Journalist
스가 타케시 기자/ [번역] 이경
dorami@ajunews.com
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Japan Approves MBK Partners' Acquisition of Altamira Holdings Korean private equity firm MBK Partners will acquire Japanese aluminum company Altamira Holdings for approximately 130 billion yen (about $1.2 billion). The Japanese government approved the transaction following a pre-review under the Foreign Exchange and Foreign Trade Act. This decision contrasts sharply with the recent recommendation to halt MBK's acquisition of Makino Precision, raising questions about the criteria used in Japan's economic security reviews. According to the Nihon Keizai Shimbun (Nikkei) on May 11, MBK plans to purchase shares of Altamira Holdings from U.S.-based Apollo Global Management. The total acquisition cost, including debt, is around 130 billion yen. Altamira specializes in aluminum cans and industrial aluminum materials, generating approximately 200 billion yen in revenue. It ranks third in Japan's aluminum can market, following Toyo Seikan. The company was formed in 2022 when Showa Denko's aluminum business merged with Mitsubishi Materials, both of which were acquired by Apollo prior to the merger. Apollo has been expanding its presence in the Asian market and recycling business under its management. Altamira was required to undergo pre-review because some of its lithium-ion battery-related materials fall under Japan's designated 'core industries.' The Japanese government mandates that foreign investments or acquisitions in sectors deemed critical to national security must be reported and reviewed beforehand. Lithium-ion battery materials were added to this list following the enactment of the Economic Security Promotion Act in 2022. This move aims to reduce reliance on Chinese technology in battery development, as these materials are also used in defense equipment. At the time of Apollo's acquisition, this sector had not yet been classified as a core industry. Just a month prior, MBK received a contrary decision from the Japanese government regarding its bid for Makino Precision. The government advised halting the acquisition based on the Foreign Exchange Act, marking one of the first such recommendations since 2008, when a British fund's stake in J-Power was blocked. Concerns were raised about the potential for information leaks due to the extensive use of Makino's machinery in defense manufacturing processes. In contrast, the approval for Altamira's acquisition came relatively quickly. While discussions regarding Makino lasted about ten months, the review for Altamira was completed in approximately two months. Authorities likely assessed that security concerns regarding Altamira were minimal. However, it remains unclear whether the criteria for investment approvals have become more transparent. Industry voices have expressed that within core industries, the boundaries of what is approved remain vague, complicating investment decisions. While the approval of Altamira sets a new precedent, uncertainty will persist until Japanese authorities disclose specific judgment criteria. This acquisition reflects changes in the M&A landscape surrounding Japanese companies. Pressures to enhance corporate value on the Tokyo Stock Exchange and rising costs due to inflation have prompted Japanese firms to pursue management buyouts (MBOs) and business separations. Consequently, private equity firms with financial resources and restructuring expertise are playing an increasingly significant role. According to Nikkei, the number of M&A transactions involving foreign investment funds in Japanese companies reached 226 in 2025, the highest since records began in 1998. Notably, large acquisitions are often led by foreign funds, with their total acquisition value in 2025 exceeding 5.4 trillion yen, four times that of Japanese funds. The approval of the Altamira acquisition suggests that Japan is not outright blocking foreign capital under the guise of economic security. However, the distinction between what is permitted and what is prohibited remains opaque. The contrasting decisions regarding Makino and Altamira provide some insight into Japan's economic security review process, but a clear set of criteria that the market can accept is still lacking.* This article has been translated by AI. 2026-05-12 05:01:23 -
Shift in Japan's Stock Market Leadership: Semiconductors and Banks Rise Japan's stock market is witnessing a shift in leadership. Once dominated by automotive and telecommunications companies, the market is now being led by semiconductors, banks benefiting from rising interest rates, and general trading companies with resource interests, all of which are capitalizing on the growing demand for artificial intelligence (AI). On May 11, the Nikkei 225 index closed down 226.81 points (0.36%) at 62,486.84. The index opened at 63,203.44 and briefly rose to 63,385.04 during the day, but profit-taking led to a decline to 62,437.20, erasing earlier gains. This followed a record high closing on May 7, which contributed to the pressure at these elevated levels. According to the Nihon Keizai Shimbun (Nikkei), the number of companies with market capitalizations exceeding 10 trillion yen (approximately $93.9 billion) rose to 27 as of May 8, an increase of four from the end of last year. At one point in mid-April, this number reached 30. As the base of Japan's large-cap stocks broadens, the focus has shifted from automobiles to semiconductors, banks, and trading companies. The most notable change is in the semiconductor sector. Kioxia Holdings' market capitalization reached 24.2 trillion yen as of May 8, soaring more than 30 times from its initial public offering price of 784.3 billion yen in December 2024. Its ranking in market cap jumped from 43rd at the end of last year to 5th, surpassing major manufacturers like Hitachi and Keyence. The surge in NAND flash prices driven by AI demand has led to sharply revised profit forecasts for the fiscal year 2026 (April 2026 to March 2027). Companies related to AI and semiconductors, such as SoftBank Group, which invested in OpenAI, and semiconductor equipment firms like Tokyo Electron and Advantest, now occupy four of the top ten spots. The revival of bank stocks is also noteworthy. The three major megabanks, including Mitsubishi UFJ Financial Group, have all surpassed a market cap of 10 trillion yen for the first time in nearly 20 years. Rising interest rates, which were once a burden during deflationary periods, are now seen as a catalyst for improved profitability, changing market perceptions. General trading companies like Mitsubishi Corporation are also gaining prominence amid inflation and fluctuating resource prices, boosting their market cap rankings. From Deflation to Inflation The Nikkei highlights that rising prices are a key factor behind these changes. Tetsuro Ii, president of Commons Asset Management, stated, "The shift in Japan's economic trend from deflation to inflation is significant." As the long-standing deflationary period ends, companies find it easier to pass on rising costs and increased demand to prices, which in turn boosts expectations for revenue and profit growth, driving up stock prices. The semiconductor sector, with its soaring sales prices and rapidly expanding earnings due to strong AI investment, exemplifies this inflationary trend. In contrast, the automotive sector, once a cornerstone of the Japanese stock market, is losing its prominence. Toyota Motor Corporation retains its top position with a market cap of 46 trillion yen, but the gap with second-place companies like SoftBank and Mitsubishi UFJ is narrowing. Following Toyota's forecast of a third consecutive year of declining net income for the fiscal year 2026, the market reacted with disappointment, pushing its stock price to a year-to-date low on May 8. All three major Japanese automakers—Toyota, Honda, and Nissan—now have price-to-book ratios (PBR) below 1. The automotive sector's share of the Tokyo Stock Exchange's TOPIX index has also fallen to 5.3%, a decline of 2 percentage points over the past year, marking its lowest level since 2000. However, the Nikkei cautions that this shift in market capitalization does not necessarily indicate a restoration of Japan's stock market status. Over the past year, the growth rate of market capitalization in dollar terms has been 30.9% in the U.S. and 30.8% globally, compared to just 26.0% in Japan. Only three Japanese companies—Toyota, SoftBank Group, and Mitsubishi UFJ Financial Group—are included in the global top 100 by market cap, down from four a decade ago. As of the end of April, Japan's share of the MSCI All Country World Index (ACWI) stood at 5%, down from 7.7% ten years ago. 2026-05-11 14:18:57 -
Japan Initiates EPA Negotiations with Five South American Countries Amid Market Competition Japan is gearing up to begin negotiations for an Economic Partnership Agreement (EPA) with the five member countries of the South American trade bloc Mercosur. The initiative aims to diversify supply chains for energy and critical minerals, reducing reliance on the Middle East and China, while also protecting Japanese companies from tariff disadvantages as the European Union (EU) has already activated its own free trade agreement with Mercosur. According to the Nikkei newspaper, the Japanese government is exploring options to enter EPA negotiations with Mercosur by this summer. Mercosur consists of Brazil, Argentina, Uruguay, Paraguay, and Bolivia. Japan has already begun strengthening its ties with Mercosur since late last year. In December, the Japanese Ministry of Foreign Affairs launched a "Strategic Partnership Framework" with Mercosur, discussing cooperation in trade, investment, supply chains, digital economy, and energy. Both sides described each other as "one of the most important economic partners" in a joint statement. The Nikkei reported that the Japanese government plans to hold additional strategic talks with Mercosur as early as the end of May, and is coordinating a visit from Brazil's Foreign Minister Mauro Vieira in mid-May. Prime Minister Sanae Takaichi also received relevant reports from ministry officials at the Prime Minister's Office on April 28. If negotiations commence, it will mark the first large-scale free trade talks since Takaichi's administration began. Japan's urgency is driven by economic security and trade competition. The combined GDP of the five South American countries is approximately $3.16 trillion, roughly three-quarters the size of the Association of Southeast Asian Nations (ASEAN). However, trade between Japan and these countries was only about 2.4 trillion yen (approximately $22.4 billion) last year, less than one-tenth of the trade between the U.S. and ASEAN, indicating significant potential for growth. Japan is particularly focused on South America as a source of resources. Brazil ranks as the ninth-largest oil producer globally, with crude oil production reaching a record high of 4.3 million barrels per day in March. The country also has the second-largest reserves of rare earth minerals. Argentina is a key producer of lithium, a critical material for electric vehicle (EV) batteries. The Nikkei noted that Japan's assessment was influenced by the increased risks of reliance on the Middle East following attacks on Iran by the U.S. and Israel, as over 90% of Japan's oil imports were from the Middle East before tensions escalated. Market of 700 Million People Additionally, the EU's early entry into the market is putting pressure on Japan. The Nikkei reported that the EU-Mercosur free trade agreement has begun provisional application, even though ratification by some member countries is still pending. As a result, tariff reductions on agricultural and industrial products are gradually starting in a market that totals around 700 million people between the EU and Mercosur. The Japanese business community has been advocating for an expedited EPA due to these circumstances. If European companies receive tariff reductions first, Japanese automotive and machinery manufacturers could face disadvantages in price competition within the Mercosur market. Both the Japanese government and businesses view Mercosur as a crucial element for diversifying supply chains, and South American countries are also interested in expanding cooperation with Japan to reduce dependence on China. However, the biggest hurdle remains the issue of Brazilian beef imports. According to the Nikkei, members of the ruling Liberal Democratic Party's agricultural faction expressed during discussions with relevant ministries in late April that "beef imports must be strictly limited." Japan has effectively restricted Brazilian beef imports due to concerns over livestock diseases such as foot-and-mouth disease. According to the U.S. Department of Agriculture, Brazil's beef production reached 12.61 million tons last year, surpassing the U.S. as the world's largest producer. Japan's production for 2024 is projected to be only 350,000 tons, making price competition challenging. Despite this, there is a growing sentiment within the ruling party that outright opposition may not be feasible, considering the need for securing energy and critical minerals. A key party official indicated to the Nikkei that while they must consider the party's position, the final decision should be made from a national diplomatic perspective, hinting at a willingness to pursue negotiations. Balancing agricultural protection, economic security, and trade competitiveness will likely determine the direction of the EPA negotiations with Mercosur.* This article has been translated by AI. 2026-05-11 02:44:34 -
Nikkei Hits Record High with 3,320-Point Surge Japan's stock market recorded its largest single-day gain on the first trading day after the Golden Week holiday. The Nikkei 225 index closed on May 7 at 62,833.84, up 3,320.72 points (5.58%), setting a new record. During trading, it briefly surpassed 63,000 for the first time. This increase exceeded the previous record gain of 3,217 points following the 'Black Monday' crash in August 2024. However, the percentage increase did not rank among the top 20 in history due to the high index level. The surge was attributed to a rally in U.S. tech stocks and optimism that tensions between the U.S. and Iran might ease. AI and semiconductor stocks drove the market higher, with SoftBank Group hitting its upper price limit. Kioxia Holdings saw a massive influx of buy orders, closing at 43,410, up 7,000 points (19.22%), boosting its market cap to 23.7 trillion yen, making it the sixth largest on the Tokyo Stock Exchange. The occurrence of stop-go trading for stocks exceeding 1 trillion yen in market cap is unusual. Advantest and Tokyo Electron also performed strongly, with Tokyo Electron reaching a new high adjusted for stock splits. Analysts noted that positive news accumulated during the holiday period contributed to the market's performance. The Nasdaq and Philadelphia Semiconductor Indexes reached new highs, and AMD reported first-quarter profits nearly double those of the previous year. Kioxia's joint venture with SanDisk also reported strong results, prompting a nearly 30% stock price increase. Goldman Sachs raised its 2028 operating profit forecast for Samsung Electronics to 494 trillion won, significantly higher than the 2025 forecast for Toyota Motor Corporation. FOMO Grows Amid AI and Semiconductor Rally Investor anxiety about missing out on the AI and semiconductor rally intensified. Takayuki Ishibashi, a vice president at Goldman Sachs, stated, "There is a strong fear of not holding AI and semiconductor stocks." The market is seeing a trend where rising stocks continue to climb. Increased buying linked to index futures and trend-following foreign funds contributed to the rapid rise, as investors who had sold call options for hedging prior to the holiday began to buy back, accepting losses. Easing oil prices due to reduced Middle East tensions also alleviated inflation concerns, creating a favorable environment for growth stocks. The upward trend was not limited to large tech stocks. The TOPIX index rose 111.76 points (3.00%) to close at 3,840.49, while the JPX-Nikkei 400 gained 1,079.04 points (3.18%) to finish at 35,060.73. Trading volume on the Tokyo Stock Exchange's Prime Market reached 10.84 trillion yen, the highest since the market's inception in 2022. Approximately 75% of stocks rose, totaling 1,190 gainers. However, some domestic stocks, including trading companies and pharmaceuticals, faced selling pressure, and INPEX declined as oil prices stabilized. Nintendo experienced selling pressure due to concerns over rising memory semiconductor costs. However, signs of market overheating are evident. The NT ratio, which divides the Nikkei index by the TOPIX, reached a historic high of 16.3, indicating an unprecedented concentration of large-cap stocks in the market. The deviation from the average over the past 25 trading days also exceeded the typical 5% threshold considered 'overheated.' Nomura Securities noted that past trends suggest the Nikkei's rise may not be sustainable. Hideyuki Ishiguro, chief strategist at Nomura Asset Management, remarked, "A market concentrated in specific stocks is unlikely to last long." Takatoshi Itoshima, a strategist at Pictet Japan, expressed hope for a rebound in cyclical stocks like automobiles and banks, which are more influential on the TOPIX, as geopolitical risks recede. For the Nikkei to maintain its momentum beyond AI and semiconductor stocks, broader buying interest is essential.* This article has been translated by AI. 2026-05-07 23:23:48 -
U.S. Treasury Secretary Bessent to Visit Japan Ahead of China Trip for Yen Talks U.S. Treasury Secretary Scott Bessent plans to visit Japan ahead of a trip to China and is expected to meet separately with Prime Minister Sanae Takaichi, Finance Minister Satsuki Katayama and Bank of Japan Gov. Kazuo Ueda, Japanese media reported. The talks would come soon after Japan’s government and central bank carried out large-scale yen-buying intervention, drawing attention to whether U.S.-Japan coordination on the weak yen will deepen. The Nikkei newspaper reported May 7, citing multiple U.S. and Japanese diplomatic sources, that Bessent will visit Japan for three days starting May 11. The stop is scheduled ahead of his attendance at a U.S.-China leaders’ summit in Beijing on May 14-15. Nikkei said plans are being coordinated for Bessent to hold separate meetings on May 12 with Takaichi, Katayama and Ueda. The agenda is expected to include the weak yen as well as economic security issues such as rare earths and energy procurement, Nikkei reported. It said Iran could also come up, amid worsening conditions in the Middle East. The visit is notable because it follows Japan’s foreign-exchange intervention. Japan’s government and the BOJ stepped into the market on April 30 for the first time in 1 year and 9 months, buying yen and selling dollars. The yen had weakened to the 160.70 yen range per dollar before rebounding sharply to the 155 yen range after the intervention. The U.S. Treasury told Nikkei it is “in close contact with Japan,” a comment some interpreted as a signal Washington is effectively tolerating Japan’s response in the currency market. With the Trump administration arguing for the need for a weaker dollar, Nikkei described Bessent as sensitive to speculative yen selling, which can weaken the yen while strengthening the dollar. Nikkei also reported that a “rate check” conducted by the U.S. Treasury in January was led by Bessent rather than requested by Japan. While rising interest rates typically support the yen by making yen assets more attractive, the yen has recently weakened even as rates have risen, a sign speculative moves are intensifying. The U.S. is watching closely because the trend could spread to selling of U.S. Treasurys, Nikkei reported. Tension over 160 yen per dollar Currency markets have remained on edge over the possibility of further Japanese intervention. On the afternoon of May 6, during a holiday period, the yen jumped about 2.80 yen in roughly 30 minutes, from around 157.80 per dollar to about the 155 yen level. Similar spikes occurred on May 1 and May 4, fueling speculation that Japan’s government and the BOJ may have intervened again during the holidays. Some market participants believe the level authorities are trying to defend has shifted from the 160 yen range to the 157 yen range. The April 30 intervention occurred around 160.70, but the starting points for the three subsequent spikes on May 1, 4 and 6 were all in the 157 yen range. Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities, told Nikkei, “The final line of defense is 160 yen, but it looks like they are also trying to protect the 157 yen range as a first line.” Rikiya Takebe, a senior strategist at Okasan Securities, said authorities may try to manage the dollar-yen rate in the 150-155 yen range. The intervention is also believed to have been sizable. In a BOJ forecast released May 1 for current account balances dated May 7, the category reflecting FX intervention, labeled “fiscal and other factors,” showed a decline of 9.48 trillion yen (about 88 trillion won). That was far larger than the 4 trillion to 4.5 trillion yen decline estimated in advance by short-term money market firms on the assumption there was no intervention. Nikkei said the difference — about 5 trillion yen (about 46.42 trillion won) — is likely the scale of the yen-buying intervention on April 30. Ahead of the move, Japanese officials issued unusually strong warnings. Katayama said before the intervention, “The time is nearing to take decisive action,” and top currency diplomat Atsushi Mimura called it “effectively the final warning.” Hiroyuki Machida, a director at Australia and New Zealand Banking Group, told Nikkei authorities may have tried to amplify yen buying by raising market vigilance before stepping in. Still, it is unclear whether intervention alone can reverse the yen’s broader weakness. With oil prices elevated amid Middle East instability, pressure to sell yen and buy dollars persists, reflecting Japan’s widening trade deficit. Hirofumi Suzuki, chief FX strategist at Sumitomo Mitsui Banking Corp., told Nikkei it is too early for yen strength below 155 per dollar to take hold without a change in the macro environment, adding that downward pressure toward 158 yen is stronger. Against that backdrop, Bessent’s Japan visit is expected to test how closely Washington and Tokyo align on the weak yen and market intervention. As Japanese authorities continue a cat-and-mouse game with markets even during holidays, how far the United States will tolerate Japan’s defense of the yen is emerging as a key variable for currency markets, Nikkei reported.* This article has been translated by AI. 2026-05-07 13:54:17 -
Japan Begins Talks to Export Used Destroyer Escorts to the Philippines Japan has begun full-scale talks with the Philippines on exporting used Maritime Self-Defense Force destroyer escorts, the first such ship-export discussions since Tokyo effectively allowed exports of defense equipment with lethal capability last month. The move comes as Japan accelerates defense sales and security ties in Southeast Asia, raising the prospect of competition with South Korean defense firms. The Yomiuri Shimbun, Nikkei and Asahi Shimbun reported Tuesday that Japanese Defense Minister Shinjiro Koizumi met Monday in Manila with Philippine Defense Secretary Gilberto Teodoro. They agreed to set up a working-level group to discuss exporting used MSDF destroyer escorts and signed a joint statement to expand cooperation on defense equipment and technology. The ships under consideration include the Abukuma-class destroyer escorts, a six-ship class commissioned from 1989 to 1993. The multipurpose vessels can carry anti-submarine and anti-ship missiles and torpedoes. With more than 30 years in service, Japan’s Defense Ministry is moving to retire them in stages. The working group will also discuss the transfer of the MSDF’s TC-90 training aircraft, along with training, maintenance and operations support. The talks follow Japan’s April 21 revision of guidelines for its “Three Principles on Transfer of Defense Equipment and Technology,” which had limited exports to five categories — rescue, transport, warning, surveillance and minesweeping — known as the “five types.” With that restriction removed, exports of destroyer escorts with lethal capability became possible in principle. Asahi said that if the export is realized, it would be the first case since the rules were eased. Koizumi said the revision would “further strengthen Japan’s contribution to peace and stability in the region and the world,” and Teodoro expressed support and expectations, the reports said. Japan and the Philippines have been tightening security cooperation amid China’s expanding maritime activities. In their joint statement, the two sides named China and said they shared “serious concerns” about “coercive activities” in the East China Sea and South China Sea. They also reaffirmed strong opposition to attempts to unilaterally change the status quo by force. Nikkei said the cooperation could extend beyond arms exports to Japan’s broader strategic posture. If the Philippines adopts Japanese destroyer escorts, Japan could build local facilities capable of maintaining MSDF ships, expanding its operational base in Southeast Asia. It could also help disperse MSDF forces in an emergency, the paper said. Japan has rapidly expanded security cooperation with the Philippines. Coastal surveillance radar provided through Japan’s Official Security Assistance program has been deployed in the Philippines this year, and the two sides are coordinating a possible export of information processing and command-and-control systems, Asahi reported. The Philippines is also said to be interested in the Ground Self-Defense Force’s Type 03 medium-range surface-to-air missile, which intercepts enemy aircraft and cruise missiles. Institutional hurdles remain before any ship transfer. The Philippine side is reported to want a free or low-cost transfer, which would require revising Japan’s Self-Defense Forces law. Yomiuri and Asahi said the Japanese government plans to pursue legal changes in next year’s regular Diet session. Japan’s push to broaden security ties is not limited to the Philippines. Prime Minister Takaichi held a summit in Australia on Sunday and agreed to proceed smoothly with a project to jointly develop new Australian Navy ships based on an improved version of Japan’s Mogami-class destroyer escort. Also Sunday in northern Philippines, the Self-Defense Forces took part in a large-scale U.S.-Philippine exercise, Balikatan, in what was described as its first full participation. A total of 17,000 personnel from seven countries — Japan, the United States, the Philippines, Australia, New Zealand, France and Canada — joined the drills, with Japan dispatching about 1,400 troops. As Japan expands defense exports, some analysts see likely competition with South Korea’s defense industry. Renato De Castro, a professor at De La Salle University in the Philippines, told Asahi that Japanese products are expensive and that South Korean firms already have a foothold in the Philippines, making competition unavoidable. He also cited the challenge of building maintenance systems for exported weapons. South Korea has expanded defense cooperation with the Philippines by exporting FA-50 light attack aircraft and warships, among other items. In Japan, critics have also voiced concern about a government more willing to export weapons. Asahi reported that at a pro-constitution rally held Saturday on Japan’s Constitution Memorial Day, Japanese Communist Party leader Tomoko Tamura criticized Japan for becoming a “merchant of death” nation. Some participants also warned that Japan’s postwar principle of exclusively defense-oriented policy under its pacifist constitution is being undermined.* This article has been translated by AI. 2026-05-06 16:57:20 -
Honda Freezes Canada EV Plant Plan Indefinitely as North America Outlook Shifts Honda has decided to freeze indefinitely its plan to build an electric vehicle and battery manufacturing complex in Canada, as uncertainty grows in North America amid slowing U.S. EV demand and a policy shift by President Donald Trump’s administration. Nikkei reported Tuesday that Honda has effectively halted the project in Ontario and has begun talks with the Canadian government. The company is also said to be considering scrapping the plan altogether depending on the policy environment in North America. The project, which includes an EV plant and a battery plant, was valued at 15 billion Canadian dollars (about 16 trillion won). It was planned to have annual capacity of about 240,000 vehicles, and land acquisition and discussions on government support were largely underway. Honda had aimed to start operations in 2028, but delayed the start by about two years in May last year as EV growth fell short of expectations. It has now opted for an open-ended freeze. The move signals a broader reset of Honda’s North American EV strategy. In March, Honda announced it would stop developing a flagship EV for the U.S. market and said it planned to book losses of up to 2.5 trillion yen (about 22 trillion won), while formally shifting emphasis away from EVs and toward hybrid vehicles. This time, the pullback extends to production-site investment. The shift is also affecting partnerships. Sony Group’s EV joint venture with Honda, Sony Honda Mobility, announced in March that it would halt development of its standalone EV, the Afeela. On April 21, it decided to reassign about 400 employees back to the two parent companies. Nikkei said the venture judged profitability would be difficult as Honda revised its EV strategy, describing the effort as a reorganization that is effectively “starting over.” Disappearing U.S. IRA benefits Nikkei pointed to U.S. policy changes as a key factor. The previous Joe Biden administration spurred North American EV investment competition after introducing EV purchase tax credits under the 2022 Inflation Reduction Act. But President Trump abolished the EV tax credit and, late last year, eased average fuel economy rules for automakers. With less pressure to expand EV output, automakers are adjusting strategies. U.S. sales data show the slowdown. Cox Automotive said U.S. EV sales last year fell 2% from a year earlier to 1.27 million vehicles, and fourth-quarter sales plunged 36% from the same period a year earlier. Hybrids have gained ground: Nikkei said hybrids accounted for a record 19% of U.S. new-vehicle sales in the fourth quarter. Honda has already formalized its pivot toward hybrids and plans to end production of its North America EV, the Prologue, in the second half of 2026. That would temporarily leave Honda without an EV in its U.S. lineup. The decision is expected to ripple into South Korea’s battery industry. Honda has been building an EV-only battery plant with LG Energy Solution, but is reported to be considering converting it for hybrid vehicles and energy storage systems. Honda is not alone. Nissan Motor has halted plans to produce two EV models in Mississippi, and Ford has announced it would stop producing a key pickup-truck EV while planning to reflect special losses of up to $19.5 billion. General Motors also decided last year to cut about 3,300 jobs at its U.S. EV and battery plants. Still, some analysts say the EV market overall has not turned down. MarkLines said global sales of EVs and plug-in hybrids last year rose 18% from a year earlier to 18.12 million vehicles. In China, more than half of new-car sales are EVs, reflecting continued growth. Nikkei said North America’s EV market has entered a stagnant phase, but the global market is still expanding, adding that how Honda rebuilds its EV competitiveness will be a key challenge.* This article has been translated by AI. 2026-05-06 15:21:17 -
Japan’s Takaichi Makes First Australia Trip as Leaders Move Ties Toward ‘Quasi-Allies’ Japanese Prime Minister Sanae Takaichi met Australian Prime Minister Anthony Albanese in Canberra on May 4 (local time) and agreed to broaden cooperation across defense, economic security, energy and cyber issues, Japanese media reported. It was Takaichi’s first trip to Australia since taking office and came in the 50th year since the two countries signed the Japan-Australia Basic Treaty of Friendship and Cooperation. Takaichi said the two nations were building ties that could be described as “quasi-allies.” Japanese outlets highlighted defense cooperation. Australia in April selected an upgraded version of Japan’s Maritime Self-Defense Force Mogami-class destroyer escort as its next navy frigate. The Yomiuri Shimbun reported that of 11 ships to be deployed, three will be built in Japan and eight in Australia. The arrangement would expand production and maintenance hubs to Australia and strengthen the two countries’ ability to sustain operations. Quoting a Japanese Defense Ministry official, the paper said operating the same ships would allow joint crew training and enable operations on a shared foundation of unit practices. The Nikkei said the deal is tied to Japan’s shift in defense exports. In April, the Japanese government abolished “five-category” restrictions that had limited exports of lethal defense equipment. If the upgraded Mogami-class ships are produced in Australia, it could also support future supply to allies and partners. Yomiuri quoted Australian Defense Minister Richard Marles as saying, “There is no country in the world that is as strategically aligned as Japan.” After the talks, the leaders issued a “leaders’ statement on enhanced defense and security cooperation,” listing seven priority areas including intelligence collection and analysis, joint development of defense equipment, cooperation to maintain supply chains, and securing sea lanes. With Australia a member of the Five Eyes intelligence-sharing group with the United States and Britain, Japanese media said closer intelligence ties could also aid Takaichi’s push to create a “National Intelligence Agency.” The leaders also agreed to establish a “strategic cyber partnership.” On economic security, the two signed a “Japan-Australia joint declaration on economic security cooperation” and released two joint statements on critical minerals and energy security. The declaration cited “strong concern” about export restrictions, particularly on critical minerals, and said critical minerals would be elevated as a “core pillar” of the bilateral economic security relationship, in a move aimed squarely at China’s rare earth export controls. Japanese media linked the summit to shifting U.S.-China dynamics. The Asahi Shimbun reported that the Trump administration has promoted a Western Hemisphere-first “Monroe Doctrine” approach and that some U.S. forces previously deployed to the Indo-Pacific moved to the Middle East, raising concerns about a “power vacuum.” Yomiuri reported that an amphibious assault ship from the Sasebo base and Marines stationed in Okinawa were dispatched to the Middle East, quoting a Japanese government official as saying cooperation among friendly nations is important to avoid making China think “now is the chance.” Takaichi told the meeting that cooperation with the United States, a shared ally, is indispensable amid a severe international environment, while also making clear Japan would strengthen multilateral coordination such as Japan-U.S.-Australia and Japan-U.S.-Australia-India frameworks, based on ties with Australia. Australia is also grappling with uncertainty over the United States, Yomiuri said. Australia announced in April it would raise defense spending as a share of gross domestic product to 3% by 2033 from about 2.8%, but that remains below the 3.5% sought by the United States. The paper said the Trump administration at one point signaled it would review AUKUS plans for Australia to deploy nuclear-powered submarines, stirring concern in Australia. China is another pressure point. Nikkei reported that after experiencing economic coercion such as China’s restrictions on coal imports during the early 2020s COVID-19 period, Australia shifted policy toward reducing dependence on China. In 2025, a Chinese naval flotilla conducted live-fire drills in the Tasman Sea between Australia and New Zealand, raising regional tensions, the paper said. Australia’s national defense strategy released in April said China’s growing national power and military buildup are major drivers reshaping the regional security environment. Michael Green, head of the United States Studies Centre at the University of Sydney, told Asahi that Australia’s Labor government is trying to redefine the United States from a partner that “shares common values” to one that “shares interests.” He urged strengthening Japan-U.S.-Australia security cooperation to boost deterrence and diversifying supply chains to reduce risks from dependence on China.* This article has been translated by AI. 2026-05-05 14:03:20 -
Japan Airlines’ Mileage Programs Tested as Fuel Surcharges Surge Japanese airlines’ mileage businesses are facing a key test as a surge in global oil prices drives up the real cost of award tickets and pushes carriers to tighten program rules. According to the Nikkei business daily, All Nippon Airways and Japan Airlines sharply raised international fuel surcharges for tickets issued starting May 1, after jet fuel prices jumped following the effective closure of the Strait of Hormuz. On one-way flights from Japan to Europe, ANA raised its surcharge from 31,900 yen to 56,000 yen, while JAL lifted its fee from 29,000 yen to 56,000 yen. Some routes saw increases close to double. The higher charges also hit travelers using miles. For example, a June round-trip economy award ticket between Tokyo and London previously required about 55,000 miles plus about 100,000 yen in additional payments, but now requires about 150,000 yen. Even with miles, the cash outlay has risen sharply, weakening the appeal of “bonus” tickets. Mileage programs were designed to secure loyal customers, expanding rapidly after their introduction in the 1990s by allowing points earned from flight distance to be redeemed for tickets. ANA surpassed 10 million members within seven years of launching its program. Over time, miles became a broader revenue model tied to finance and retail, as card and insurance companies bought miles to offer as customer perks and more consumers accumulated miles without flying. For airlines, mileage operations can be a high-margin business: miles sold externally trade at higher prices than general-purpose points, while redemptions are concentrated on the airline’s own tickets. JAL’s mileage, card and other businesses in finance and e-commerce posted EBIT of 45.5 billion yen for the fiscal year ended March 2026, about 20% of the total. The segment’s profit margin was 20%, far above the airline’s core aviation business at 9%. Still, the model is harder to sustain if earning grows while redemption becomes more difficult. Complaints have risen that seats are hard to book even with miles, as award inventory has tightened, especially in business and first class. With fuel surcharges also climbing, Nikkei said the perceived value of miles is falling quickly. Airlines are responding. ANA said it will tighten requirements for premium member card benefits starting in fiscal 2028, restricting some perks such as lounge access if annual spending via ANA cards and smartphone payments falls below 3 million yen. Previously, once status was obtained, members could keep benefits by paying the annual fee; the new structure will require a minimum level of spending. The change is expected to affect Japan’s culture of pursuing elite status, often referred to domestically as “mile runs.” Carriers are also continuing to expand ways to earn miles. JAL recently invested in online life insurer Lifenet Insurance and said it will consider developing insurance products that accrue miles. But industry observers warn that expanding earning opportunities may have limited pull if redemption value keeps eroding. The central challenge, the report said, is restoring the value of using miles. Airlines are considering broader redemption options, including low-cost carriers and non-aviation services, but the report said there is no fundamental solution without making award tickets attractive again. With oil prices adding pressure, Japan’s airline mileage businesses built over more than three decades are at a structural turning point.* This article has been translated by AI. 2026-05-04 14:06:20 -
SoftBank Partners With South Korea’s Cosmos Lab on Zinc-Halogen Batteries for Data Centers SoftBank of Japan is moving into next-generation batteries that do not rely on rare metals, partnering with South Korean deep-tech startup Cosmos Lab, founded in 2021. The Nikkei business daily reported on Monday that SoftBank and Cosmos Lab plan to jointly develop a “zinc-halogen battery” and begin mass production during fiscal 2027. The production base will be set up at the Sakai plant site in Osaka once owned by Sharp, which SoftBank acquired in 2025. Nikkei said SoftBank plans to include entry into next-generation battery manufacturing in a new medium-term management plan to be announced in May, with a long-term goal of building the business into a new pillar generating annual sales of 100 billion yen (about 9.2 trillion won). The new battery uses zinc for the anode and a halogen compound for the cathode, instead of rare metals such as lithium and cobalt. Nikkei said both materials are easy to procure in Japan, improving cost competitiveness. A key advantage is that the electrolyte uses water rather than an organic solvent, making the risk of ignition “almost nonexistent in principle,” the report said, a potential differentiator as safety concerns have grown after a series of energy storage system fires. Zinc-based batteries, however, typically have a shorter lifespan than lithium-ion batteries. During charging and discharging, dendrites can form on the electrode surface, accelerating degradation. Nikkei reported that Cosmos Lab improved this limitation with a proprietary technique that suppresses crystal formation by creating microscopic holes in the electrode. Further development to raise energy density is also planned. SoftBank plans to first apply the batteries to a large data center it is building in Sakai to verify performance, and then decide whether to proceed with full-scale mass production. It also aims to expand use to factory and home energy storage systems and renewable energy storage. Nikkei said SoftBank is considering investing several tens of billions of yen by 2030 to expand production capacity to more than 1 gigawatt-hour. That would be enough to produce more than 100,000 home energy storage units a year and would make it Japan’s largest plant, the report said. Cosmos Lab, based in Siheung, Gyeonggi Province, has been developing “water battery” technology using water-based electrolytes, which is seen as a way to improve safety while reducing dependence on rare metals. SoftBank has tested next-generation batteries through development of high-altitude platform stations, or HAPS, unmanned aircraft that provide communications links with the ground. In 2021, it also built a next-generation battery evaluation and verification facility in Tochigi Prefecture. Nikkei said the partnership with Cosmos Lab signals a push toward commercialization that also envisions supplying batteries outside the company. The report linked the move to Japan’s “sovereign AI” strategy. SoftBank has promoted domestic production of “technologies that support AI operations,” including AI semiconductors and next-generation communications base stations. Nikkei said the effort also reflects a push to secure data center energy storage systems through supply chains in Japan and allied countries, while reducing reliance on China, which holds a dominant share in rare-metal mining and refining. Zinc-based batteries are also being pursued in Japan by manufacturers such as FDK and by universities including Hokkaido University and Tohoku University. Nikkei said SoftBank’s decision to work with a new Korean startup highlights intensifying competition for technological leadership in the next-generation energy storage market.* This article has been translated by AI. 2026-05-04 09:54:00