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Japan faces a bifurcated trajectory: Prime Minister Takaichi pushes defense expansion and constitutional revision amid sharp Chinese criticism, while the economy shows deep sectoral divergence between SoftBank's AI-driven profit surge and Honda's historic loss, compounded by Iran war cost pressures and a record yen intervention.
May 2026
Week of May 25, compared to 12-week average
No deviations this week.All weeks this month are quiet.
Top sources covering Japan
Japan's economy shows stark sectoral divergence. SoftBank posted a $12 billion profit surge on AI investments and announced a €75 billion French AI data center plan, while Honda recorded its first annual loss since the 1950s and abandoned EV targets, and Toyota saw a 20% profit drop due to Iran war cost pressures. The government confirmed a record $73 billion yen-buying intervention to stem currency weakness.
Prime Minister Takaichi faces intensified foreign criticism over defense policy. China's Xi strongly criticized Takaichi for Japan's 'remilitarization' during a Trump summit, while Japan rejected China's 'new militarism' accusation and pointed to Beijing's own military buildup. Domestically, a Kumamoto city councilor was arrested for bribery, and the debate on constitutional revision continues.
Japan's Self-Defense Forces fired anti-ship missiles for the first time during Philippine military drills, signaling a more assertive regional posture. Domestically, a U.S. soldier was sent to prosecutors over sexual assault, and a spraying incident in Tokyo's Ginza area sent 19 to hospital. A Japan-linked oil tanker crossed the Strait of Hormuz amid the Iran war.
Japan's demographic decline accelerates with a record five-year population drop, while public health faces a measles outbreak approaching 500 cases. A magnitude 6.3 earthquake hit northern Japan, and the year's first fatal bear attack was confirmed, highlighting multiple concurrent natural and social pressures.