Japan’s Financial Services Agency plans to approve the country’s first yen-denominated stablecoin as early as this autumn, clearing the way for regulated digital tokens pegged to the Japanese currency. Tokyo-based fintech firm JPYC Inc. will issue the token, known as JPYC, at a one-to-one ratio with the yen and fully back it with bank deposits and Japanese government bonds. The company intends to register as a money-transfer business and aims to place ¥1 trillion ($6.8 billion) of the stablecoin in circulation within three years. The move is expected to expand options for international remittances and other digital payments while potentially lifting demand for government debt used as collateral. It also positions Japan’s financial regulators among the first major authorities to integrate fiat-backed stablecoins into an existing supervisory framework.

Japan has agreed to provide roughly $550 billion in financing—about ¥80 trillion—to help domestic companies expand production and supply networks overseas in industries deemed critical to economic security, including semiconductors, shipbuilding, pharmaceuticals and steel. The investment forms the centerpiece of a new tariff accord with Washington that cuts duties on Japanese goods in exchange for large-scale capital commitments supporting U.S. and allied industrial capacity. Tokyo intends to channel the money through a mix of loans, guarantees and equity stakes, allowing firms to build plants in Southeast Asia, North America and other markets. Officials are designing a monitoring mechanism to ensure projects align with the security interests of both governments and to track returns, according to Japanese media reports. The initiative coincides with a broader U.S. push to shore up its own shipbuilding base. Senators Tammy Duckworth and Andy Kim are touring yards in South Korea and Japan this week to explore joint ventures that could construct and repair auxiliary vessels for the U.S. Navy, underscoring Washington’s reliance on allied expertise. South Korea has separately floated a $150 billion investment in U.S. yards under similar tariff negotiations. Japanese shipbuilders have voiced concern that high U.S. labor costs and stretched supply chains could limit direct investment, highlighting the challenges Tokyo faces in translating the record-size package into concrete projects. Detailed allocation of the funds is expected to be finalized in coming months.

Japanese Prime Minister Shigeru Ishiba has expressed Japan's intention to play a role in providing security guarantees to Ukraine amid ongoing peace talks with Russia aimed at ending the conflict. Ishiba emphasized that Japan will carefully consider legal and capability aspects before fulfilling an appropriate role in the coalition of nations offering these guarantees. This position aligns Japan more closely with NATO's approach to Ukraine's security. The security guarantees are intended to prevent further Russian aggression against Ukraine. Additionally, Japan is reevaluating its longstanding non-nuclear policy, originally established in 1967, with closed-door discussions underway between Tokyo and Washington exploring ways Japan can support U.S. nuclear operations, including surveillance, counter-strike missile deployment, and emergency coordination. This shift has been influenced by former U.S. President Donald Trump's stringent stance on U.S. allies, prompting concerns in Japan and South Korea about the reliability of U.S. security guarantees and accelerating Japan's willingness to reconsider its nuclear posture.

Japan's Ministry of Agriculture, Forestry and Fisheries announced that the average retail price of rice at supermarkets nationwide rose to 3,737 yen per 5-kilogram bag for the week of August 4 to 10, marking a 195 yen increase from the previous week and the largest weekly rise in three years. This price is approximately 1.4 times higher than the same period last year. The price increase is attributed to the arrival of new early-harvest rice, which has reduced the proportion of lower-priced government stockpiled rice (備蓄米) in overall sales. Some stores are selling new rice varieties at prices as high as 5,980 yen per 5 kilograms, while others have refrained from purchasing due to high costs. In response to slow deliveries and logistical delays, the government has decided to extend the sales deadline for government-stockpiled rice sold under discretionary contracts beyond the original August 31 cutoff. About 280,000 tons of the 500,000 tons released under these contracts have been contracted, but roughly 100,000 tons remain undelivered. Agriculture Minister Shinjiro Koizumi emphasized the responsibility to ensure contracted quantities reach the market and announced the extension of the sales period to allow retailers more time to sell the stockpiled rice. The extension aims to prevent further price increases in retail rice, particularly for branded varieties that remain at elevated price levels. The Ministry is also promoting the development of innovative new rice strains and supporting crop diversification to stabilize rice supply. The government’s move to extend the sales deadline reflects challenges in distribution and the ongoing high prices of new rice amid concerns about supply stability.

Japan welcomed an estimated 3.437 million foreign visitors in July, up 4.4% from a year earlier and the highest figure ever recorded for the month, the Japan National Tourism Organization said Wednesday. The tally marks the 18th consecutive month in which arrivals set a new record for the respective month, underlining the strength of the country’s post-pandemic tourism recovery despite a prolonged heatwave. Mainland China remained the largest source market with 974,500 visitors, a 25.5% increase on the year, followed by South Korea at 678,600 visitors, down 10.4%, and Taiwan at 604,200, up 5.7%. Overall growth, however, slowed to its lowest rate this year after social-media rumours of a potential major earthquake deterred travellers, particularly from Hong Kong and South Korea. Total arrivals for the first seven months of 2025 now stand just shy of 25 million, keeping Japan on track for another record year.

Japan’s Ministry of Finance sold ¥606.1 billion ($4.2 billion) of 20-year government bonds on Tuesday, increasing the offer size from ¥600.4 billion at the previous sale. The average yield jumped to 2.581% from 2.482% and the bid-to-cover ratio slipped to 3.085 from 3.146, signalling softer demand. The tail widened to 2.591%, and the secondary-market yield moved up a further 1.5 basis points to 2.59%. The auction result fed into a broader rise across Japan’s yield curve. Ten-year JGBs were last at 1.585% after gaining as much as 2.5 basis points, while the five-year yield touched 1.13%, its highest level since late July. Investors are reassessing the outlook for Bank of Japan policy after veteran Liberal Democratic Party lawmaker Taro Kono said the central bank should begin raising interest rates soon to curb the weak yen and restore positive real borrowing costs. Similar upward pressure was evident in China, where the 30-year government bond yield climbed 4.4 basis points to 2.038%, extending an earlier move that lifted the rate above 2.02%. The simultaneous rise in long-dated yields across Asia underscores expectations that major central banks in the region may have to follow the global shift toward tighter policy.

Japan booked a ¥117.5 billion ($795 million) trade deficit in July, confounding economists who had expected a surplus of almost ¥200 billion, the Finance Ministry said on Wednesday. The shortfall ended a two-month run of surpluses and underlined the hit to the export-led economy from higher U.S. tariffs and soft global demand. Total exports fell 2.6% from a year earlier—the steepest decline since February 2021—worse than the 2.1% drop projected. Shipments to the United States slumped 10.1%, led by a 28.4% slide in automobiles, while exports to China and the European Union fell 3.5% and 3.4%, respectively. Imports contracted 7.5%, a smaller decline than forecast, leaving the overall balance in the red. The weak trade showing contrasted with a rebound in corporate investment indicators. Core machinery orders, a gauge of capital-spending plans, climbed 3.0% in June from the prior month and 7.6% on the year, both far above consensus. Economists said the strength in machinery orders may cushion GDP growth, but the export slump clouds the outlook. The data, released amid a global tech sell-off, weighed on Japanese equities. The Nikkei 225 dropped as much as 1.8% to below 43,000, with chip-related stocks leading losses. SoftBank Group tumbled up to 9% before paring some of the decline. Investors are now awaiting Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later this week for signals on U.S. monetary policy.

Foreign nationals working in Japan are expected to remit a record amount of money overseas in 2025, potentially exceeding 1 trillion yen ($6.8 billion) for the first time. This surge in overseas wire transfers is driven by the expansion of Japan's foreign worker population, with remittances increasing by 38% in the first half of the year compared to the previous period. The Japanese government has maintained a policy of not adopting formal immigration measures, despite actively accepting foreign workers to address severe labor shortages. Experts emphasize the urgency of overcoming the "immigration dilemma" by improving labor and educational environments for foreign workers and their families, and call for national discussions on establishing a fundamental law for foreign worker acceptance. The issue has also become a point of contention in recent political debates, including the Upper House elections.

Japan’s ministries and agencies have closed their preliminary submissions for the fiscal-2026 budget, with general-account requests surpassing ¥122 trillion ($830 billion) for the first time. The figure, which the Finance Ministry will tally in early September, eclipses the current year’s ¥117.6 trillion record amid rising social-security costs and larger interest payments on government debt. Driving the increase is the Defense Ministry’s request for ¥8.8454 trillion, a 4.4% rise that would mark a fourth straight record. The proposal allocates ¥312.8 billion to acquire aerial, surface and underwater drones and sets aside ¥128.7 billion to build a multilayered coastal defense system dubbed “SHIELD,” designed to deploy those unmanned assets by 2027. About ¥1 trillion is earmarked for mass production of long-range stand-off missiles, including hypersonic glide weapons, as Tokyo accelerates a five-year, ¥43 trillion military build-up aimed at countering China and North Korea. Other agencies are also seeking larger envelopes. The Foreign Ministry asked for ¥874.3 billion to bolster disinformation defenses and improve protection for Japanese nationals overseas. The Health, Labour and Welfare Ministry’s medical outlays would rise to roughly ¥48 trillion, while debt-service costs are projected to top ¥32 trillion because of higher long-term yields. The cabinet will negotiate the requests through the autumn before finalising a draft budget in December for submission to the Diet. Economists warn that spending growth continues to outrun Japan’s nominal GDP expansion, underscoring pressure on Prime Minister Fumio Kishida’s government to find new revenue sources or curb expenditures.

Japan’s Ministry of Defense said on 29 August it will deploy ground-launched, extended-range Type-12 surface-to-ship missiles to the Ground Self-Defense Force’s Camp Kengun in Kumamoto in fiscal 2025, with operations to start around March 2026. A second unit will be stationed at Camp Fuji in Oyama, Shizuoka Prefecture in fiscal 2027. It is the first time Tokyo has publicly identified bases for weapons intended to provide what it calls a “counterstrike capability.” The domestically built Type-12 upgrade is designed to fly roughly 1,000 kilometres, enabling strikes on targets far beyond the reach of existing systems. The timetable has been moved forward by about a year and is part of a broader programme that also accelerates deployment of high-speed glide weapons and air- and sea-launched Type-12 variants, to be operated from F-2 fighters at Hyakuri Air Base and the destroyer Teruzuki from fiscal 2027. Officials say the programme will strengthen deterrence against increasing Chinese and North Korean missile and maritime activity near Japan’s southwest islands. Defence analysts note that the missiles’ range places parts of the Chinese mainland within reach, enhancing both deterrence and the risk of retaliation. The ministry has begun briefing local governments to build public understanding of the new deployments.

Japanese Prime Minister Shigeru Ishiba and his Indian counterpart Narendra Modi agreed on a "Japan-India Joint Vision" that sets a goal of mobilising ¥10 trillion (about $68 billion) in Japanese private investment for India over the next decade. The pledge, one of Tokyo’s largest bilateral investment targets, is aimed at expanding manufacturing and infrastructure in areas such as semiconductors, green energy and high-speed rail at a time when New Delhi is seeking to cushion the impact of steep U.S. tariffs. The leaders also committed to facilitating the exchange of 500,000 people within five years. Japan plans to accept 50,000 skilled Indian workers, chiefly in information technology and caregiving, while encouraging reciprocal movement in education, research and industry to deepen economic links and address labour shortages in both countries. On security, Ishiba and Modi revised the 2008 Joint Declaration on Security Cooperation for the first time in 17 years, agreeing to expand defence collaboration, joint training and supply-chain resilience. They announced new economic-security frameworks covering semiconductors, critical minerals and artificial intelligence, underscoring a shared interest in diversified supply chains and a free, open Indo-Pacific.

Japan’s economy expanded by a seasonally adjusted 0.3% in the April-to-June quarter, or an annualised 1%, outpacing economists’ forecasts of 0.1% and marking a fifth consecutive period of growth. Resilient exports, which rose about 2% despite the newly imposed 15% U.S. tariff on Japanese goods, contributed 0.3 percentage points to the quarterly gain and offset soft domestic demand. Finance Minister Katsunobu Kato said the government will accelerate the rollout of tariff-related support measures for companies hit by higher U.S. duties. Kato added that monetary policy remains the purview of the Bank of Japan, expressing confidence the central bank will steer inflation sustainably toward its 2% goal while authorities monitor price trends and industry calls for rate increases. Economy Minister Kenji Akazawa described the latest data as evidence of a modest recovery but cautioned that U.S. trade actions could slice 0.3–0.4% off future output. The Nikkei estimates the tariffs could erase about ¥3.5 trillion ($23 billion) in corporate profits, particularly in the auto and machinery sectors. The stronger-than-expected GDP print offers embattled Prime Minister Shigeru Ishiba a brief respite as he contends with calls to resign following July’s electoral setback.