

For its part, Nippon Steel had said it is best positioned to help American steel compete in an industry dominated by the Chinese and to invest billions in United Steelworkers-represented facilities, including the company's aging blast furnaces.

It pledged to protect U.S. Steel in trade matters, and promised not to import steel slabs that would compete with the blast furnaces.

Nippon Steel announced in December 2023 that it planned to buy the steel producer for $14.9 billion in cash and debt, and committed to keep the U.S. Steel name and Pittsburgh headquarters. Despite that, its proposal raised concerns about what the transaction could mean for unionized workers, supply chains and U.S. national security.

The announcement came during a tide of renewed political support for rebuilding America’s manufacturing sector and followed a long stretch of protectionist U.S. tariffs that analysts say have helped reinvigorate domestic steel.

Nippon Steel waged a public relations campaign to win over supporters, even offering $5,000 in closing bonuses to U.S. Steel employees, a nearly $100 million expense.

A growing number of conservatives and business groups like the U.S. Chamber had publicly backed the deal, as Nippon Steel began to win over some Steelworkers union members and mayors in areas near its blast furnaces in Pennsylvania and Indiana.
 
 

Nippon Steel Corp has promised it will not cut output capacity at United States Steel Corp's mills for 10 years, in its latest proposal to the administration of President Joe Biden aimed at winning approval to acquire the struggling producer, a media report said.

The Washington Post said the Japanese steelmaker sent its proposal to the White House on Monday after a panel of U.S. federal agencies failed to reach consensus on whether to approve the $14.1 billion sale of U.S. Steel to Nippon Steel, leaving the final decision to Biden.

The two steelmakers said last week they were informed by the Committee on Foreign Investment in the United States that it could not come to an agreement on the deal.

The panel, also known as CFIUS, is chaired by Treasury Secretary Janet Yellen. It is responsible for examining whether foreign investment transactions involving U.S. companies threaten national security.

Biden, who leaves office on Jan 20, and President-elect Donald Trump have both publicly opposed the deal announced by Japan's biggest steelmaker and the smaller U.S. producer in December last year.

The Washington Post said Nippon Steel's proposal guarantees not to reduce production capacity at U.S. Steel's mills in Pennsylvania, Alabama, Arkansas, California, Indiana and Texas without CFIUS approval.

Biden, who needs to make a final decision by early next week under CFIUS rules, could give conditional approval for the takeover if Nippon Steel agrees to comply with additional obligations, including the preservation of American jobs, the newspaper said, citing an unnamed U.S. official.

While U.S. government deliberations continue, the report also noted that Biden administration officials for the first time are considering a scenario that would leave a final decision to the incoming Trump administration.

During the 2024 presidential election campaign, Biden and Trump reiterated that U.S. Steel should remain in domestic hands, keeping in step with the leadership of the powerful United Steelworkers union.

U.S. Steel, once an iconic American company, is headquartered in Pittsburgh, Pennsylvania, which was a key battleground state in the Nov 5 presidential election.



© KYODO
 
 

A glitch made it difficult for Mizuho Bank customers to access its online banking services temporarily Tuesday, the major Japanese lender announced.

The internet banking services are believed to have suffered a so-called distributed denial of service, or DDoS, attack, in which enormous amounts of data are sent to overload traffic.

The problem occurred around 7 a.m. and was resolved shortly after 10 a.m., according to the bank.

The glitch hit mainly the bank’s “Mizuho Direct” service for retail customers and its “Mizuho e-Business Site” service for corporate clients.

No leak of customer information or damage from a computer virus has been confirmed, the bank said. The bank released a statement apologizing for causing trouble to customers.

In Japan, problems believed to have been caused by DDoS attacks occurred at MUFG Bank and Japan Airlines last week. A similar glitch hit Resona Bank intermittently on Saturday evening and later.
 
 

Japan's factory activity shrank at a slower pace in December as declines in production and new orders eased, a private-sector survey showed on Monday, edging closer to stabilisation after recent falls.

The final au Jibun Bank Japan manufacturing purchasing managers' index (PMI) rose to 49.6 in December, indicating the softest contraction in three months. The index was slightly higher than 49.5 in the flash reading and 49.0 in November but stayed below the 50.0 threshold that separates growth from contraction for the sixth straight month.

"The headline reading moved closer to neutrality amid softer reductions in both production and new order intakes," said Usamah Bhatti at S&P Global Market Intelligence, which compiled the survey.

The subindex of production shrank for a fourth straight month in December but the contraction was also slower than last month. Manufacturers noted that subdued new orders were the main factor behind the decline in output.

New orders contracted for the 19th straight month on subdued demand in both domestic and key overseas markets. Some firms in the survey suggested the semiconductor market was behind the weakness in new orders.

Employment expanded in December, reversing its fall in November, to reach its highest level since April. Firms in the survey said they hired more workers due to labour shortages as well as in preparation for future demand.

Input prices grew at the strongest pace since August, with firms citing higher costs of raw materials and labour. The weak yen also boosted inflation. To cope with rising prices, firms raised their output prices at the fastest rate in five months.

Manufacturers stayed confident about their outlook as they expect business to expand thanks to the launch and mass production of new products.
 
 

 
“Urban mining” is a term referring to recovering useful materials such as copper and rare metals from the circuit boards of used electronic devices, like computers and smartphones. These materials can then be reused.

Japan will step up imports of used electronic devices from countries in the Association of Southeast Asian Nations in order to promote the development of so-called urban mining, a method of recovering rare metals, overseas.

By providing guidance on how to collect and dismantle e-waste to people in Indonesia and four other ASEAN members, as well as support in establishing legal systems for this process, Japan intends to promote trade between these countries and Japanese companies.

“Urban mining” is a term referring to recovering useful materials such as copper and rare metals from the circuit boards of used electronic devices, like computers and smartphones. These materials can then be reused.

Japan, a resource-poor country, relies on imports for many kinds of rare metals, and it has been using its advanced technologies for removing impurities and recovering necessary metals to promote the collection and recycling of e-waste.

The volume of material recycled in Japan from used electronic devices reached 361,000 tons in 2019, more than any other Organization for Economic Cooperation and Development (OECD) member country, but it has remained flat since then.

Japan hopes to increase the total volume by strengthening its system for importing materials from ASEAN members.

In ASEAN countries, no legal system related to the collection and processing of e-waste has been established, and technology for dismantling these materials is currently insufficient.

As this will also help to prevent environmental pollution in these areas, Japan plans to provide both legal and technological support, aiming to “fence off” these urban mining resources.

The government has already begun providing technical support to ASEAN countries since the previous fiscal year, and will begin providing legal support to five countries — Indonesia, Thailand, the Philippines, Malaysia and Vietnam — as early as this fiscal year. It also plans to begin importing devices from these countries by fiscal 2028.

Currently, about 60% of the e-waste imported by Japan comes from Europe and North America. With European Union countries now making a big push to strengthen recycling, there are also economic security reasons for Japan to look to ASEAN as an alternative import source.

Japan is also laying out a blueprint for eventually achieving widespread resource circulation by exporting products made from recycled metals.

The Japanese government is aiming to transition to a circular economy, in which resources and products are efficiently used and waste generation is reduced.
 
 

The Nikkei share average retreated on 2024's last trading day on Monday from the five-month high hit in the last session, as investors locked in profits on the index that rose nearly 20% for the year.

The 225-issue Nikkei index fell 0.96% to close at 39,894.54 after opening 0.11% higher. It ended at a five-month closing high of 40,281.16 on Friday after a three-session winning streak.

The benchmark index finished at its best year-end level ever, topping the previous high of 38,915.87 on Dec. 29, 1989, when Japan was in the speculation-driven bubble economy.

The index rose 19.22% this year, underpinned by a weaker yen and the central bank's low-rate policy. In 2023, it had gained 28%.
The broader Topix index eased 0.6% to 2.784.92.

"Investors sold stocks today because they could not find clear reasons for the Nikkei to cross the 40,000 levels," said Fumio Matsumoto, chief strategist at Okasan Securities.

"But that does not mean investors are pessimistic about the market in the coming year. They may just want to avoid risks during the market close in Japan for the new year, which is longer than usual."

Japanese markets will reopen on Jan. 6 after closing for the New Year holidays starting Tuesday.

Uniqlo owner Fast Retailing shed 1.59% to drag on the Nikkei the most. Chip-testing equipment maker Advantest fell 2.6%.

Nissan slipped 5.73% to become the biggest loser in percentage terms on the benchmark. The carmaker surged 33.7% this month as merger talks with Honda surfaced. However, the stock ended the year 13.39% lower.

Fujikura, which makes wire cabling for data centers, grew sixfold this year, becoming the top gainer in percentage terms on the Nikkei.

Lasertec, which makes inspection equipment used in the production of semiconductors, fell 59% this year and was the Nikkei's worst performer.
 
 

The Japanese economy is expected to continue to grow at a moderate pace in 2025 supported by solid consumer spending on the back of wage hikes and the government's policies aimed at easing inflation pain.

Stimulus efforts overseen by the administration of Prime Minister Shigeru Ishiba will be in focus ahead of an upper house election in summer, which follows his ruling coalition's poor showing in October's general election.

Analysts also warn of downside risks from U.S. President-elect Donald Trump's protectionist approach to international trade.

"It is feared that higher tariffs promised by President Trump on China and other countries could put a damper on the global economy, eventually inflicting a blow on Japan," Takafumi Fujita, an economist at Meiji Yasuda Research Institute, said.

The ruling coalition led by Ishiba's Liberal Democratic Party lost control of the House of Representatives in the general election, a result that leaves the bloc needing cooperation from opposition parties to pass bills and budgets in the lower chamber.

With households struggling due to rising prices, attention will be on whether significant wage increases seen in 2024 will continue into next year and help improve consumer sentiment.

Adjusted for inflation, wages failed to grow consistently this year and are expected to remain unstable in early 2025. Ishiba apparently felt the need to focus on underpinning private consumption, which accounts for more than half of the nation's gross domestic product.

To do that, Ishiba's government has crafted a 39 trillion yen stimulus package for fiscal 2024 through March, featuring subsidies to curb higher energy costs between January and March and one-off cash handouts to low-income households.

"Real wages will likely grow in the April-June quarter or later as energy prices are projected to stabilize, with the help of envisioned higher salaries following next spring's annual wage negotiations," Fujita said.

In 2024, Japanese companies agreed to increase salaries by an average 5.10 percent in the shunto spring wage talks between management and labor unions, offering a more than 5 percent increase for the first time in 33 years, according to the Japanese Trade Union Confederation.

For 2025, the confederation, known as Rengo, has decided to demand pay hikes of 5 percent or more, aiming to maintain the wage growth momentum.

Rengo also seeks to realize wage increases of 6 percent or more for small- and medium-sized companies which employ an estimated 70 percent of the country's workforce, as their employees tend to receive more modest gains than workers at larger firms.

Kenta Domoto, an economist at Mitsubishi Research Institute, anticipated that salary increases would persist into 2025.

"As more individuals aim to switch jobs, companies often offer elevated salaries to attract talent," Domoto said, adding that businesses are also compelled to pay more to current employees to retain them.

Among public and private institutions, the Organization for Economic Cooperation and Development projected the Japanese economy to expand 1.5 percent in 2025, buoyed by wage increases and corporate investment.

Analysts forecast capital spending will remain solid in 2025 as companies will be more focused on investing in areas ranging from decarbonization to digitalization as well as efforts to improve productivity.

But they cast doubt on the strength of exports amid uncertainty over the outlook for the Chinese and European economies, especially after the return of Trump to the White House on Jan 20 with his unpredictable leadership style and "America First" policies.

Shunsuke Kobayashi, chief economist at Mizuho Securities Co, expected Trump's proposed tax reductions will support the U.S. economy and be positive for Japanese firms operating there.

But Kobayashi also warned of higher tariffs Trump has pledged to impose on U.S. imports, estimating that an additional 10 percent levy would push down Japan's real GDP by 0.13 percentage point.

In addition, Trump's trade policy is almost certain to cause tensions between the United States and China, and any retaliatory move by Beijing is likely to worsen relations between the world's two largest economies and hit global growth.

Such a development could lower Japan's real GDP by an additional 0.12 point, according to Kobayashi.

"If that happens, capital investment would decline due to expectations that exports will drop, eventually negatively affecting the broader economy," Kobayashi said. Such an outcome may cause companies to be reluctant to raise salaries, he added.
 
 

Around 45 percent of self-employed delivery drivers working for the Japanese unit of Amazon.com Inc said they had been involved in a traffic accident while on the job, a recent survey conducted by a labor union has shown.

The survey was organized by the General Support Union, which set up a division exclusively for self-employed Amazon drivers in January to negotiate higher wages and establish an appropriate limit on the number of deliveries assigned.

In the survey, carried out from January to Dec 1, 71 out of 160 respondents said they had experienced some sort of traffic accident while making a delivery, such as colliding with another vehicle or an electricity pole.

The survey showed accidents were often caused by drivers rushing to deliver a parcel or limited visibility due to excessive packages. About 89 percent of respondents said reducing the number of packages would help prevent accidents.

Around 72 percent said they were assigned 21 to 30 packages for delivery per hour, with most describing the workload as "too much." Some respondents said they had "no time to go to the bathroom" and felt "it is not worth the pay."

Amazon Japan G.K. said the survey does not reflect the opinions of its tens of thousands of drivers across the country, claiming that it provides parcel allocations designed to ensure safe and comfortable deliveries, as well as 24-hour support.

"The safety of our drivers is our top priority," the firm said.
 
 

The Financial Services Agency has issued an order to Aeon Bank to improve its business practices after it judged the bank’s measures against money laundering to be inadequate.

Aeon Bank, operated by retail company Aeon Co, has around 6,800 automated teller machines at its outlets, train stations and airports across Japan, according to Kyodo News. According to its latest disclosure report, the bank has about 4.62 trillion yen in deposits in 8.62 million accounts.


The Financial Services Agency has requested a review of Aeon Bank’s risk management system.

In 2021, the Paris-based Financial Action Task Force, which reviews the efforts of each country to combat money-laundering, pointed out that measures taken by regional banks and other institutions in Japan are insufficient.
 

 

Taiwan Semiconductor Manufacturing Co. said Friday it has started mass production at its first factory in Japan, as the government steps up efforts to strengthen supply chains for critical and essential goods.

The factory in Kumamoto Prefecture produces logic chips with 12 to 28 nanometer process technologies for use in cars and image sensors for customers such as Sony Group Corp. and auto parts maker Denso Corp.

The world's largest contract chipmaker plans to build its second factory in Japan next to the first plant to produce more advanced 6-nanometer chips.

The construction is expected to begin by March next year and the company seeks to start operations by the end of 2027.
 
The Japanese government has agreed to offer more than 1 trillion yen ($6.3 billion) in subsidies to TSMC.

It sees domestic chip production as critical for its economic security as heavy dependence on major supplier Taiwan poses geopolitical risks stemming from rising tensions between the United States and China over the self-ruled island.

Kumamoto Gov. Takashi Kimura called on TSMC to consider setting up its third plant in the prefecture, when he visited its headquarters in Taiwan in August.
 

Japan anticipates welcoming 35 million tourists this year, matching Thailand's figures, though it fell nearly 10 million short of Thailand's 40 million visitors in 2019.

Japan’s rise as a favored tourist destination over Thailand is attributed to its weakened currency and well-developed infrastructure, which caters to independent travelers. Japan expects to record 35 million tourists this year, around the same level as Thailand, although it was nearly 10 million tourists behind the 40 million Thailand attracted in 2019.


Key takeaways

• Japan’s rise in popularity as a tourist destination is driven by its weakened currency and infrastructure that caters to independent travelers.
• Tourism operators in Thailand are calling for improvements in attractions and service quality to reach their 40 million visitor target.
• Japan’s coordinated tourism marketing and superior infrastructure offer a competitive edge, challenging Thailand’s position as a leading tourist destination.

As a result, tourism operators in Thailand are urging the government to improve attractions and service quality to meet their target of 40 million visitors.

In the first eleven months of 2024, Japan welcomed more than 33.3 million international visitors, surpassing its previous record of 31.8 million set in 2019, despite ongoing efforts to curb overtourism. 

Meanwhile, Thailand hosted 32 million tourists during the same period, showing strong but slower growth.

Japan expects to close the year with 35 million visitors, matching Thailand’s projected figures for 2024. 

However, in 2019, Thailand attracted nearly 10 million more tourists than Japan, underscoring a shift in tourism trends.

Adith Chairattananon, honorary secretary-general of the Association of Thai Travel Agents (ATTA), pointed out that Japan’s cities are both major and secondary. are better equipped to serve independent travelers. 

The country boasts excellent rail connectivity, robust safety measures, pristine cleanliness, and a broad array of attractions, factors that set it apart in an increasingly competitive global tourism market.

In 2019, Thailand saw 1.3 million visitors from Japan, a dramatic rise from around 400,000 in previous years when the Thai government lifted visa requirements for Japanese nationals. 

Adith predicts that Thailand could see up to 2 million Japanese tourists in the coming years, a growing market for the Thai tourism sector.

Japan also continues to be a popular destination for Chinese tourists, despite the necessity of a visa. 

Experts suggest that if Japan were to remove the visa requirement, it could further challenge Thailand’s standing as a primary destination for Chinese travelers, competing with regions like Macau and Hong Kong.

Adith emphasized that Japan’s tourism marketing is highly coordinated, with efforts aligned between the national government and local tourism agencies. 

Provincial tourism bodies actively participate in international travel fairs, including the Thai International Travel Fair, highlighting the nation’s commitment to maintaining its appeal as a global destination.

Despite Thailand’s natural beauty, rich culture, and renowned hospitality, foreign operators have noted a lack of fresh selling points in the market. 
 
 

Toyota Motor Corp said Wednesday that its global production in November dropped 6.2 percent from a year earlier to 869,230 vehicles, due partly to equipment inspections that led to temporary suspensions at some domestic plants.

The decline was also attributed to fewer operating days at plants in Europe compared with the same month last year, Japan's largest automaker said. In November 2023, output was robust on the back of an easing of a semiconductor shortage.

Domestic production fell 9.3 percent to 285,761 vehicles in the latest reporting month, amid halts at the automaker's two plants in Aichi Prefecture, central Japan.

Its overseas output slid 4.6 percent to 583,469 units, with Europe seeing the sharpest fall of 18.0 percent, while China and North America recorded smaller decreases of 1.6 percent and 0.8 percent, respectively.

Toyota said its global sales rose 1.7 percent to 920,569 vehicles, supported by strong demand in North America and a recovery of its business in China.

Sales in China increased 7.0 percent to 175,983 units, surpassing the previous year's level for the first time in 10 months, buoyed by government subsidies and promotional efforts despite intense competition in the electric vehicle market.

In North America, sales grew 4.1 percent to 241,662 vehicles.
 


 

The Financial Services Agency plans to issue a business improvement order to Aeon Bank, Ltd. as a result of finding deficiencies in the bank’s anti-money laundering measures, it has been learned.

The FSA cited insufficient measures and is likely to call for Aeon Bank to improve its risk management system.

The Financial Action Task Force, an inter-governmental body headquartered in Paris that works to combat money laundering, placed Japan in the “enhanced follow-up” category, which is the second of three levels, in 2021.

Following the placement, the FSA investigated various financial institutions and urged them to fix any issues by the end of March 2024.

This will be the first time the FSA will take administrative action against a bank based on the investigations. The decision also appears to be a part of its efforts to make Aeon Bank more aware of its management issues.
 
 

The Committee on Foreign Investment in the United States (CFIUS) has told the White House it is unable to reach a consensus on the national security risks involved in Nippon Steel’s proposed acquisition of U.S. Steel X.N, the Washington Post reported on Monday.

The high-level government review board delivered its final evaluation of the deal late on Monday, the report said, citing two people familiar with the matter.
 
 

Honda Motor Co. and Nissan Motor Co., expected to sign a memorandum toward their integration as early as Monday, will likely face a shared issue of how to deal with China — the world’s largest car market.

While China’s BYD Co. continues to perform well at home, the two Japanese carmakers are experiencing a severe decline in sales in the country, down about 50% from five years ago.


Price war

Despite it being the weekend, only a few customers could be seen in the dealership for Dongfeng Nissan Passenger Vehicle Co., Nissan’s Chinese joint venture, in Beijing on Saturday. Of the nine vehicles on display at the shop, seven were gas-powered, and the rest were hybrid vehicles. None were electric.

Nissan’s problem with having no “hot sellers” is particularly bad in China, said one company executive. Some gas-powered cars are sold at a hefty 33% discount in the country.

China has seen the rise of new energy vehicles (NEVs) such as EVs and plug-in hybrids. These account for about 40% of new car sales, the highest percentage among the major economies.

BYD, the largest NEV automaker and a market leader, sold about 3.76 million vehicles from January to November, up 40% from the same period last year. Most of the cars were sold in China and all of them were NEVs. Sales were also up by a factor of eight from 2019, before the COVID-19 pandemic.

In contrast, Honda’s sales in China were down 31% to 740,000 units, while Nissan saw an 11% decline to 620,000 units. The two Japanese automakers will likely see their full-year sales decline by about half from 2019.

With BYD fighting a price war with no thought of profits, the Japanese and European giants have begun to lose their market share in a war of attrition, according to an executive at a major Japanese automaker.



Operating through joint ventures

Given the circumstances, Honda plans to cut its production capacity for gas-powered vehicles in China down to about 960,000 units, from about 1.5 million, by the end of the fiscal year.

The company also plans to trim its workforce by several thousand people. It has been releasing EVs in China since 2022, but sales have been sluggish in a market dominated by low-priced vehicles.

The situation is even bleaker for Nissan. In 2021, the automaker upped its annual production capacity by 30% to 1.8 million units, assuming demand for its vehicles in the Chinese market would quickly recover from a pandemic-induced decline. This was a larger increase than was made by Toyota Motor Corp. or Honda at the time.

But demand did not recover as hoped. And despite its sales falling every year, Nissan in March produced a bullish mid-term plan with a yearly sales target for China of 1 million units by fiscal 2026.

When sales did not improve, Nissan President Makoto Uchida in November announced a change in the mid-term plan.

“In light of the current situation, we will review our targets,” he said, effectively withdrawing the initial plan.

A factory closure is also being considered due to the company’s poor performance lately, according to sources.

Honda and Nissan both manufacture their vehicles in China through joint ventures with local firms. Although they work with some of the same companies in the country, coordination with such firms will likely be rough going when it comes to streamlining for their integration.

According to a survey by major consulting firm Arthur D. Little, only about 10% of people in Japan would consider purchasing a Chinese EV, while in China 90% of people said they would. Consumer appetite shows just how difficult it will be to break the stronghold of Chinese automakers.

“Even if they integrate their businesses, it won’t be easy to halt the trend toward their business shrinking,” an industry insider in China said, referring to the planned move by Honda and Nissan.
 

 

Japan's competition watchdog plans to order U.S. IT giant Google to halt violations of the country's antitrust law, sources familiar with the matter said Sunday.

The watchdog suspects that Google has unfairly pressured smartphone manufacturers to pre-install its search app, the sources added.

The Japan Fair Trade Commission determined that Google, which holds a dominant share of the online search market, has unfairly hindered competition, according to the sources.

The watchdog has already notified the company of possible disciplinary measures and will decide on them after hearing its response, they said.

Google allegedly requires smartphone manufacturers using its Android operating system to pre-install Google apps, including the Chrome browser, as a condition for offering the Google Play Store, the sources said.

The tech giant is also suspected of mandating specific placement of app icons on device screens in exchange for access to its app store, they added.

Moreover, it is accused of striking deals with manufacturers to share part of its revenue on the condition that they refrain from pre-installing rival companies' apps on their devices, the sources said.
 
 
 

 
Honda and Nissan were poised Monday to announce the start of talks on a merger to help the Japanese giants catch up with Chinese rivals and Tesla on electric vehicles.

Their collaboration would create the world's third largest automaker, expanding development of EVs and self-driving tech while coming to the rescue of struggling Nissan.

The pair have not released any details publicly but it was widely reported in Japanese media that they would sign a memorandum of understanding on Monday afternoon.

Honda and Nissan -- Japan's number two and three automakers after Toyota -- are aiming to finalize a merger deal in June 2025, several media outlets said.
Mitsubishi Motors, which could join the new holding company early next year, is also expected to take part in Monday's announcement, after Honda and Nissan hold board meetings.

In the morning, the presidents of Honda, Nissan and Mitsubishi Motors told the industry and transport ministries of their plan to start negotiations, Kyodo News reported.

Honda and Nissan's partnership could include a manufacturing tie-up where they build vehicles at each other's plants, Kyodo said, citing sources close to the matter.

Lackluster consumer spending and stiff competition in several markets is making life hard for many automakers.

Business has been especially tough for foreign brands in China, where electric vehicle manufacturers such as BYD are leading the way as demand grows for less polluting vehicles.

China overtook Japan as the biggest vehicle exporter last year, helped by government support for EVs.

"We hope Japanese companies will take steps to respond to these changes and take measures to survive and win amid international competition," top government spokesman Yoshimasa Hayashi said Monday.

He declined to comment on the merger reports but highlighted the "importance of strengthening competitiveness in areas such as... batteries and in-vehicle software".

Debt-laden Nissan last month announced thousands of job cuts as it reported a 93 percent plunge in first-half net profit, making a merger with Honda welcome news.

But Taiwanese electronics manufacturer Foxconn has also reportedly sensed an opportunity.

Foxconn, which builds devices for tech companies including Apple's iPhones, first unsuccessfully approached Nissan with a bid to acquire a majority stake, according to Bloomberg.

Then a Taiwanese media outlet said Foxconn's Jun Seki -- a former Nissan executive -- had visited France to ask Renault to sell its 35 percent share of Nissan, although reports later said this pursuit had been put on pause.

Honda and Nissan had already agreed in March to explore a strategic partnership on software and components for EVs among other technologies.

This partnership was joined in August by Mitsubishi Motors, of which Nissan is a majority shareholder.

Nissan has weathered a turbulent decade, including the 2018 arrest of former boss Carlos Ghosn, who later jumped bail and fled Japan concealed in a music equipment box.

Kyodo said that Honda would ask Nissan to achieve a "V-shaped recovery" in performance as a condition for the merger.