Supply Chains Hit by Cyber-attacks
Most server attacks in Japan in 2021 were caused by ransomware. 70% of these were perpetrated via VPNs. Companies in Japan that have neglected to implement countermeasures have also suffered a series of ‘supply chain attacks’, in which the company is used as a springboard to attack affiliated companies. Countermeasures need to be considered not only for the company itself, but also for the industry and wider society.
GDP Grows Annually by 5.4%
The Japanese government announced on February 15 that GDP grew by 1.3% during October to December compared with the previous period. If this pace continues the Japanese economy is expected to grow 5.4% year-on-year. Growth in the service sector (i.e. food services, accommodation, etc.) after the lifting of the state of emergency declaration on September 30, as well as corporate capital investment, were contributing factors. However, the domestic economic recovery is expected to be hindered by the extension of Covid countermeasures targeting the spread of the Omicron variant.
Gradual Relaxation of Covid-19 Border Measures
The Japanese government has adjusted its Covid-19 border policy, raising the number of people allowed to enter the country from 5,000 per day to 7,000 on March 14, and then to 10,000 on April 1. Currently there are 150,000 foreign students who are unable to enter Japan. The Ministry of Foreign Affairs has eased down the travel advisory from Level 3 (‘do not travel’) to Level 2 (‘refrain from non-essential and non-urgent travel’), as the number of new cases of Covid-19 has been decreasing globally.
Japan Supply Chain Measures
In response to Russia’s invasion of Ukraine, the Government of Japan held a meeting of the Strategic Materials and Energy Supply Chain Task Force and decided on emergency measures. Seven commodities, including oil, liquefied natural gas (LNG), palladium and ferroalloys, were identified and alternative supply chain measures to replace Russia will be considered in the future. However, the government declared its policy not to withdraw from the Sakhalin-2 LNG project.
Increasing Threat of Cyber-attacks – System Vulnerabilities at Overseas Sites is Discussed
The Ministry of Economy, Trade and Industry (METI) held a meeting of experts on April 11 to discuss cyber-attack measures, and compiled recommendations for industry in response to the increasing threat. In April, it was reported that Panasonic’s subsidiary in Canada may have been subject to a cyber-attack by ransomware; a ransom-type computer virus. There is an urgent need to formulate a business continuity plan, and to apply the same security measures as those used in Japan to systems at overseas sites.
Defense Minister Kishi Willing to Expand Defense Spending in FY2023
Defense Minister Kishi Nobuo expressed his wish to “secure the necessary budget for drastic reinforcement of defense capabilities,” and voiced willingness for a significant increase in the FY2023 budget, compared with FY2022. He pointed out the importance of uniting with the international community in response to Russia’s invasion of Ukraine, and of avoiding a situation where China takes actions in the Taiwan Strait. Leader of Komeito Party, Yamaguchi Natsuo, commented, ‘the budget is limited and there is a large demand for social security and education. It is not appropriate to project defense spending alone.” An active debate is expected ahead of the budget request this summer.
Regulations Being Considered for Start-up Creation
At the meeting of the ‘Council of New Form of Capitalism Realization’, Prime Minister Kishida Fumio declared the necessity of supporting emerging companies’ management environment, in order to implement the government’s five-year plan for creating more new companies. He outlined his policy on cultivating start-ups and changing capital regulations, and signaled that he would clarify the executive function within the government for achieving this. Kishida added that incorporating the knowledge of start-ups more actively will be a source of innovation, and that he will consider reviewing support measures and regulations for such companies.