JAPANESE ECONOMIC AND BUSINESS WEEKLY NEWSLETTER: 20 -26 June,2026
The EU Japan Centre is releasing a weekly press review covering Japan's economic and business matters.
Outline
▶ Japan Estimates 17 Strategic Fields Will Receive ¥370 Trillion in Public, Private Investments by Fiscal 2040
20 Jun, 2026
Photo Source: Yomiuri
The Japanese government plans to mobilize more than ¥370 trillion in public and private investment through FY2040 across 17 strategic growth sectors, including AI, semiconductors, shipbuilding, energy, digital infrastructure, and content industries. The initiative is a key part of Prime Minister Sanae Takaichi’s new growth strategy aimed at boosting productivity, strengthening economic security, and enhancing Japan’s global competitiveness. Major investment targets include ¥10.5 trillion for physical AI, ¥32.7 trillion for cloud infrastructure and data centers, ¥29 trillion for next-generation communications networks, and ¥24.5 trillion for the gaming industry. The government hopes that long-term public commitments will encourage substantial private-sector investment and support future economic growth.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20260620-333833/
▶ Japan to Discuss Trade Deal with Mercosur
22 Jun, 2026
Photo Source:Yomiuri
Japan plans to begin negotiations on an Economic Partnership Agreement (EPA) with Mercosur, a South American trade bloc consisting of Brazil, Argentina, Paraguay, Uruguay, and Bolivia.
Japanese businesses support the deal because it could boost exports of auto parts and improve access to important resources such as rare earths and oil. However, farmers are concerned that lower tariffs could lead to a surge of low-cost agricultural imports, especially beef and poultry from Brazil, putting pressure on Japan's livestock industry. In short, the agreement offers economic and resource-security benefits for Japan, but faces strong opposition from the agricultural sector due to concerns over increased foreign competition.
Yomiuri:https://japannews.yomiuri.co.jp/business/economy/20260622-334239/
▶ Japan, France cooperation extends to rare earths, seeking non-China sources
23 Jun, 2026
Photo Source: Kyodo
Japan and France are strengthening cooperation in critical minerals and economic security, including joint investment in a rare-earth recycling project in France led by Carester. The plant will begin operations in 2027 and aims to supply about 20% of Japan’s demand for heavy rare earths such as dysprosium, which are essential for EVs and defense equipment. Both countries are working to reduce heavy reliance on China, which currently dominates global supply and has imposed export restrictions that have driven up prices. The initiative is supported by the French government and Japanese partners including Japan Organization for Metals and Energy Security. Beyond rare earths, Japan and France are expanding cooperation into space, AI, and defense-related technologies as part of broader efforts to strengthen supply chain resilience among allied countries.
▶ European startup to make defense drones in Japan, export across Asia
23 Jun, 2026
Photo Source: TAKAKO FUJIU and RYOTA OGATA/Nikkei
Portuguese drone company Tekever plans to build its first overseas defense-drone manufacturing base in Japan, with Marubeni acting as its sales partner. The company aims to create a Japanese supply chain, use local technologies, and make Japan its export hub for Asia. Tekever's drones are mainly used for surveillance and reconnaissance, have been deployed in Ukraine, and are designed to resist signal jamming. The move supports Japan's efforts to strengthen domestic drone production and defense capabilities while expanding exports. Japanese firms such as Mitsubishi Heavy Industries and Terra Drone are also increasing investment in the drone sector.
▶ Japan to consider economic security in M&A screenings
24 Jun, 2026
Photo Source: Nikkei
Japan is revising its merger review rules to give greater weight to economic security benefits, such as stable domestic supply chains, innovation, and emissions reduction, when evaluating large corporate mergers and acquisitions. Under the new guidelines, the Japan Fair Trade Commission may approve mergers that strengthen strategic industries—even if they increase market concentration—if they improve supply security or national competitiveness. The change is expected to support consolidation in sectors such as shipbuilding, chemicals, and energy, while aligning Japan with similar policy trends in the European Union. In short, Japan is shifting from a purely competition-focused approach toward one that also considers economic resilience and national strategic interests.
Nikkei Asia:https://asia.nikkei.com/politics/japan-to-consider-economic-security-in-m-a-screenings
▶ Japan to fully digitalize airport customs declaration by 2030
24 Jun, 2026
Photo Source: Mainichi
Japan’s Finance Ministry plans to fully digitalize airport customs declarations by 2030 as part of its “Smart and Secure Border Control: Customs Vision 2030” strategy. Travelers will be able to complete procedures using QR codes generated online, replacing paper forms. The government also plans to introduce AI-based X-ray inspection systems at major airports such as Narita and Osaka to handle growing passenger and cargo volumes and ease labor shortages. The measures aim to improve efficiency as Japan targets 60 million inbound tourists annually.
Mainichi:https://mainichi.jp/english/articles/20260624/p2g/00m/0bu/006000c
▶ Japan to smooth nuclear plant approvals with earlier counterterrorism reviews
26 June, 2026
Photo Source: Nikkei
Japan's nuclear regulator plans to streamline approvals for new nuclear power plants by reviewing counterterrorism requirements during the design stage instead of just before operations. The change, expected to be reflected in legislation as early as 2027, aims to avoid costly redesigns and speed up construction. The move supports Japan's long-term plan to replace aging reactors, with up to five new reactors targeted by the 2040s and as many as 14 by the 2050s.
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2. Business News
▶ Japan's Toto to invest $495m in chip materials, targeting 1-nm era
22 Jun, 2026
Photo Source: Toto
Toto plans to invest ¥80 billion ($495 million) over the next five years to expand its semiconductor materials business, focusing on technologies that support next-generation 1-nanometer chip production. The investment will increase production capacity at its facilities in Kyushu and strengthen R&D for advanced logic semiconductors. While best known for its bathroom products, Toto's semiconductor materials business has become a major profit driver due to growing demand for AI chips. The division, which produces products such as high-performance ceramic electrostatic chucks for semiconductor manufacturing, recorded strong growth in sales and profits in FY2024 and now contributes more than half of the company's total operating profit.
▶ Japan's Kanadevia to tap European demand with Italy biogas plant
23 Jun, 2026
Photo Source: Kanadevia
Kanadevia will build a biogas plant in Sicily, Italy, with operations expected to begin in 2028. The facility will convert organic waste into biomethane and electricity, supporting Europe’s efforts to reduce carbon emissions and strengthen energy security. The project is part of Kanadevia’s broader global expansion in renewable energy. Following acquisitions of biogas plants in the U.K. and ongoing projects in the U.S., the company is positioning biogas as a key growth business. Rising concerns about energy security since the Ukraine war and the push for cleaner energy sources are increasing demand for biomethane across Europe. Kanadevia is also expanding waste-to-energy and biogas projects in other regions, including the U.S., Southeast Asia, and the Middle East, as it seeks to capitalize on the global transition toward renewable and low-carbon energy.
Nikkei Asia:https://asia.nikkei.com/business/energy/japan-s-kanadevia-to-tap-european-demand-with-italy-biogas-plant
▶ MHIET's 500kW-Class Hydrogen Engine Generator Set Achieves Technology Readiness Level for Commercialization REMOVE for Excel table
23 Jun, 2026
Photo Source: MHI
Mitsubishi Heavy Industries’s subsidiary Mitsubishi Heavy Industries Engine & Turbocharger has successfully completed key demonstration tests of a 500kW-class hydrogen engine generator using 100% hydrogen fuel, reaching a level of technical maturity suitable for commercialization. The system, tested at the Sagamihara Plant with over 100 hours of operation, showed stable performance in power output, efficiency, emissions, and reliability, while also confirming its ability to handle variable demand and abnormal combustion. Long-term durability testing remains pending due to limited hydrogen supply. The company will continue testing and development toward full commercialization, aiming to support decarbonization through hydrogen-based distributed power generation.
MHI:https://www.mhi.com/news/260623.html
▶ Japan's 'Sakana Fugu' multiagent AI scores well against Fable 5, GPT 5.5 REMOVE for Excel table
23 Jun, 2026
Photo Source: Sakana AI
Japanese AI startup Sakana AI has launched Sakana Fugu, a new AI service that combines multiple AI models into a single collaborative system. Rather than relying on one model, Fugu assigns different tasks to the AI models best suited for them and integrates their outputs into a final answer. According to Sakana AI, Fugu outperformed several leading AI models, including those from Anthropic, Google, and OpenAI, on coding and scientific-reasoning benchmarks. The company plans to add more specialized AI agents in the future to improve performance and handle more complex tasks. Subscriptions start at $20 per month.
▶ Major German defense firm Rheinmetall eyes production base in Japan
23 Jun, 2026
Photo Source: BLOOMBERG
Rheinmetall plans to deepen cooperation with Japanese firms and is considering setting up its first defense-related production base in Japan. The company says it will begin discussions soon and aims to contribute to security in the Asia-Pacific region and support potential defense export projects with Japanese industry. Rheinmetall, already active in supplying ammunition to Ukraine and investing in drones, satellites, and heavy military systems, is expanding its global partnerships amid rising defense demand in Europe. In Japan, it already operates a non-military manufacturing site for automotive cooling systems in Odawara.
Japan times:https://www.japantimes.co.jp/business/2026/06/23/companies/rheinmetall-production-base-japan/
▶ Rakuten to offer satellite-to-cell service in Japan with US startup REMOVE for Excel table
24 June, 2026
Photo Source: Nikkei
Rakuten Group plans to establish a satellite communications joint venture in Japan this year with AST SpaceMobile. The new company will own and operate satellites and provide direct-to-smartphone connectivity without relying on ground-based cell towers. The service is expected to launch in stages from late 2026 and achieve nationwide coverage in Japan by fiscal 2027. Rakuten sees the project as important for both business growth and national security, while also helping improve connectivity in rural areas and during natural disasters. The move will put Rakuten in direct competition with Japan's larger mobile carriers, which currently offer similar services through SpaceX Starlink. Rakuten may also expand the service internationally in the future.
▶ Mitsubishi Electric Joins Publicly Solicited Project to Verify System for Identifying Greenhouse Gas Emission Sources
25 Jun, 2026
Photo Source: Mitsubishi Electric
Mitsubishi Electric has been selected by Japan Organization for Metals and Energy Security to verify satellite-based technology for detecting and measuring methane emissions. The project will use multiple satellites, including GHGSat and Japan’s GOSAT-GW, to identify emission sources and improve accuracy in greenhouse gas monitoring. The goal is to develop a practical service that visualizes emissions for companies and governments and supports global methane reduction efforts, especially in the LNG and oil and gas sectors. The project is part of broader efforts to improve transparency and reduce greenhouse gas emissions using advanced space-based monitoring systems.
Mitsubishi Electric:https://www.mitsubishielectric.com/en/pr/2026/0625_ds/
▶ Honda, Nissan, Mitsubishi eye standardizing next-gen part to cut costs
25 June, 2026
Photo Source: Nikkei
Honda Motor, Nissan Motor, and Mitsubishi Motors are in final talks to standardize electronic control units (ECUs) for next-generation vehicles, including EVs and hybrids. The move would allow the companies to jointly procure key components, lower costs, and improve competitiveness against rivals such as Tesla and Chinese automakers. The companies are also discussing standardizing software and operating systems for software-defined vehicles (SDVs), as well as expanding cooperation in North America. If an agreement is reached, vehicles using the common ECUs could be launched around 2029–2030. The collaboration comes as both Honda and Nissan seek ways to improve profitability following significant financial losses and challenges in their EV businesses.
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