Japan

• Japanese Prime Minister Sanae Takaichi is scheduled to visit New Delhi on July 2 for summit talks with Indian Prime Minister Narendra Modi. • Takaichi is recognized for her conservative political views, with a specific policy focus on defense, technology, and economic security. • The meeting underscores the strategic importance of the Japan-India relationship in addressing regional security and technological cooperation.

• Japanese Prime Minister Sanae Takaichi is conducting a maiden three-day visit to India for the sixteenth India-Japan Annual Summit. • The leaders aim to discuss expanding security cooperation and the "free and open Indo-Pacific" framework to strengthen regional stability. • A key economic objective of the summit is the exploration of a potential direct yen-rupee trade settlement system.

• Japanese Prime Minister Sanae Takaichi is visiting India to meet with PM Modi, focusing on strengthening economic ties and regional security. • Economic cooperation is significant, with approximately 1,400 Japanese firms operating in India and bilateral trade reaching USD 27.5 billion in fiscal year 2025/26. • Japan's commitment to India is further evidenced by USD 3.2 billion in investments recorded between April and December 2025, with nearly half of Japanese companies focused on manufacturing.

• Japan has announced plans to develop a sovereign AI model and deploy 10 million AI-equipped robots across more than a dozen sectors by 2040. • The government will invest approximately $6 billion in the domestic AI model, which will be created by Noetra, a consortium featuring major firms like Sony and SoftBank. • This initiative aims to reduce reliance on foreign technology and address labor shortages by integrating advanced automation into the national economy.

• Prof Raj Kumar and Shashi Tharoor addressed Japan's National Diet to discuss strengthening the strategic partnership between India and Japan. • The discussions focused on leveraging education and parliamentary diplomacy as key pillars to deepen bilateral ties beyond traditional crisis management. • Shashi Tharoor emphasized that diplomacy should transcend the mere negotiation of interests, advocating for a more holistic approach to international relations.

• Professor C. Raj Kumar, Founding Vice Chancellor of O.P. Jindal Global University (JGU), and MP Dr. Shashi Tharoor addressed the Japanese parliament. • The event took place on the eve of Japanese Prime Minister Sanae Takaichi's official visit to India to strengthen bilateral relations. • This engagement serves to deepen academic and diplomatic ties between India and Japan, highlighting the role of higher education in international cooperation.

• Japan has announced a strategic goal to deploy 10 million AI-powered robots by the year 2040. • The initiative involves significant funding for "physical AI" development to integrate advanced intelligence into robotic hardware. • This move is designed to combat severe labor shortages across several of the country's key economic sectors.

• Japan intends to develop a sovereign artificial intelligence model and deploy 10 million AI-equipped robots across more than a dozen sectors by 2040. • The Japanese government will reportedly invest approximately US$6 billion into the homegrown AI model, which is being developed by a consortium called Noetra. • This initiative aims to reduce reliance on foreign technology and leverage automation to address labor shortages and boost industrial efficiency.

• Japan’s industry ministry has approved ¥387.3 billion in funding to develop a domestic multimodal foundation model specifically for physical AI systems. • The initiative is backed by leading tech firms and aims to enhance robotic intelligence and smarter automation across industrial sectors. • This project matters as it seeks to drive a broad industrial transformation by integrating advanced AI directly into the control systems of robots.

• Japan has launched a major AI initiative, committing up to JPY 1 trillion (approximately US$6.2 billion) to develop a domestic AI foundation model. • The project will be led by a consortium headed by SoftBank, with a specific strategic focus on achieving leadership in "physical AI." • This investment aims to reduce Japan's technological dependence on the US and China while enhancing the nation's global manufacturing competitiveness.

• The ASIFMA 2026 Asia-Pacific Capital Markets Survey has identified the top eight markets in the APAC region for ease of doing business. • Leading jurisdictions include Singapore, Hong Kong, Australia, Japan, India, Taiwan, China Mainland, and South Korea. • The survey highlights 11 key product and service lines targeted for expansion, led by Equities, Fixed Income, FX, Asset Management, and ESG & Sustainability.

• Asian markets showed mixed results as the KOSPI slid following a strong quarter, while Japanese and Chinese markets rose driven by positive Purchasing Managers' Index (PMI) data. • Manufacturing activity remained resilient across Southeast Asia, with Thailand's PMI hitting 53.6 and Malaysia's improving to 50.7, though Indonesia's PMI continued to contract. • In Australia, the S&P/ASX 200 fell 0.6% after building approvals unexpectedly dropped by 1.1% in May, dampening investor sentiment.

• Asian markets diverged on July 1, with Japan's Nikkei 225 rising slightly while South Korea's KOSPI index tumbled over 2%. • Samsung Electronics led the decline in South Korea, plummeting nearly 6%, with SK Hynix and Kioxia also experiencing significant losses. • The downturn in South Korean tech stocks highlights growing volatility in the semiconductor sector, contrasting with the relative stability of Japanese equities.

• Japan's final Manufacturing PMI for June was reported at 54.8, slightly lower than the preliminary 54.9 but higher than the previous 54.5. • Japanese factories are experiencing their strongest quarter in over a decade, driven in part by global stockpiling efforts linked to ongoing war conflicts. • Regional economic trends show South Korean exports growing at a decades-high pace due to record chip sales, while the Japanese Yen has dropped to its weakest level since 1986.

• Japan's Jibun Bank Manufacturing PMI for June was reported at 54.8, slightly missing the forecasted value of 54.9. • The reading indicates continued expansion in the manufacturing sector, as any figure above 50.0 signals growth. • This data is critical for economists and FX experts to gauge the health of Japan's industrial output and potential monetary policy shifts.

• Japan's manufacturing sector expanded for the sixth consecutive month in June, according to the latest S&P Global Purchasing Managers’ Index (PMI). • The PMI rose to 54.8 in June from 54.5 in May, aligning with previous preliminary flash estimates. • This growth is significant as any reading above the 50.0 threshold indicates sector expansion, while readings below signal contraction.

• MP Dr. Shashi Tharoor and JGU Vice Chancellor Prof. C. Raj Kumar addressed Japan’s National Diet to advocate for stronger bilateral ties. • The visit focused on promoting robust university collaborations and enhancing parliamentary diplomacy beyond simple crisis management or interest negotiation. • This diplomatic engagement serves as a strategic precursor to the upcoming India-Japan Annual Summit.

• Asian markets showed mixed results as the KOSPI slid following a strong quarter, while Japanese and Chinese markets rose driven by positive Purchasing Managers' Index (PMI) data. • Manufacturing activity remained resilient in Southeast Asia, with Thailand's PMI rising to 53.6 and Malaysia's to 50.7, though Indonesia's PMI continued to contract. • In Australia, the S&P/ASX 200 fell 0.6% after building approvals unexpectedly dropped 1.1% in May, weighing on investor sentiment.

• Chinese semiconductor material manufacturers are ramping up investments in advanced products to challenge Japan's long-standing dominance in the global market. • This strategic shift is driven by Beijing's push for greater domestic self-sufficiency in a sector currently valued at US$73.2 billion. • The surge in development is being fueled by the global AI boom, which has increased demand for high-performance chip materials.

• Samsung and SK Hynix have committed to a massive investment gamble in South Korea's semiconductor sector, aligning with the government's strategic push for advanced industry. • The initiative received public praise from President Lee Jae Myung following a development vision briefing held in Gwangju on Tuesday. • This move is critical as both tech giants seek to maintain a competitive edge and capitalize on the ongoing global AI cycle.