Industrial Policy & Trade Monitor· 2662 actions· ✨ 89 recent

Japan's Diet passed the Foreign Exchange and Foreign Trade Act (FEFTA) 2026 Amendment on 29 May 2026; the law was promulgated on 5 June 2026. The amendment represents the most significant overhaul of Japan's inbound FDI screening regime since FEFTA was first applied to national-security transactions in 2019. Three structural additions: (1) indirect-acquisition screening — extends mandatory prior-notification to acquisitions of Japanese sensitive-sector companies effected through intermediate holding structures or offshore parent vehicles, closing the principal gap exploited by Chinese and GCC SWF investors via SPV chains; (2) call-in powers — grants the Minister of Finance authority to open a review up to ten years retroactively where an acquisition was not pre-notified or where circumstances have materially changed since clearance, directly analogous to CFIUS § 721(b)(1)(D) retroactive jurisdiction; (3) cross-ministerial "Japan CFIUS" consultation framework — formally institutionalises a standing inter-agency committee (Finance, METI, MoD, NPA, MIAC) modelled on the US CFIUS committee, replacing the prior ad-hoc inter-ministerial process. Cross-ministerial and indirect-acquisition provisions entered into force immediately on promulgation (5 June 2026); remaining Cabinet-Order-level implementing provisions to follow within one year.

On 26 December 2025, Japan's Cabinet approved the FY2026 (Reiwa 8) national budget, which Global Trade Alert logs as including a "Next-Generation Aircraft Development Support" financial-grant programme administered by METI, effective with the fiscal year on 1 April 2026 and running through 31 March 2027. The line item corresponds to METI's "Next-Generation Aircraft Development Support Project" (jiki kokuki kaihatsu-to shien jigyo), funded through the Decarbonisation Growth-type Economic Structure Transition Promotion Subsidy (GX Transition Bond proceeds) and disbursed via a designated implementing body to aerospace-supply-chain firms. The FY2026 allocation is JPY 150 billion, up from JPY 81 billion in FY2025 -- an 85% increase -- aimed at strengthening Japan's aircraft-parts and materials supply chain (composites, advanced materials, engine and airframe components) and its international-competitiveness and economic-security positioning in next-generation aircraft programmes.

Japan's Ministry of Economy, Trade and Industry amended the Export Trade Control Order (輸出貿易管理令) on 14 November 2025 to extend the specific bulk-licence (特別包括許可 / tokubetsu hōkatsu kyoka) framework to accessories and parts of defence equipment exported for maintenance and repair purposes to countries holding a Defence Equipment and Technology Transfer Agreement (DETTA / 防衛装備品・技術移転協定) with Japan. Prior to the amendment, each transfer of such parts required an individual export-licence application specifying parts and quantities per transaction, which impeded the rapid parts-flow essential to operational maintenance cycles. The amendment entered into force on 14 February 2026 and currently covers eleven DETTA-partner countries: the United States, United Kingdom, Italy, Australia, France, Germany, India, Indonesia, Malaysia, the Philippines, and Vietnam.

Japan Bank for International Cooperation (JBIC), Japan's state export-credit institution, signed a guarantee agreement on 2025-10-20 covering approximately JPY 37.4 billion (~USD 248 million) of loans from a consortium of eleven private Japanese financial institutions to ANA HOLDINGS INC. for the import of two Boeing 787-10 aircraft from the United States. JBIC frames the guarantee as supporting ANA Group's fleet-decarbonization transition strategy and maintaining the international competitiveness of the Japanese aviation industry.

METI certified a Supply Security Plan (供給確保計画) filed by IHI Master Metal Co., Ltd. under Japan's Economic Security Promotion Act, designating nickel-alloy investment castings for aircraft engine and structural components as a "specified critical good" material input. The certification (plan no. 2025-aircraft-3-1 / ２０２５航空機の部品第３号－１, approved 1 August 2025) qualifies IHI Master Metal for a grant of approximately JPY 2.5 billion (~USD 16.6 million) to expand domestic nickel-alloy casting capacity for aircraft parts.

Japan's Cabinet approved an amendment to the Cabinet Order on Inward Direct Investment under the Foreign Exchange and Foreign Trade Act (FEFTA) on 1 April 2025; the order was promulgated 4 April 2025 and entered into force 19 May 2025. The amendment introduces two new investor categories — Type-A (investors legally or contractually obligated to share information with foreign governments) and Type-B (investors effectively in a comparable position without formal legal obligation) — and eliminates or narrows exemptions from mandatory prior-notification screening for both categories. The primary driver is concern over minority-stake acquisitions by Chinese investors in Japanese listed companies operating in sensitive sectors including cloud computing, telecommunications infrastructure, semiconductor equipment, and advanced electronics. The reform is structurally distinct from the outbound FEFTA catch-all controls overhaul (2025-10-09) and from the Economic Security Promotion Act (2022-05-18); it is the inbound FDI-screening complement to that framework.

On 28 March 2024 the Cabinet Office Committee on National Space Policy adopted Japan's Space Technology Strategy, the country's first national space-industrial roadmap establishing priority technology areas (space transportation, satellites, space science and exploration, shared technologies) and the operating framework for the ¥1 trillion (≈USD 6.4 billion) ten-year Space Strategy Fund jointly managed by JAXA on behalf of METI, MEXT and the Cabinet Office. The Strategy sets headline targets of doubling Japan's space-industry market to ¥8 trillion by the early 2030s and reaching ≈30 launches per year. A METI/MEXT/CAO Basic Policy of 26 April 2024 operationalised the Fund's grant architecture, and JAXA opened the first calls in July 2024. The Strategy is the parent authority for subsequent JAXA Space Strategy Fund grant programmes and is Japan's structural counterpart to the EU Space Act (2025) and US National Space Policy.

Japan's Foreign Exchange and Foreign Trade Act (FEFTA, Act No. 228 of 1 December 1949; 外国為替及び外国貿易法) is the foundational umbrella statute governing the entire modern Japanese economic-statecraft toolkit. Originally a restrictive positive-list regime for foreign-exchange transactions, FEFTA was fundamentally liberalised by the 1980 revision (positive-list to negative-list shift) and again overhauled in 1998 to establish the modern regulatory architecture. Three principal enforcement arms operate under FEFTA: (i) security export controls administered by METI via the Export Trade Control Order and the Foreign Exchange Order (covering the Wassenaar Arrangement, Australia Group, MTCR, NSG, and CWC controlled-items lists plus Japan-specific catch-all controls); (ii) inward FDI screening administered jointly by the Ministry of Finance and sector ministries (prior notification and pre-notification regime, substantially expanded 2019–2020 with Core Business Sectors covering semiconductors, critical minerals, advanced materials, cloud computing, and aerospace added 2021); and (iii) autonomous economic sanctions (asset- freeze and payment-restriction designations against Russia, Iran, DPRK, Myanmar, Belarus, and others via Cabinet Orders made under FEFTA authority). Structurally peer-foundational to the US Trade Expansion Act 1962, US Trade Act 1974, UK SAMLA 2018, CN Export Control Law 2020, and CN Anti-Foreign Sanctions Law 2021 as the G7+CN foundational economic- statecraft statute cluster.