Press Conference by Minister Muto (Excerpt)

*Note: This is a provisional translation for reference purposes only.

10:30 to 10:42 a.m.
Tuesday, January 7, 2025
Press Conference Room, METI Main Building

Opening Remarks

None

Question-and-Answer Session

Outlook of the Japanese economy and METI’s policy issues

Q: Could you comment on the outlook of the Japanese economy this year and the Ministry of Economy, Trade and Industry (METI)’s policy issues?

A: Regarding the Japanese economy this year, the government forecasts that the economy will grow moderately if wage increases exceed price increases, which will increase consumption, and if companies’ domestic investment can maintain a steady trend. Conversely, we think that the key to achieving growth will be whether or not Japan can maintain a virtuous cycle of increasing wages and domestic investment.

On the other hand, recent consumption, as was also the case at the end of last year, still lacks strength, and wage increases vary among regions and industries. We believe that the most important policy issue for the economic and industrial policies in 2025 is to achieve continuous wage increases and domestic investment, including for local small and medium-size enterprises (SMEs) to establish a virtuous cycle..

To this end, this year, we must make full use of comprehensive economic measures and supplementary budgets to firmly encourage the positive trend of wage increases and domestic investment.

Specifically, we will strive to support SMEs for their productivity improvement, price pass-through for securing funds for price hikes, and to thoroughly ensure the fairness of transactions. We will also focus our efforts to the maximum extent possible for stimulating investment in growth fields, including AI, semiconductors, space, quantum, biotechnology, and startups.

In the fields of Green Transformation (GX) and energy, we will this year make maximum use of both renewable and nuclear energies based on the policy that was compiled at the end of last year, and we will propel as many specific efforts as possible to make decarbonized power sources the driver of a new industrial cluster. Amid a new administration taking office in the United States, Japan will advance dialogue with the U.S. to further develop the economic environment between Japan and the U.S. in a way that contributes to Japan's national interests.

It is also important to lead the Expo 2025 Osaka, Kansai, Japan to success and to link that achievement to the social implementation of cutting-edge technology and regional revitalization.

Regarding some challenges, including the recovery and reconstruction of the areas affected by the Noto Peninsula Earthquake, the reconstruction of Fukushima, and the safe and steady decommissioning of Tokyo Electric Power Company's Fukushima Daiichi Nuclear Power Station, we will surely move forward step by step while carefully listening to the opinions of the nation and the people working for these efforts. This is our economic outlook.

Nippon Steel’s proposed acquisition of U.S. Steel

Q: Nippon Steel Corporation (Nippon Steel) announced that it has filed a lawsuit against President Biden's order to block the proposed acquisition of United States Steel Corporation (U.S. Steel), seeking to invalidate the order. Could you offer your view on this case? Also, yesterday, you mentioned that Japan will provide some kind of support for the case. Could you explain anew about the Japanese government's response to it going forward?

A: Continuing on from yesterday, I will talk about the issue of Nippon Steel. The lawsuit by Nippon Steel was filed as part of the company's business management decisions, and the U.S. will make a legal judgment in accordance with its judicial procedures. As the Government of Japan, we would like to refrain from commenting on the case at this stage. As I mentioned yesterday, the Government of Japan will consider what kind of specific support it can provide to the company in light of the company’s future response. We would like to convey to the U.S. the importance of developing an environment in which Japanese companies can invest with peace of mind.

Q: This is a question related to Nippon Steel. In response to President Biden's announcement of blocking the proposed acquisition, a U.S. Steel CEO is reported to have commented that “the Chinese Communist Party leaders in Beijing are dancing in the streets.” I think that this acquisition plan also implies countering the threat from China. As a minister, could you explain your view on the U.S. President's decision in the context of countering China?

A: I recognize the press coverage regarding U.S. Steel mentioning China. However, we would like to refrain from offering a view on each of the company's comments. Based on this, Nippon Steel has offered explanations to the effect that the proposed acquisition represents an initiative by the Japanese and U.S. steel companies to enhance their competitiveness by combining their advanced technologies and aims to contribute to maintaining steel production capacity and jobs in the U.S. METI also believes that these efforts will lead to enhancing the competitiveness of the Japanese and U.S. steel industries in the global markets. So, I do not think that this issue is really about competing with China.

Q: I would like to ask you about two points related to U.S. Steel.
First, you mentioned earlier that the government will consider specific support to Nippon Steel in light of the company’s future response. As the case is already in the phase of entering a lawsuit, could you explain specifically about what kind of support the Government of Japan can provide and about any other potential options? Next, regarding the acquisition plan, yesterday, President-elect Trump posted on his social networking site a comment reiterating that he is against the acquisition plan. I believe that Japan’s negotiations with the new administration will become an important key point. Could you explain whether or not such negotiations have already started and whether or not there are any plans to hold such negotiations in the future?

A: I think you are asking about the economic relationship between Japan and the U.S. As the foundation of the bilateral relationship is built as part of the so-called economic relationship, I believe that regarding this investment case, Japan, as its stance, should develop an environment in which Japanese companies can invest with confidence. Generally speaking, Japan has been taking the lead in some efforts for maintaining and strengthening the rules-based international economic order within the international framework, and it should continue to take these efforts as its stance going forward.

In addition, we would like to continue to convey to the U.S. government the importance of developing an environment in which Japanese companies can invest with peace of mind, as I mentioned earlier.

I recognize the President-elect Trump’s post on his social networking site as you mentioned. At this point, I would like to refrain from commenting on the potential policies of the U.S. government after the inauguration of the next U.S. administration as it would be premature.

In any case, as a strong economic relationship is the foundation of a bilateral relationship, Japan, as its stance, should convey to the new administration as well the importance of an environment in which Japanese companies can invest with peace of mind.

Q: This is a question related to Nippon Steel mentioned earlier. I understand that it is extremely rare for a Japanese company to file a lawsuit against the U.S. federal government, not just in the steel industry but in other industries as well. Could you explain your awareness of the significance of this lawsuit case filed against the U.S. government, if any?

A: I think that it is extremely rare for a Japanese company to file a lawsuit against the U.S. federal government.
Of the cases that the Committee on Foreign Investment in the United States (CFIUS) reviewed, the U.S. issued a blocking order to about eight cases, in which the majority of the cases involve China and one involves Singapore, I think, as I have heard so far. I recognize that this is the first case in which a blocking order was issued against a Japanese company.

In that sense, Japan and the U.S. should maintain a relationship of trust, including economic security, as I mentioned earlier, and Japan should continue to appeal to the U.S. that this is an important foundation for the relationship between the two countries. I can say that this is the best way. Even with the new administration, this foundation should remain in place, and I believe that Japan should continue to strive to seek the understanding of the U.S. on issues involving public interest within the framework of the Japan-U.S. alliance.

Russia's list of targets for attack

Q: I would like to ask you about the security of infrastructure. Some overseas press coverage reported that the Russian military developed a list of 160 nuclear and defense facilities in Japan and the Republic of Korea as targets for attack. According to the report, the list includes a nuclear power station in Tokai Village, Ibaraki Prefecture. As METI is in charge of the electricity industry, I would like to confirm the current measures that METI will take in the event of such attack. In addition, could you explain any additional policy that METI may develop to address such an event or any actions that METI should take, if any, given the press report?

A: I recognize the press coverage. However, I would like to refrain from commenting on each of these reports. Based on this, I can say that the Government of Japan is to respond to missile or other armed attacks on its nuclear facilities using Aegis destroyers or PAC-3s. In addition, under the framework of the Act on Response to Armed Attack Situations and the Act on Measures to Protect the People in Armed Attacks, we have been preparing measures, including an order for suspending the use of nuclear facilities and the evacuation of residents. Furthermore, in normal times, Japan has been constantly working to strengthen collaboration between related organizations, including joint training between the Self-Defense Forces and the police. As part of the government, METI will take a stance of doing its utmost to ensure that it addresses all situations. I would like to conclude my comments with this.