JAPANESE ECONOMIC AND BUSINESS WEEKLY NEWSLETTER: 13 -19 June,2026
The EU Japan Centre is releasing a weekly press review covering Japan's economic and business matters.
Outline
▶ Japan enters low-cost rocket competition against SpaceX with H3 launch
13 June, 2026
Photo Source: Kyodo
JAXA successfully launched its H3 No. 6 rocket, restoring Japan’s ability to launch satellites after recent setbacks. The mission demonstrated the performance of the low-cost H3-30 configuration, which was developed to reduce launch costs and improve competitiveness in the commercial space market. The success is an important milestone for Japan’s space program and supports plans to expand H3 operations and eventually transfer launch services to Mitsubishi Heavy Industries. However, the H3 will face strong competition from SpaceX and other global launch providers.
▶ Japan to explore rare-earth mining in Greenland to cut China reliance
14 June, 2026
Photo Source: Takashi Tsuji/Nikkei
Japan plans to study rare earth and critical mineral mining in Greenland, sending government geologists as early as this summer to assess feasibility and support Japanese investment. The move aims to reduce dependence on China, which dominates global supply. The study will examine deposits and extraction conditions for key materials such as dysprosium, graphite, tantalum, and niobium. Greenland is seen as a strategically important resource area with large reserves and growing international interest. Japan is also considering building parts of the supply chain, including possible refining in Europe, in cooperation with Greenland and partner countries.
▶ Japan to consider EV battery collection mandate as waste volume grows
16 June, 2026
Photo Source: Kazuho Fujiwara/Nikkei
Japan is considering strengthening its EV battery recycling system as the number of used batteries is expected to rise sharply. Currently, automakers voluntarily collect end-of-life batteries, but the government may make this mandatory under the recycling law to improve safety and resource recovery. The Environment Ministry and METI plan to set up a working group to explore policy options, including requiring manufacturers to take back batteries. This is driven by concerns over fire risks and securing critical materials like lithium and cobalt. Recycled battery volumes are projected to grow from about 50,000 in 2026 to 400,000 by 2040, putting pressure on the current system. In 2023, the European Union enacted its Battery Regulation, which sets targets for recycling rates.
▶ BOJ raises rate to 31-year high, citing Mideast inflation risks
16 June, 2026
Photo source: Pool
The Bank of Japan raised its policy interest rate to 1%, the highest level in 31 years, marking its fourth hike since ending ultra-loose monetary policy in 2024. The move reflects concerns that rising energy costs from the Middle East crisis are pushing up inflation. While the BOJ still expects the economy to remain resilient, it warned that inflation risks are increasing and signaled that further rate hikes are possible depending on economic conditions. It also maintained plans to gradually reduce government bond purchases but will stabilize them from 2027 to avoid market disruption.
Asahi: https://www.asahi.com/ajw/articles/16648833?msockid=2f0359c643f864b727104cca428265e8
▶ Japan, UK and Italy draw closer to next stage of fighter jet program
16 June, 2026
Photo Source: Nikkei
Japan, the U.K., and Italy are advancing their joint next-generation fighter jet project, GCAP, toward the main design phase with a goal of deployment by 2035. While a long-term agreement is still being finalized, recent high-level meetings reaffirmed strong commitment to the program. The project brings together major defense firms from all three countries to share costs and technology, though full development is still ahead.
▶ Battery storage costs fall below gas-fired power plants for first time
17 June, 2026
Source: BloombergNEF
Battery energy storage costs have fallen below gas-fired power plants for the first time, according to BloombergNEF, reaching $78/MWh in 2025 versus $102 for gas, driven by a sharp drop in battery prices due to Chinese overproduction and weak EV demand. At the same time, gas power costs have risen due to turbine shortages and higher fuel prices linked to geopolitical tensions. This marks a major shift in energy economics, making battery storage increasingly competitive with fossil fuels and accelerating the transition toward renewable-based power systems.
▶ Meeting between Prime Minister Takaichi and President von der Leyen of the European Commission
17 June, 2026
Photo Source: Cabinet Public Affairs Office
Japan’s Prime Minister Sanae Takaichi met with European Commission President Ursula von der Leyen and agreed to deepen cooperation between Japan and the EU in defense industry, advanced technologies, and supply chain resilience for critical materials. They also discussed trade issues, including EU steel tariffs and industrial policy concerns, while confirming closer collaboration on research programs such as Horizon Europe. Both sides reaffirmed coordination on global security issues, including Ukraine, China, North Korea, and Indo-Pacific stability.
MOFA: https://www.mofa.go.jp/erp/ep/pageite_000001_00007.html
▶ Japan wants to send 30,000 young scientists abroad for AI, quantum research
17 June, 2026
Photo Source: SIPA via AP
Japan plans to send 30,000 young researchers overseas over the next five years (2026–2030) to gain experience in advanced fields such as AI and quantum computing, as part of a national innovation strategy. The government sees international training and research collaboration as essential to strengthening Japan’s scientific and technological competitiveness. The plan also aims to address Japan’s lag in overseas study and international co-authored research compared with other major economies, by improving researcher mobility and global networks.
▶ Japanese Plan for 1％ Tax Rate on Food supported by Council Chair’s Draft
18 June, 2026
Photo Source: Yomiuri
A draft proposal presented in Japan suggests cutting the consumption tax on food to 1% from April 2027 for two years, while introducing cash benefits for low- and middle-income households that would effectively offset the tax, resulting in a near zero effective tax rate. The reduced rate would end in March 2029, after which the system would shift fully to income-based benefits. The plan aims to ease inflation pressures while balancing administrative simplicity and fulfilling election promises, though details are still under discussion.
Yomiuri: https://japannews.yomiuri.co.jp/politics/politics-government/20260618-333364/
▶ A European nation wants to buy Japan's defense equipment, Koizumi says
18 June, 2026
Photo Source: Nikkei
Japan’s Defense Minister Shinjiro Koizumi said a European country has shown interest in buying Japanese defense equipment after Japan lifted its ban on exporting lethal weapons. He said the policy shift has already led to deals such as submarine exports to Australia and is expanding Japan’s defense cooperation with other countries. Koizumi also stressed the need to modernize Japan’s defense capabilities while maintaining its defensive-oriented policy.
-------------------------------------------------------------------------------------------------------------------------------------
2. Business News
▶ Kioxia caps years of uncertainty to become Japan's most valuable company
13 June, 2026
Nikkei montage/Source photos by Nikkei and Kioxia
Kioxia has become Japan’s most valuable listed company after its market capitalization surged to around ¥44 trillion, overtaking Toyota. The sharp rise has been driven mainly by strong demand for memory chips used in AI data centers. The company, originally spun off from Toshiba’s memory division, faced years of delays and restructuring before going public in late 2024. Since then, its stock has surged significantly as AI-related demand boosted earnings expectations. Despite its rapid growth, Kioxia remains behind global rivals such as Samsung and SK Hynix, and its future performance will depend on whether the current AI-driven “supercycle” in memory demand continues.
▶ Japan's Terra Drone buys 2 Ukrainian drone makers in global push
16 June, 2026
Photo Source: Terra Drone
Terra Drone will turn Ukrainian drone startups Terra Drone and Amazing Drones into subsidiaries as it expands into combat-tested unmanned aerial vehicle technology. The companies specialize in low-cost interceptor drones used in real conflicts, and Terra Drone aims to speed up development and increase production for global markets. It also plans a joint venture for reconnaissance drones, targeting improved range, endurance, and GPS-resistant operation.
▶ JX Advanced Metals to raise optical chip wafer capacity for AI data centers
16 June, 2026
Photo Source: Nikkei and JX Advanced Metals
JX Advanced Metals plans to expand production capacity for indium phosphide (InP) wafers by up to 7–10 times by fiscal 2030, investing about ¥120 billion to meet growing demand from AI data centers and optical communications that reduce energy consumption. InP wafers are key to next-generation optical technologies used in systems like NTT’s IOWN and AI infrastructure. The company is also shifting toward semiconductor materials and has invested in Rapidus, which aims to produce cutting-edge advanced chips in Japan.
▶ Tokyo Electron chief sees edge despite China's chip self-sufficiency drive
18 June, 2026
Photo Source: Hikaru Yagi/Nikkei
Tokyo Electron CEO Toshiki Kawai says China’s push to build a self-sufficient semiconductor industry is creating new competitors, but he remains confident the company will maintain its technological lead due to its long experience and strong customer relationships. He noted that China’s share of revenue has fallen to about 30%, though this is mainly due to stronger AI-driven investment in other regions rather than weaker Chinese demand. Kawai highlighted strong growth opportunities in advanced chips such as HBM, DRAM, and 2nm logic processes, as well as 3D integration technology. He expects these trends, driven by AI and related technologies, to significantly expand future demand for semiconductor equipment.
▶ Japan's top defense contractor branches out into small interceptor drones
18 June, 2026
Photo Source: Nikkei and Mitsubishi Heavy Industries
Mitsubishi Heavy Industries is expanding into small, mass-producible interceptor drones, developing prototypes that can shoot down enemy drones and may be proposed to Japan’s Ministry of Defense. The move is driven by lessons from the Ukraine and Middle East conflicts, where low-cost drones have become key tools in warfare. While Japan aims to build a domestic drone industry, challenges remain due to low unit prices and the need for sustained government procurement to support large-scale production.
▶ Sharp defense satellite receivers offer both low and geostationary links
18 June, 2026
Photo Source: Kyoko Hariya/Nikkei
Sharp is developing compact satellite communication receivers for defense use that can connect with satellites in low, medium, and geostationary orbits, aiming for commercialization in 2028. The project is part of a contract with Japan’s Defense Ministry, in partnership with Japan Radio and Sky Perfect JSAT. The system is designed to provide more stable and flexible communications, especially for defense and emergency use, and will use flat, easily installed devices instead of traditional large parabolic antennas.
Sharp is also preparing a commercial version for wider applications and expects strong growth in the satellite communications market driven by 5G non-terrestrial networks.
▶ Japan's big banks weigh financing arms makers in break with past
18 June, 2026
Photo Source: Rurika Imahashi/Nikkei
Major Japanese banks are reconsidering their long-standing reluctance to finance defense companies, driven by rising geopolitical tensions and Japan’s policy shift toward supporting the defense industry. Government-backed institutions have already eased restrictions, and some banks are beginning internal discussions on lending, though views remain divided due to reputational concerns, including potential reactions from China. The change reflects Japan’s broader post-Ukraine war shift toward strengthening its defense sector, but a clear consensus has not yet been reached.
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
