Australia-Japan News | April 2022

Australia-Japan News | April 2022

This page collates links to interesting articles that provide a picture of what is happening in Japan and in the Australia-Japan relationship, with brief summaries of their content.

While we don’t claim this list to be comprehensive, and some of the articles may be behind paywalls, we hope it will evolve into a valuable resource that assists members and subscribers in keeping up to date and provides a record of key developments… make sure to check back regularly to see the latest.

The April archive is below.

You can also view: December 2021 | January 2022 | February 2022 | March 2022 | May 2022 | June 2022 | Current month

* indicates the article is behind a paywall.

APRIL 2022
Japan, Australia Foreign Ministers share concerns about China-Solomon Islands security pact

On 28 April, Japanese Foreign Minister Yoshimasa Hayashi and his Australian counterpart Marise Payne talked over the phone and shared their concerns about a security cooperation agreement formed by China and the Solomon Islands earlier this month. The Ministers shared their concerns on implications it may have on the security of the entire Pacific region and agreed to relay their shared stance to the Solomon Islands in an appropriate manner. Hayashi and Payne also agreed Japan and Australia will continue to further deepen their cooperation in the Pacific Islands region along with other like-minded countries. To that end, they agreed to use occasions such as the Quad summit, which is expected to take place on 24 May in Japan. Read more >

More Japanese companies are pulling out of Russia

A recent survey by the Teikoku Databank showed that as of 11 April, 60 (or 36%) of the 168 listed Japanese companies doing business in Russia had decided to pull out or cease operations in the country, up from 37 (or 22%) in the previous survey released in mid-March. Three companies said they would withdraw from Russia. There were no companies that planned to do so in the March survey. A spokesperson from Teikoku Databank said the exodus of Japanese firms from Russia will likely continue. Read more >

Japan PM Kishida seeks to ease inflation pain with $48bn package*

Japanese Prime Minister Kishida announced on 26 April a 6.2 trillion yen (US$48.2 billion) emergency economic package to ease the impact of surging prices of oil and other commodities. Of the 6.2 trillion yen, 1.5 trillion yen will be spent on raising the current subsidy for oil wholesalers to 35 yen per litre from 25 yen per litre to bring down retail gasoline prices. The average retail price of gasoline was 173.5 yen per litre as of 18 April. 1.3 trillion yen will support low-income families with children through a 50,000 yen handout for each child. Another 1.3 trillion yen will be used to further lower the interest rate on loans for small and midsize companies. A senior economist at NLI Research Institute said the impact of rising commodity prices has been amplified by the weakening yen. Economists say inflation will lower consumer purchasing power as it hits the real wages of households. The average monthly wage was 307,700 yen in 2020, barely changed from 305,800 yen in 2001, according to the Ministry of Health, Labour and Welfare. *Read more >

Japan logs 5.4 trillion yen goods trade deficit in FY 2021

Japan posted a goods trade deficit of 5.4 trillion yen (US$42.4 billion) in fiscal 2021 (ended in March 2022) after logging a surplus the previous year, according to a preliminary report released by the Ministry of Finance Japan on 20 April. The fiscal year deficit of 5.4 trillion yen was the highest since fiscal 2014. Imports grew 33% from the previous year on high oil, coal and gas prices. Exports jumped 24% as auto exports as well as those of iron and steel products rose with the economy gradually recovering from the coronavirus pandemic. Meanwhile, in March Japan recorded a goods trade deficit of 412.4 billion yen, reversing from a surplus of 615 billion yen in the same month a year ago and marking the eighth consecutive month of trade deficits. Imports of petroleum from the United Arab Emirates as well as coal and LNG from Australia have increased significantly. An economist at Bloomberg Economics said, “The trade report for March shows yen weakness becoming a real problem for the economy”. Read more >

Shell restarts Prelude as Japan hunts for back-up LNG*

Shell has restarted LNG production and cargo operations at its Prelude floating LNG facility off the coast of north-western Australia after a four-month shutdown due to major safety problems, indicating an increase in Australian gas shipments to Japan. Japan’s INPEX is one of Shell’s partners, holding a 17.5% stake in the project. Japan is looking to secure alternative gas suppliers in preparation for potential supply disruptions from Russia, and Japan’s LNG imports from Australia have already increased this year even as its total imports decline. According to Graeme Bethune, CEO of EnergyQuest, Japan has overtaken China this year to become the biggest buyer of Australian LNG once again, with 120 cargoes delivered in the March quarter, while 80 cargoes were delivered to China. Credit Suisse energy analyst Saul Kavonic said he expects Japan is in the process of transforming its entire LNG procurement strategy following the Ukraine crisis. Japan needs to secure long-term LNG volumes including from new projects starting in the second half of this decade, according to Mr Kavonic. *Read more >

Japan’s population plummeted by 640,000 in 2021 for biggest drop on record

The Ministry of Internal Affairs and Communications of Japan’s data shows Japan’s population totalled 125,502,000 as of October 2021, down 644,000 from a year earlier, marking the nation’s biggest fall on record. The population fell for the 11th consecutive year. Tokyo’s population fell by 38,000 to 14 million, recording a decline for the first time in 26 years. All 47 prefectures except Okinawa recorded a fall. The Ministry reported that the proportion of population aged 15-64 (working age) reached a record low of 59.4%, while the proportion of population aged 65 or over hit a record high of 28.9% and the population aged 14 or younger accounted for a record low of 11.8%. Read more >

Osaka Gas backs ambitious ‘Desert Bloom’ hydrogen project*

Osaka Gas will be providing technical support to a US$10.75 billion green hydrogen project in the Northern Territory desert. The project, Desert Bloom Hydrogen, uses a unique technology to extract water from the air and use solar power to split the water to make green hydrogen using 2-megawatt production units. The project’s developer, Aqua Aerem and Osaka Gas signed a joint development agreement 12 April. Under the agreement, Osaka Gas will provide project management, engineering and technical support, as well as manage sales and negotiate with equipment manufacturers.  Aqua Aerem aims to produce green hydrogen at an export price of less than $2/kg within 5 years. The Northern Territory government awarded the project “major project” status in December. *Read more >

Northern Territory of Australia and NEC Sign MoU to Grow the Territory’s Digital Capabilities

NEC Australia and NEC Corporation signed a memorandum of understanding (MoU) with the Northern Territory Government to develop a sustainable innovation ecosystem and help grow the Territory’s digital capabilities. The MoU will enable the parties to identify major areas for digital development in the Territory and explore NEC’s advanced technologies such as submarine cable systems, Open-RAN 5G and artificial intelligence. NEC is one of the largest employers (currently 187 full-time staff) in the Territory outside of Government and contributes to the local economy. Read more >

Japan and Australia sign technical arrangement on aviation maintenance

Ministry of Land, Infrastructure, Transport and Tourism (MLITT) of Japan announced 8 April Japan Civil Aviation Bureau (JCAB) and Australia’s Civil Aviation Safety Authority (CASA) had signed a technical arrangement on aviation maintenance on 25 March. Effective from 24 May, the agreement will allow reciprocal acceptance of approvals for MRO (maintenance, repair, and operations) of aircraft equipment and components between JCAB and CASA. Japan also has a technical arrangement on aviation maintenance with Canada and Singapore. MLITT plans to sign similar agreements with the U.S. and EU. Read more >
MLITT’s press release about this announcement (in Japanese)

Fujitsu Australia Signs First Renewable Energy PPA With CWP Renewables

AJBCC member Fujitsu Australia announced 7 April it has signed a power purchase agreement (PPA) for a term of 10 years sourcing renewable energy through CWP Renewables’ Sapphire Wind Farm (largest operational wind farm in NSW). From 30 June 2022, the PPA will offset around 30,000 tonnes of Fujitsu Australia’s carbon emissions each year and provide renewable electricity equivalent to around 40% of its NSW data centre load or about 30% of Fujitsu’s annual Australian electricity consumption. The agreement is the largest PPA undertaken in the Fujitsu Group. Read more > 

Japan faces 1st current-account deficit in 42 years if oil hits $130*

With soaring energy prices, Japan’s current-account balance could go into deficit for the first time in 42 years. The Nikkei NEEDS model shows Japan’s deficit could reach 16 trillion yen (US$130 billion) for fiscal 2022 if crude oil bounces back to $130 a barrel and the yen trades at 120 against the dollar. Preliminary balance-of-payments data released by Japan’s Ministry of Finance on 8 April shows a 1.65 trillion yen current-account surplus for February, down 42.5% on the year but back in the black after two months of deficits. Historically a weak yen was regarded as favorable for increasing Japan’s exports of autos and other products. The Nikkei model shows a weaker currency now means a larger trade deficit because manufacturers moved production abroad during past periods of yen strength. Japan’s worsening current-account balance could push yen selling further. Companies are already exchanging yen for dollars to pay for commodities. Importers selling yen for dollar funds is “a root cause of the yen’s accelerating depreciation,” according to a bank executive*. *Read more >

Japan to phase out coal imports from Russia, add sanctions*

Prime Minister Kishida said at a press conference on 8 April Japan would implement additional sanctions against Russia over alleged war crimes in Ukraine. The additional sanctions include banning imports of coal, banning imports of Russian products such as vodka, wood and machinery, and freezing assets of Russia’s largest lenders Sberbank and Alfa Bank. The five pillars of sanctions also include adding around 400 individuals and 20 organizations to Japan’s asset freeze targets and banning new investments in Russia. Kishida’s announcement came shortly after the Ministry of Foreign Affairs announced it will expel 8 Russians including diplomats stationed in Japan (Russia’s Ambassador to Japan, Galuzin is not included), joining similar moves by the U.S. and European nations. In addition to phasing out coal imports from Russia, Kishida said Japan will also reduce its reliance on Russian oil in line with a G-7 statement released on 7 April. Russian fuel coal accounted for about 13% of the total used for power generation in Japan in 2021. Coal-fired thermal power is one of the major electricity sources following the 2011 Fukushima Daiichi disaster. Australian coal will likely be among alternative sources to replace Russian imports for Japan. *Read more >

Japan to lift COVID nonresident foreigner entry ban for 106 nations

The Japanese government said Wednesday 6 April it would lift the entry ban on 106 countries including the U.S., the U.K., France and India from 8 April, however foreign tourists remain banned from entering Japan. Foreign students, researchers and business travellers will continue to be able to enter the country. Chief Cabinet Secretary Matsuno announced Japan will raise the daily cap on overseas arrivals to around 10,000 starting from 10 April. On 7 April, Japan recorded around 55,000 new infection cases, and Prime Minister Kishida said there are “signs of a resurgence” in coronavirus infections in the country, particularly among young people.
Information about entering into Japan (Updated on 7 April). Read more >

Kanden Realty & Development (KRD) announces land development project in New South Wales, Australia

Kanden Realty & Development (Osaka, Japan) announced 30 March its first land development project in Australia through its newly established local entity Kanden Realty & Development Australia Pty Ltd. The company will be engaged in the Rouse Hill Heights residential community project located in Sydney’s North West, Rouse Hill, which is currently being developed by Legacy Property, a Sydney-based residential real estate development company. This is the KRD’s first overseas residential land development project, and the company plans to further expand its presence in Australia, including apartment projects and projects across the country.  Read more >

Marubeni Participates in Stage 3 of the Gold Coast Light Rail PPP

Marubeni Corporation reached financial close on the procurement of Stage 3 of the Gold Coast Light Rail PPP on 30 March. Marubeni retains a 30% interest in the project as an investor in GoldlinQ Holdings, who has delivered the design, construction, finance, operations and maintenance of the project since the Stage 1 procurement in 2011. The Stage 3 project will extend the current light rail network with a 6.7km extension to the south, adding additional 8 stations to the network. Marubeni also participates in other transportation and social infrastructure PPP business in Australia such as Sydney Metro Northwest and the Sydney Metro City and Southwest Projects. Read more >

NTT ties up with Australian fund Macquarie in data center investment*

Nippon Telegraph and Telephone (NTT) and Australia’s Macquarie Asset Management announced April 1 they have agreed to enter into a strategic real estate partnership to jointly own data centers across Europe and North America. Under this partnership, Macquarie will acquire a majority of shares in companies that own NTT data centers in Europe and the U.S. for roughly US$816 million, while NTT will maintain stakes of 25%-49%. A portion of NTT assets in the U.S. and Europe will switch to joint ownership with Macquarie, while NTT will operate them. The partnership is designed to ease the investment burden on NTT, allowing faster business expansion. Macquarie will also become a joint investor in new NTT data centers to be set up in North America and Europe. *Read more >

BOJ Tankan: Japan business sentiment takes 1st fall in 7 quarters*

The Bank of Japan’s latest Tankan survey showed 1 April business confidence among large Japanese manufacturers worsened for the first time in seven quarters in March, reflecting increasing concern among companies about surging commodity prices related to Russia’s invasion of Ukraine. The key index measuring among large manufacturers such as automakers and electronic makers dropped to plus 14 in March from plus 17 in December. The index for large non-manufacturers including the service sector came to plus 9, compared with plus 10 in December. Among non-manufacturing industries, telecommunications and information services including software developers, computer game makers as well as telecom carriers performed well, which reflects a continued shift to digital services even after the reopening of the economy.  *Read more >

INPEX, ANZ and Qantas announce carbon farming and renewable biofuels strategic collaboration

INPEX, ANZ and Qantas announced 31 March they have signed an MoU to further evaluate a collaboration project, which brings together carbon farming and renewable biofuels in the Wheatbelt region of Western Australia. The project supports reforestation and decarbonisation using drought-resilient native tree crops, integrated with existing farming systems through working with farmers. The parties have completed an extensive initial assessment of the carbon farming project and they plan to undertake a more detailed feasibility study to produce low-carbon renewable biofuels. Read more >