Weekly Japanese Industry and Policy News: 28 June - 04 July, 2025
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Japan's final H2A rocket successfully lifts off, ends 24-yr career
29 June, 2025
Japan successfully launched the 50th and final H2A rocket on June 29, 2025, from Tanegashima Island, marking the end of a 24-year mission that supported the nation's space program since 2001. Developed by Mitsubishi Heavy Industries and JAXA, the rocket carried a government satellite to monitor greenhouse gases and the water cycle, reaching an altitude of 670 km. The H2A achieved a 98% success rate, despite a major failure in 2003. Around 1,300 spectators gathered to watch the final launch. Japan is now shifting to the more cost-effective H3 rocket to compete in the growing satellite-launch market. Although the H3's debut in 2023 failed, recent launches have been successful, signaling a new chapter in Japan's space ambitions.
Kyodo: https://english.kyodonews.net/articles/-/56320
JAXA: https://global.jaxa.jp/press/2025/07/20250701-1_e.html
MHI: https://www.mhi.com/news/250629.html
▶ Japan’s latest particle detector on way to 2028 completion
30 June, 2025
Japan's Hyper-Kamiokande elementary particle observation facility is set to open in 2028, with its massive underground cavity (69m wide, 94m high, 600m deep) nearly complete. This third-generation neutrino detector, following Kamiokande and Super-Kamiokande, aims to capture proton decay—a discovery that could lead to a third Nobel Prize for Japanese scientists. Costing ¥65 billion ($450 million) and involving 640 researchers from 22 countries, the facility will hold 260,000 tons of ultrapure water and 20,000–40,000 photosensors to detect faint light from neutrinos. It will collect 8.4 times more data than its predecessor. While construction began in 2020, the timeline was delayed by a year due to design changes and rising material costs.
Asahi: https://www.asahi.com/ajw/articles/15874702
▶ Japan to begin extracting deep-sea rare earths next year
1 July, 2025
Japan will launch a first-of-its-kind pilot project in January 2026 to extract rare earth minerals from deep-sea mud near Minami-Torishima Island, using the deep-sea drilling vessel Chikyu. A pipe will reach 5,500 meters below the ocean surface to collect 35 metric tons of mud, marking the deepest such extraction ever attempted. The seabed near Minami-Torishima is estimated to hold 16 million tons of rare earths, including valuable elements like dysprosium and gadolinium. Japan aims to begin commercial use of these resources by fiscal 2028. A larger test in fiscal 2027 will attempt to recover 1,000 tons of mud, and a refinery is planned for the island. The project was delayed from 2024 due to late delivery of a specialized pipe from the UK, which cost about ¥12 billion ($83.3 million).
Nikkei Asia: https://asia.nikkei.com/Spotlight/Supply-Chain/Japan-to-begin-extracting-deep-sea-rare-earths-next-year
▶ Japan Aims to Deepen Ties with India over Critical Minerals
3 July, 2025
Japan and India held their first joint event in New Delhi on Wednesday to strengthen cooperation on critical mineral and battery supply chains. Co-hosted by Japanese ministries and JETRO, the event gathered around 70 companies and 200 participants, including government officials. Discussions focused on battery production, recycling, and business collaboration, amid concerns over China’s dominance in mineral processing.
Jiji: https://jen.jiji.com/jc/eng?g=eco&k=2025070300475
▶ 'Tough' Japan under pressure as Trump threatens higher tariff
3 July, 2025
U.S. President Donald Trump has threatened to raise tariffs on Japanese goods to as high as 35%, prompting Japan to enter damage control mode ahead of a critical July 9 deadline. Despite Japan’s efforts to offer a comprehensive economic package—emphasizing investment and cooperation—Trump has criticized Japan’s trade practices, particularly regarding autos and rice, and expressed skepticism about reaching a deal. Japanese Prime Minister Shigeru Ishiba highlighted Japan's role as a top investor in the U.S., but trade talks remain strained after the latest round ended in failure. With Japan's upper house election campaign overlapping the trade deadline, Tokyo faces limited flexibility. Officials remain hopeful, though concerns are growing that Japan may be forced to make concessions to avoid steep tariffs.
Nikkei Asia: https://asia.nikkei.com/Economy/Trade-war/Trump-tariffs/Tough-Japan-under-pressure-as-Trump-threatens-higher-tariff
Business News
▶ Mitsui Chemicals Launches Highly Oxygen-Permeable InnoCell™ Cell Culture Microplates
30 June, 2025
Mitsui Chemicals announced the July launch of InnoCell™, a new line of high-performance cell culture microplates designed for advanced drug discovery and personalized medicine. These plates, developed using proprietary materials and precision cutting technologies, offer superior oxygen permeability—supporting healthier, longer-term 3D cell cultures such as organoids and spheroids. The product comes in two types: non-treated “N-type” for non-adherent cells and organoids, and collagen-coated “C-type” for hepatocytes and pharmaceutical assays. InnoCell™ plates demonstrate improved organoid growth, including those from pancreatic cancer patients, and are well-suited for high-content imaging and phenotypic screening due to low drug adsorption and excellent fluorescence imaging performance. Mitsui Chemicals sees InnoCell™ as a key part of its expansion into the medical field, supporting innovation in drug development, regenerative medicine, and personalized treatments.
Mitsui Chemicals: https://jp.mitsuichemicals.com/en/release/2025/2025_0630_1/index.htm
▶ Honda delays, cuts target for Japan fuel cell production plans
1 July, 2025
Honda Motor is delaying production of its next-generation fuel cell modules in Japan, originally scheduled for fiscal 2027, and cutting planned manufacturing capacity by about 30% due to high costs and limited market adoption. As a result, Honda is opting out of a ¥14.7 billion ($102 million) government subsidy. The company had aimed to reduce costs and improve durability with the new modules but may now lower its 2030 sales target of 60,000 units. Despite setbacks, Honda remains committed to fuel cell and zero-emission vehicles by 2040. Meanwhile, fuel cell infrastructure and investment are declining in Japan and California, further weakening market prospects. Other Japanese automakers like Nissan and Toyota are also scaling back electrification plans.
Nikkei Asia: https://asia.nikkei.com/Business/Automobiles/Honda-delays-cuts-target-for-Japan-fuel-cell-production-plans
▶ First Shipment of LNG from the LNG Canada Project
1 July, 2025
Mitsubishi Corporation announced that the LNG Canada Project shipped its first LNG cargo on June 30. As Canada’s first large-scale LNG project (14 million tons/year), Mitsubishi will offtake 15% (2.1 mtpa) to supply mainly Japan and other Asian markets via its subsidiary, Diamond Gas International. LNG is viewed as a cleaner energy source for the energy transition, especially with rising global demand driven by growth and technologies like AI. Canada’s natural gas resources and proximity to Asia make it key to regional energy stability. Mitsubishi and partners are also considering doubling the project’s capacity.
Mitsubishi Corporation: https://www.mitsubishicorp.com/jp/en/news/release/2025/20250701001.html
▶ TEPCO Plans to Make Data Centers New Core Business by Fy27; Company Will Utilize Energy-Saving Technology
1 July, 2025
Tokyo Electric Power Company (TEPCO) plans to formally enter the data center business by fiscal 2027, making it a new core revenue source amid delays in restarting its Kashiwazaki-Kariwa nuclear plant. Previously handled by subsidiaries, TEPCO will now lead the initiative directly. Amid rising AI-driven data demand, TEPCO will leverage its energy-saving technology that reuses waste heat to cut data center power consumption by 75%. It aims to develop small to midsize data centers and will invest ¥200 million to open a showroom in Yokohama by fiscal 2026. With Japan’s data center power demand expected to grow sharply by fiscal 2034, TEPCO sees this venture as a key growth area, especially once its nuclear plant restarts and energy supply increases.
Yomiuri: https://japannews.yomiuri.co.jp/business/companies/20250701-266823/
▶ Yamaha Motor eyes chip tools in drive beyond motorcycle reliance
1 July, 2025
Yamaha Motor is positioning robotics as its third key business pillar alongside land mobility (e.g., motorcycles) and marine products. It launched Yamaha Robotics by integrating four companies, focusing on semiconductor-related equipment amid rising AI-driven chip demand. The company aims to boost robotics' share of sales from 4% to over 20%. It will enhance packaging tech and expand in Taiwan and India. Meanwhile, Yamaha is exiting the e-bike assembly markets in the U.S. and Europe due to oversupply and will concentrate on drive units and the Japanese market. It is also exploring growth in agriculture and low-speed autonomous driving. Despite these efforts, Yamaha's stock has fallen nearly 30% since June 2024, underperforming the broader market.
Nikkei Asia: https://asia.nikkei.com/Business/Transportation/Yamaha-Motor-eyes-chip-tools-in-drive-beyond-motorcycle-reliance
▶ MHI Thermal Systems Begins Field Test of Jointly Developed "Surplus Renewable Energy Absorption and Release System"
1 July, 2025
Mitsubishi Heavy Industries Thermal Systems has begun testing a world-first system that stores surplus renewable energy using an underground Aquifer Thermal Energy Storage (ATES) system. Launched at a facility in Osaka, the system stores cold water using excess solar/wind energy and later uses it for air-conditioning. The smart control system adjusts based on energy availability and market prices, improving efficiency and reducing emissions. This project supports Japan’s goal of carbon neutrality by 2040 and showcases MHI’s leadership in energy-saving thermal solutions.
MHI: https://www.mhi.com/news/25070102.html
▶ Lockheed deal highlights Fujitsu as under-the-radar Japan defense stock
2 July, 2025
Fujitsu’s share price recently hit a 25-year high, rising 40% over the past year, fueled by strong IT services performance and growing investor interest in its defense segment. The company expects a record ¥360 billion operating profit by March 2026, driven by digital investment. Interest in Fujitsu’s secretive defense business has increased, especially after a radar component deal with Lockheed Martin for Japan’s Aegis-equipped ships. Though defense operations remain largely undisclosed, Fujitsu ranks 71st globally in defense revenue. Japan’s ramped-up defense spending (¥43.5 trillion by 2027) and improved supplier profit margins support long-term profitability. However, Fujitsu faces cash flow strain due to delayed payments in both defense and IT projects. To stabilize cash flow, Fujitsu is shifting toward recurring revenue via its Uvance platform, aiming for ¥700 billion in sales by March 2026. Analysts say better disclosure of defense activities could significantly impact future share prices.
▶ Japan's utilities pour billions into power grid amid data center growth
2 July, 2025
Japan’s power companies, including Kansai Electric and TEPCO, are investing over ¥350 billion to upgrade power grids and support the growing demand from data centers driven by AI expansion. Kansai Electric will enhance substations in the Osaka area, while TEPCO will strengthen infrastructure in Chiba, a major data center hub. Electricity demand from data centers and chip plants is projected to surge over 14 times by 2034. The government supports this growth with its “Watt-Bit Collaboration” policy, integrating power and telecom infrastructure to enable efficient data center development. Challenges include high upfront costs—shared between operators and utilities—and risks from delayed data center construction, which can slow returns on grid investments. Power companies are also exploring technologies like heat reuse and launching their own data center initiatives.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japan-s-utilities-pour-billions-into-power-grid-amid-data-center-growth
▶ Japan's Furukawa uses mining expertise to extract seabed rare earths
3 July, 2025
Japanese conglomerate Furukawa is adapting its land-based mining technology to develop equipment for extracting rare-earth elements and metals from the ocean floor. The company holds around 20 maritime mining patents, accounting for 30% of Japan's total, and formed a dedicated team in 2023 to accelerate development. Japan is actively exploring seabed mining through the Japan Organization for Metals and Energy Security, and Furukawa has been involved since 2018. Interest in commercialization is growing, especially following U.S. efforts under the Trump administration to counter China’s dominance in rare earths. While challenges around profitability and environmental concerns remain, Japan—second globally in seabed mining patents after China—is advancing toward full-scale operations, with companies like Pacific Metals targeting commercialization by fiscal 2029.
▶ ENEOS and Mitsubishi Chemical Complete Construction of Chemical Recycling Facility toward Launch of the Plastic-to-Oil Conversion Business
3 July, 2025
On July 2, 2025, ENEOS Corporation and Mitsubishi Chemical Corporation (MCC) held a completion ceremony for their new plastic-to-oil chemical recycling facility at MCC’s Ibaraki Plant. The facility uses Hydro-PRT™, a hydrothermal recycling technology licensed from Mura Technology (UK), to break down waste plastic into recycled oil using supercritical water. This oil will be reused in existing refineries and chemical production, supporting a circular economy. The facility also aims to obtain ISCC PLUS certification to offer sustainable products. Both companies are committed to promoting carbon neutrality and circular resource use through this initiative.
Mitsubishi Chemical: https://www.mcgc.com/english/news_release/pdf/02377/02643.pdf
