JAPANESE ECONOMIC AND BUSINESS WEEKLY NEWSLETTER: 19 September - 02 October ,2026
The EU Japan Centre is releasing a weekly press review covering Japan's economic and business matters.
Outline
▶ Japan aims to ensure domestic vaccine production capacity for next crisis
22 Sep, 2026
Photo Source: Arisa Moriyama/Nikkei
Japan plans to maintain its domestic vaccine production capacity built during the COVID-19 pandemic to prepare for future outbreaks. The health ministry is seeking ¥76 billion in its fiscal 2027 budget to support vaccine manufacturers and may create a new long-term funding system. The goal is to ensure Japan can quickly develop and produce vaccines domestically instead of relying heavily on overseas suppliers.
▶ Japan to move CFIUS-style foreign investment review filings online
25 Sep, 2026
Photo Source: Reuters
Japan plans to move most foreign investment pre-screening applications online from as early as FY2028, making it easier for the new JFIC (Japan Foreign Investment Committee) to handle a growing number of cases. The system is designed to strengthen economic security reviews while continuing to encourage foreign investment. The rules also expand scrutiny to investments involving foreign governments and indirect acquisitions, particularly in infrastructure and advanced technology sectors.
Nikkei Asia:https://asia.nikkei.com/economy/japan-to-move-cfius-style-foreign-investment-review-filings-online
▶ Japan Foreign Ministry to recruit overseas experts in dual-use tech
28 Sep, 2026
Photo Source: Nikkei
Japan’s Foreign Ministry plans to hire foreign experts in dual-use technologies at around 10 diplomatic missions in the U.S. and Europe from FY2027. Their role will be to connect Japanese companies with overseas technology firms and research partners, attract foreign venture capital to Japanese startups, and help bring advanced technologies into Japan. The initiative is part of Japan’s broader effort to strengthen economic and national security through advanced technology.
▶ BOJ ups climate loans as debate swirls on how green central banks should be
28 Sep, 2026
The Bank of Japan continues to expand its climate-related lending, with the program reaching ¥24.9 trillion in July. The BOJ, like the ECB, supports climate finance while debating how far central banks should go without crossing into government fiscal policy. The BOJ has introduced a floating interest rate and a ¥50 trillion lending cap, while experts are calling for clearer standards to prevent greenwashing. The broader debate highlights the growing role of central banks in climate and sustainable finance.
▶ Looming 'Made in EU' bill threatens Toyota and other Japanese EV makers
29 Sep, 2026
Photo Source: Eiki Hayashi/Nikkei
The EU is considering a new Industrial Accelerator Act (IAA) that would favor EVs made in the EU. To qualify for subsidies and tax incentives, EVs may need to have 70% of their contents made in the EU and be assembled in the region. This could seriously affect Japanese automakers such as Toyota, Suzuki, and Nissan, because many of their EVs sold in Europe are imported from outside the EU. The measure is mainly intended to protect European manufacturers from growing Chinese EV competition. If approved, the law could take effect as early as 2028.
▶ Japan to create state investment fund for defense startups, eyeing more drones
30 Sep, 2026
Nikkei Illustration
Japan plans to establish a new government agency as early as next fiscal year to support defence startups, promote exports, and strengthen domestic production of dual-use technologies such as drones and AI. The agency will invest in startups and private-sector funds while helping companies export defence equipment. The initiative aims to attract more private investment and enable Japan to develop and produce advanced defense technologies more quickly.
▶ Steel Transshipment Countermeasures Planned by Japan, U.S., European Nations
30 Sep, 2026
Photo Source: Yomiuri
Japan, the U.S., Germany and 25 other countries and regions plan to strengthen monitoring of steel products routed through third countries, amid concerns over Chinese steel exports. The proposed framework would improve information-sharing on where steel is produced and how it enters markets, helping countries identify transshipment designed to circumvent antidumping duties. The initiative is particularly relevant to the EU, which already uses trade measures to address Chinese steel imports.
Yomiuri:https://japannews.yomiuri.co.jp/business/economy/20260930-351508/
▶ Japanese companies exit China in record numbers
01 Oct, 2026
Photo Source: Ko Tsuchiya/Bloomberg
A record number of Japanese companies are withdrawing from China as the Chinese economy slows, U.S. tariffs increase pressure, and Japan-China relations deteriorate. As of June 2026, 10,118 Japanese companies had operations in mainland China, down 22% from 2024 and 30% from the 2012 peak. Between 2024 and 2026, only 1,221 companies entered China, while a record 4,137 withdrew completely. Many companies are restructuring rather than fully decoupling, diversifying supply chains toward India, Vietnam, Thailand and other Southeast Asian countries. Rising labor costs, weak Chinese economic conditions, excess industrial capacity, and U.S. tariffs are also contributing to the shift.
FINANCIAL TIMES: https://www.ft.com/content/3d58c75e-035b-4958-89e7-2b2369e3a432?syn-25a6b1a6=1
▶ Japan's shipbuilding revival fund stokes private investment
02 Oct, 2026
Photo Source: Hakodate Dock
Japan’s government shipbuilding fund is encouraging private investment as the country aims to double shipbuilding capacity by 2035. Eight projects have been approved, with up to ¥311 billion in government support and around ¥900 billion in total public and private investment. Major shipbuilders are expanding docks, factories, production lines, and automation facilities. However, Japan still faces challenges, including shortages of workers and engineers, the loss of LNG carrier expertise, and strong competition from China and South Korea. Japanese shipyards currently have three to four years of backlogs, reflecting strong demand for new vessels.
Nikkei Asia:https://asia.nikkei.com/business/transportation/japan-s-shipbuilding-revival-fund-stokes-private-investment
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2. Business News
▶ World’s First Hydrogen-Fueled Engine for Large Commercial Vessels Successfully Completes Land-Based Testing
18 Sep, 2026
Photo Source: IHI
Japan Engine, Kawasaki Heavy Industries, and Yanmar Power Solutions have completed the world’s first hydrogen-fueled engine for large commercial vessels under NEDO’s Green Innovation Fund Project. Factory testing achieved at least 95% hydrogen co-firing and more than 95% lower GHG emissions compared with conventional heavy fuel oil. The engine will be installed on a 17,500 DWT vessel in 2027, with onboard demonstration testing scheduled to begin in April 2028 to assess its performance and durability under real operating conditions.
NEDO: https://www.nedo.go.jp/english/news/AA5en_100484.html
▶ Japan's Prodrone gears up to mass produce 58,000 drones a year
19 Sep, 2026
Photo Source: Prodrone
Prodrone plans to invest ¥3 billion to build a drone mass-production plant in Aichi, supported by ¥1.5 billion in government subsidies. The factory aims to produce 58,000 drones a year by 2029, mainly for industrial use, helping Japan reduce its dependence on imported drones, especially from China. Prodrone also plans to source more parts domestically and compete on price.
▶ Japan to tap industrial machinery for collecting physical AI data
21 Sep, 2026
Photo Source: Toshiki Sasazu /Nikkei
Japan’s government and major machinery makers plan to collect standardized, anonymized data from industrial equipment to develop Physical AI, including autonomous robots. DMG Mori, Komatsu and AIST will begin collecting data from about 1,600 machines, with more than 100 companies involved. Japan aims to strengthen its domestic AI robotics industry, protect sensitive manufacturing data, and boost the competitiveness and exports of Japanese AI robots.
▶ Japan's NEC joins Meta on ultrafast US-France undersea fiber-optic line
23 Sep, 2026
Photo Source: Kazuho Fujiwara/Nikkei
NEC and Sumitomo Electric are working with Meta on a new subsea fiber-optic cable connecting the U.S. and France. The cable aims to achieve speeds of around 1 petabit per second, roughly twice the capacity of today’s leading transoceanic cables. The project is driven by growing demand from AI and data centers, with service expected to begin in 2029.
▶ Sharp takes aim at Starlink dominance with universal satellite antenna
23 Sep, 2026
Photo Source: Kyoko Hariya/Nikkei
Sharp plans to develop a universal satellite antenna that can connect to multiple satellite networks, reducing reliance on providers such as SpaceX’s Starlink. The company aims to launch compact terminals around 2030 for uses including defense, autonomous driving, and remote construction equipment. Sharp sees satellite communications as a new growth business and is targeting ¥100 billion in satellite-related sales by 2035.
▶ Hitachi Energy and Enedis have signed €350 million agreements to power France’s energy future
24 Sep, 2026
Photo Source: Hitachi Energy
Hitachi Energy has signed €350 million long-term agreements with Enedis, France’s leading electricity distribution operator, to supply transformers and lifecycle services. The partnership will support France’s grid expansion and modernization, helping accommodate growing electricity demand from renewables, electric mobility, and industrial electrification while addressing the global transformer shortage.
Hitachi:https://www.hitachi.com/content/dam/hitachi/global/en/press/files/2026/09/260925d.pdf
▶ NEC Plans to Establish Satellite Constellation With Hundreds of Optical Communication Satellites
28 Sep, 2026
Photo Source: Yomiuri
NEC plans to build Japan’s largest satellite constellation, with hundreds of optical communication satellites operating as an integrated network from the 2030s. The system could provide high-capacity, low-latency communications for disaster response, drones, autonomous vehicles, and remote areas. The project is also supported by the Japanese government as part of efforts to strengthen economic security and reduce dependence on foreign satellite networks.
Yomiuri:https://japannews.yomiuri.co.jp/business/companies/20260928-350825/
▶ NTT, SoftBank eye AI cybersecurity systems that keep data in Japan
29 Sep, 2026
Photo Source: Nikkei
NTT and SoftBank are expanding cybersecurity services that use AI to detect software vulnerabilities without sending sensitive data overseas. NTT already offers a Japan-based system, while SoftBank plans to process OpenAI’s cybersecurity AI entirely in Japan. The services aim to meet growing demand for data sovereignty, especially among financial institutions, manufacturers, and critical infrastructure operators.
▶ Japan's Resonac develops large wafers that can yield 4 times as many chips
29 Sep, 2026
Photo Source: Nikkei and Resonac
Resonac has developed Japan’s first 300-mm silicon carbide (SiC) substrate, which can produce about four times as many chips as current 150-mm substrates. The technology could reduce production costs and improve the efficiency of power semiconductors, which are increasingly important for data centers and EVs. However, mass production of 300-mm SiC substrates has not yet begun, and Resonac will decide on investment based on customer demand.
▶ AI boom drives robot makers Fanuc, Yaskawa to step up shift from China to US
30 Sep, 2026
Photo Source: Miki Hiasa/Nikkei
Japanese industrial robot makers are expanding their presence in the U.S. as demand for AI-powered factory automation grows. Fanuc, Yaskawa, Nachi-Fujikoshi, and Kawasaki Heavy Industries are investing in local production and AI development. The U.S. has become an increasingly important market due to labor shortages and growing demand for automation. However, supply-chain challenges and U.S. tariffs remain concerns. Despite this, Japanese companies see significant growth potential in the U.S. market.
▶ Hitachi High-Tech and ZEISS accelerate joint development framework for next-generation multi-beam inspection tools
30 Sep, 2026
Hitachi High-Tech and Germany’s ZEISS SMT are strengthening their joint development of next-generation multi-beam semiconductor inspection tools. The technology combines ZEISS’s 91-beam technology with Hitachi High-Tech’s inspection and AI-based image-processing expertise, enabling detection of very small defects at speeds reportedly several dozen times faster than conventional single-beam inspection. The companies aim to accelerate development for advanced 2-nm-and-below semiconductor manufacturing, including processes using High-NA-EUV lithography.
Hitachi: https://www.hitachi.com/content/dam/hitachi/global/en/press/files/2026/09/260930.pdf
▶ Japan's Mitsubishi Heavy plans $640m commercial shipyard expansion
01 Oct, 2026
Photo Source: Kae Suefuji / Nikkei
Mitsubishi Heavy Industries plans to invest about ¥100 billion ($638 million) to increase commercial shipbuilding capacity at its Shimonoseki shipyard by 25% by fiscal 2028. The investment will include new cranes and facilities for more efficient production of next-generation fuel ships. The move comes as global shipbuilding demand is expected to rise, with many older ships needing replacement. Japan is also seeking to rebuild its domestic shipbuilding industry, which has lost market share to China and South Korea. Mitsubishi Heavy also plans to build a new hull-block factory nearby, scheduled to start operating in 2030.
▶ Japan's largest power producer teams with Dell on $15bn data center
01 Oct, 2026
Photo Source: Shun Kato/Nikkei
JERA, Dell, and U.K. AI cloud provider Rhaelm are planning a $15 billion, 400-MW AI data center in Chiba, Japan, next to a JERA gas-fired power plant. The facility will use “behind-the-meter” power, avoiding reliance on the wider electricity grid, with operations targeted for 2028. The companies aim to create a standardized model that could be replicated at other JERA power plants, potentially supporting multi-gigawatt AI infrastructure across Japan in the 2030s. The project reflects Japan’s push to expand AI and semiconductor infrastructure while addressing the global challenge of securing enough reliable electricity for data centers.
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