The Japan Update 2025 explored Japan’s political, economic, demographic and strategic challenges, and the future of the Australia–Japan partnership in energy, trade, migration and people-to-people ties.
Japan Update 2025 Recordings
- FULL JAPAN UPDATE 2025 RECORDING PLAYLIST
- Energy Transition Keynote & Panel Discussion
- Economy Keynote & Panel Discussion
- Migration Policy Keynote & People to People Ties Panel Discussion
- Japan's Strategic Foreign Policy Choices Keynote & Panel Discussion
Japan Update 2025 Summary
The 11th annual Japan Update opened by framing the domestic and international contexts for Japan and its relationship with Australia. This included Prime Minister Shigeru Ishiba’s minority coalition government, the economic shift from deflation to reflation, demographic decline, and the significant security and economic challenges posed by the second Trump administration.
For the bilateral Australia–Japan relationship, the energy trade and people to people ties were a focus of the Update given the upcoming 50th anniversary of the Basic Treaty of Friendship and Cooperation. Japan and Australia need to reinvest in the relationship given political and strategic closeness, as well as the more uncertain external environment.
Professor Masakazu Sugiyama from the Research Center for Advanced Science and Technology, University of Tokyo, delivered the energy transition keynote address, outlining a pathway for achieving carbon neutrality in Japan.
Professor Sugiyama stressed that Japan lacks the land area for deep electrification powered by decarbonised electricity. Similarly, domestic production of green hydrogen — essential for industrial processes — would require a doubling of the nation’s entire electricity generation capacity.
To reconcile Japan’s constraints with its decarbonisation efforts, Professor Sugiyama proposed a fundamental reconstruction of the global supply chains, with Australia as a key partner. In this new relationship, Australia would leverage its abundant renewable resources to undertake energy-intensive primary processing and exporting higher-value, facilitating high-value industrial opportunities and a low-cost pathway to decarbonisation.
The first panel, featuring Leigh Livergood from Mitsubishi Australia, Professor Llewelyn Hughes from The Australian National University (ANU) and Professor Masakazu Sugiyama from the University of Tokyo, was chaired by Kokoro Osada from I-Environment Investments Pacific. The discussion highlighted differing pathways and significant hurdles to realising the vision of decarbonisation.
Livergood outlined how corporations require policy certainty to proceed with necessary long-term investments. Professor Hughes argued for a formal bilateral mechanism to manage uncertainty and unlock new opportunities.
The discussion also noted the formidable barriers that remain, including social licence challenges, employment shifts and policy uncertainty.
Economy and demographics keynote
The session on Japan’s economy and demographics featured a keynote address by Professor Sagiri Kitao of the National Graduate Institute for Policy Studies, with a response from Dr Elena Capatina from ANU.
Professor Kitao outlined how deep-seated drivers of Japan’s demographic shifts rule out a ‘magical solution’ to low fertility. Using sophisticated economic modelling, she demonstrated how the profound changes in Japanese family life are a rational response to fundamental economic and societal shifts.
Technology boosting women’s productivity and wages has raised the opportunity cost of childcare, disincentivising child-rearing. The proliferation of home appliances has also freed up women’s time for more intensive parenting. Japanese parents are choosing to trade quantity of children with quality due to increased returns on education.
Professor Kitao noted how the dramatic increase in the non-financial time cost of childcare was identified as the most important factor suppressing preferences for more children.
The economy and trade panel, chaired by Dr Capatina and featuring Professor Ippei Fujiwara and Professor Shiro Armstrong, covered both domestic fiscal and international trade challenges. Professor Fujiwara argued that Japan’s fiscal crisis is driven by the medical and nursing care costs of the ‘super-ageing’ society. Simultaneously, higher interest rates on Japan’s debt have increased the fiscal burden threatening the government’s ability to maintain living standards.
Professor Armstrong detailed the threat posed by Japan’s response to the Trump administration’s tariffs. Japan’s managed trade approach, underpinned by preferential treatment for the United States to deal with tariff threats, marks a fundamental departure from free trade. Such a short-term approach erodes the rules-based order that has guaranteed Japan’s prosperity for over 70 years.
Professor Armstrong argued that Japan should instead ‘multilateralise’ its concessions to the entire world, not just the United States, transforming a system-degrading action into a system-strengthening one.
Associate Professor Nana Oishi from the University of Melbourne delivered a keynote on Japan’s immigration landscape, illustrating Japan’s profound demographic crisis.
Associate Professor Oishi showed that a majority of the Japanese public has supported increased immigration for years, enabling major policy reforms. But the rapid pace of change, combined with negative media reports, has been weaponised to spread misinformation. This has fuelled a public backlash and contributed to the rise of the populist Sanseito party.
Associate Professor Oishi closed by noting the path forward lies in retaining talent, aggressively combating misinformation and fostering direct, in-person interactions to build truly cohesive communities.
Chaired by Professor Shiro Armstrong, the panel featuring Associate Professor Nana Oishi, Natsuko Ogawa, Chair of the Australia-Japan Foundation and Leonie Boxtel, Board Member of the Australia-Japan Foundation. Set against the upcoming 50th anniversary of the Basic Treaty of Friendship and Cooperation, the discussion warned how the foundational capacity for mutual understanding is at risk of atrophy.
Panellists noted the decline in formal Japanese language training and the disappearance of specific talent pools. The panel concluded with a strong call for significant, coordinated reinvestment in the relationship’s human architecture. A key issue raised was the need to boost funding for cornerstone institutions like the Australia-Japan Foundation, whose budget has remained stagnant for almost 50 years.
Professor Shin Kawashima from the University of Tokyo delivered a keynote address framing Japan’s foreign policy around three core challenges, with a particular focus on China–Japan relations. He noted Japan’s is diplomatic language shifting towards an ‘international order based on the rule of law’. This reflects a recognition of China’s increased influence and diminished US engagement.
Another challenge is the tense regional security environment, with increased Chinese naval activity around Japan. The final challenge is economic security, where the traditional Japanese policy of separating politics and economics is being undone by geoeconomics.
Professor Kawashima concluded with insights into the social dynamics shaping the future of Japan–China relations. A growing population of Chinese residents and citizens of mixed heritage is driving a significant disconnect between an increasingly diverse Japanese society and the ethnically homogenous Japanese political elite.
Japan’s strategic choices panel
The final panel, chaired by Dr Lauren Richardson from ANU, brought together Professors Shin Kawashima, Mie Oba from Kanagawa University and Tomohiko Satake from Aoyama Gakuin University to discuss Japan’s strategic choices amid a volatile world. Professor Oba and Professor Satake both noted the threats posed by an increasingly unpredictable United States which is acting as a ‘coercive hegemon’, requiring Japan to increasingly internalise its security provision.
Professor Oba elaborated on the challenges of managing the security environment in the context of Japan’s strategy to enhance partnerships. A growing strategic divergence, driven by alignment choices between Japan and ASEAN members, will complicate efforts to build a unified regional front.
Japan’s core strategic choice is not centred on the US alliance but the construction of robust middle power networks to navigate an increasingly multipolar, ‘post-hegemonic’ world.
The conference concluded with remarks from Professor Ippei Fujiwara and Professor Simon Avenell, Director of the ANU Japan Institute. Professor Fujiwara expressed deep gratitude to the participants and reaffirmed the Update’s mission of fostering optimism by ensuring attendees are well-informed with expert knowledge.
Professor Avenell placed the day’s discussions in a historical context, highlighting the upcoming 80th anniversary of Japan’s surrender in September 1945. He drew a stark contrast between the image of Australian soldiers with rifles in Tokyo then and that of Australian tourists with shopping bags and skis today. He stressed that this positive evolution was not inevitable but the work of strengthening people-to-people ties, a task which he called on the audience to continue.
The Japan Update 2025 was supported by:
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Crawford School of Public Policy
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The Global Network of Renewable Fuels (RE Global), Research Center for Advanced Science and Technology, The University of Tokyo
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The Graduate School of Arts and Sciences, The University of Tokyo
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The Japan Foundation, Sydney
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The Japanese Studies Association of Australia
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Kanagawa University