The last major dry dock built in Japan was completed by Imabari Shipbuilding in 2017, a 600-metre facility at its Marugame headquarters designed for ultra-large container ships, which was the country’s first new dock in 17 years at the time.

No comparable large-scale dock has been built anywhere in Japan since, even as rivals in China and South Korea continued expanding capacity through the following decade.

That is now set to change under the “Shipbuilding Industry Revitalisation Roadmap”, released by Tokyo at the end of 2025, which sets a target of doubling domestic shipbuilding volume to 18 million gross tonnes by 2035, compared with 2024 levels.

The plan is divided into three parts: the first part, until 2028, will focus on using automation and technology that saves labour, like welding robots; the second part, from 2029 to 2031, will concentrate on building and expanding facilities, including new docks; and the final part, from around 2032 to 2034, will help operate the new capacity and equipment that takes a long time to get, like large cranes.

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The win matters less for its immediate revenue than for what it signals. Japan’s largest mobile operator has committed the processing brain of its radio network to Ericsson’s in-house silicon at precisely the moment the industry is trying to work out how artificial intelligence will reshape mobile traffic. For a company whose core radio business has been shrinking, that is a useful anchor.

What the deal actually covers
RAN Compute is the baseband layer of a mobile network, the computing hardware that sits behind the antennas and handles signal processing, scheduling and the software logic that determines how efficiently spectrum is used. Radios get the attention. Baseband determines what those radios can actually do.

Ericsson says the purpose-built platform uses its latest in-house silicon and is optimised for 4G, 5G and 5G Advanced, as well as for artificial intelligence and machine learning workloads running inside the radio access network. The company describes the result as an AI-native and programmable platform capable of supporting long-term software evolution.

That phrase is doing heavy lifting. It means DOCOMO is buying hardware it expects to keep upgrading through software for years rather than replacing at the next generational step. In an industry where full network swaps are financially painful, longevity is a selling point in its own right.

The numbers behind the pitch
The commercial case rests on two figures. Ericsson claims the platform delivers up to twice the capacity of the previous generation of baseband products while consuming less than half the energy, which it says enables more efficient site operations and lower costs in centralised radio access network deployments where compute units are installed in aggregated fashion.

Both halves of that claim land hard in Japan. The country’s post-Fukushima dependence on imported liquefied natural gas keeps power costs high by international standards, and network energy is one of the few operator expenses that scales directly with traffic growth.

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As per the Japanese broadcaster NHK, crypto had previously been regulated mainly under Japan’s Payment Services Act, which treated it more as a payment method than an investment product.

With the latest rule change, cryptocurrency trading will become subject to regulations closer to those governing stocks and other securities, including curbs on trading based on insider information.

The rule change will also give regulators clearer grounds to pursue project founders, exchange employees and other people who trade before market-moving information becomes public.

“The law also raises the maximum punishment for operating an unregistered crypto trading business from three years in prison and a fine of about USD 20,000 to 10 years and roughly USD 67,000,” reported NHK.

“The new regulations don’t limit themselves to the fight against insider trading. The regulations will require crypto exchanges to comply with the general structure of Japan’s financial services industry,” said Anderson Mori & Tomotsune Law Firm in Japan.

Additionally, some crypto issuers will have to make certain disclosure requirements similar to those made by firms issuing securities. Crypto lenders too will be subjected to regulation, with firms offering wallets and other technologies to exchanges potentially facing new notification and compliance requirements.

The amendments have also introduced the legal basis for separate taxation of crypto gains at an effective rate of about 20%, together with a three-year loss carry-forward deduction. The Far East Asian country currently treats crypto profits as miscellaneous income, with tax rates reaching as high as 55%.

According to the analysis of Japan-based CoinPost, those tax provisions are expected to take effect in January 2028 because enforcement is scheduled to begin during the 2027 fiscal year.

The legislation also creates the foundation for issuing domestic spot cryptocurrency exchange-traded funds (ETFs). The Japan Exchange Group is reportedly considering the first local crypto ETF listings as early as 2027, with traditional financial institutions expected to serve as issuers.

Following the promulgation in parliament, the law is expected to take effect within one year, with cabinet ordinances and supervisory guidelines having the executive power to determine how the new rules will be implemented.

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The plan, detailed in documents released after a policy advisory panel meeting, earmarks 101.6 trillion yen for AI and chip-related spending alone. Unveiling the strategy, Takaichi said she intended to build a “strong and prosperous investment framework”, with the government expected to fund a little under half the total if inflation tracks current forecasts.

In introducing the plan, Takaichi said she aims to create a “strong and prosperous investment framework”, while mentioning that the blueprint calls for a combination of public and private investment to reach the target amounts. The government may contribute a little less than half if inflation stays in line with expectations.

“The investment roadmap marks a key step in Takaichi’s effort to put her stamp on Japan’s growth strategy as technological change and geopolitical tensions reshape economic priorities. The prime minister is seeking to channel investment into sectors that can strengthen economic security — from supply-chain resilience to critical technologies — while boosting the country’s long-term growth potential through support for emerging industries,” reported The Japan Times.

The blueprint forms a central part of Takaichi’s bid to reshape Japan’s growth strategy amid rising geopolitical tension and rapid technological change. It channels funds towards sectors seen as critical to economic security, including supply-chain resilience, while attempting to offset the structural labour shortages caused by Japan’s ageing population.

Within the AI and chips allocation, the largest share will go to semiconductors, alongside “vertical AI” tools built for specific industries. The government projects semiconductor investment will generate 443 trillion yen in economic spillovers by fiscal 2040, with physical AI and vertical AI adding a further 144 trillion yen and 222 trillion yen, respectively.

The initiative builds on Japan’s existing chip revival efforts. Since 2021, the government has committed roughly 7.2 trillion yen to semiconductors and AI, including about 2.6 trillion yen in support for state-backed venture Rapidus, according to the industry ministry.

Separately released long-term fiscal projections modelled three scenarios for the strategy’s impact. Under the most optimistic case, Japan’s debt-to-GDP ratio would decline steadily even with annual government spending of 10 trillion yen. In the other two scenarios, assuming weaker uptake or a continuation of current trends, the ratio would resume climbing during the 2030s. All three assume inflation settles near 2%.

The figures exclude potential rises in defence spending or consumption-tax cuts, suggesting fiscal strain could exceed current estimates. Takaichi’s agenda has already moved markets: The Nikkei 225 briefly breached 70,000 in June 2026, even as superlong government bond yields hit multi-decade highs on fiscal sustainability concerns.

The Japanese government has also released long-term economic and fiscal projections incorporating Takaichi’s growth strategy under three scenarios.

“In the most optimistic case, in which the strategy delivers as intended, the debt-to-GDP ratio is expected to decline steadily even as the government contributes 10 trillion yen in real spending toward the plan each year,” The Japan Times reported.

In the other two, where technological and market uncertainties curb the strategy’s impact, or where current trends persist, the ratio is projected to begin rising again during the 2030s. All three scenarios, as per the government, assume inflation stabilises at around 2%.

The blueprint’s debut also coincides with Takaichi’s government shifting its fiscal focus toward reducing the debt-to-GDP ratio, moving away from using a primary balance target that had guided government policy for more than two decades. The debt-to-GDP metric is generally considered easier to improve during periods of inflation.

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Japanese Prime Minister Sanae Takaichi and Brazilian President Luiz Inacio Lula da Silva confirmed the launch of the negotiations during a meeting in Evian-les-Bains, France, on the sidelines of the recently concluded Group of Seven (G7) Summit.

Through the pact with the Mercosur bloc, which also includes Argentina, Bolivia, Paraguay and Uruguay, Japan hopes to expand market access for automobiles and other products, apart from diversifying supplies of critical minerals amid China’s recent rare earth export restrictions.

In her opening remarks, Takaichi described Brazil as a strategic global partner that shares values and principles with Japan. Mercosur is an attractive growth market with a population of about 300 million and a combined GDP of roughly USD 3 trillion. It is richly endowed with resources such as critical minerals, energy and agricultural commodities,” said Deputy Chief Cabinet Secretary Kei Sato, while giving out more details about the bilateral meeting.

Brazil, the largest economy in the Mercosur bloc, is also a major oil producer, thereby making the Latin American region increasingly important for Japan’s efforts to diversify supply chains and resource procurement. However, as per Sato, Takaichi is also taking into consideration the concerns raised by lawmakers of the ruling Liberal Democratic Party, who have warned that increased imports of animal protein-related products could end up hurting domestic producers.

“The Japanese government is aware of those concerns and will seek to protect sensitive agricultural sectors during the negotiations,” Sato said.

Apart from Brazil, Japan is looking to deepen its ties with France, with Takaichi and French President Emmanuel Macron meeting on the sidelines of the G7 Summit and discussing cooperation on economic security, critical minerals and advanced technologies.

Meanwhile, Japan’s exports grew for a ninth straight month in May, as a weaker yen, higher commodity prices and solid semiconductor demand offset the drag from major supply disruptions linked to the Iran war.

“Total exports by value rose 17% year-on-year in May, outpacing a median market forecast for a 16.2% increase and following a 14.8% rise in April. By volume, however, they rose just 0.5% last month,” the government data stated.

Exports of electronic components drove overall growth, with the ongoing AI boom pushing up prices for memory chips and non‑ferrous metals. While exports to the United States rose 12.5% in May from a year earlier, the China tally went up by 17.9% as well.

Overall imports grew 12.5% in May 2026, compared with the May 2025 tally. However, the ratio fell short of market forecasts, which predicted a 12.8% increase. The gains were witnessed despite a plunge in crude oil import volumes, as the maritime trade disruptions at the Strait of Hormuz severely raised the prices of crude and other energy products.

With per-unit cost in yen hitting an all-time high, crude oil imports plunged 28.5% in value terms and 57.3% in volume terms. That resulted in the Far East Asian nation ⁠running into a trade deficit of 378.7 billion yen (USD 2.36 billion) in May, compared with the forecast of a 564.6 billion yen deficit.

Japan, heavily dependent on imported energy, has faced higher costs following disruptions to ⁠Middle Eastern supply routes. In May, crude oil imports from the Middle East tumbled 61.9% in volume terms. Despite the Takaich government securing alternative crude supplies from alternative sources like the United States, they were not being able to offset the impact that was created by the downfall in Gulf tally.

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“The meeting, held at the ministry’s headquarters in the New Capital, brought together ministry officials and JICA representatives to review ongoing cooperation projects and explore opportunities to strengthen partnership across several areas, including renewable energy, energy planning, energy efficiency, skills development, smart metres, and modern control systems,” the Egyptian government said.

Discussions between the North African country and JICA focused on supporting Egypt’s efforts to achieve energy security, ensure sustainable electricity supplies, increase reliance on renewable energy sources, and reduce carbon emissions in line with “Egypt Vision 2030” and its energy strategy.

“The two sides also examined mechanisms to expand cooperation in training programmes, workforce development, and the establishment of regulatory and training frameworks aimed at improving energy efficiency and performance indicators across various sectors,” reported Arab Finance.

The meeting between Esmat and the JICA delegation also addressed cooperation in digital transformation and artificial intelligence (AI) applications, particularly in the development of energy balance systems, data analysis, load forecasting, solar and wind energy production forecasting, and energy demand management. These initiatives have been tailored to strengthen planning and decision-making processes while improving the country’s resource management and institutional performance.

The two sides also reviewed progress under the Egyptian-Japanese cooperation initiative implemented in collaboration with the Ministry of Higher Education and Scientific Research, which seeks to develop human resources in energy efficiency policies and management, apart from increasing the number of specialists capable of leading the North African country’s energy transition efforts.

“The technical cooperation project with Japan represents a significant step towards developing a comprehensive implementation plan for Egypt’s energy transition, including setting priorities, identifying future projects, and establishing implementation and monitoring mechanisms,” Esmat said.

“The electricity sector is cooperating with JICA to expand renewable energy deployment, reduce emissions, and diversify energy sources, while also benefiting from the agency’s expertise in energy planning, energy efficiency, digital transformation, and technological innovation,” the senior official added further.

Esmat also highlighted Egypt’s efforts to create a supportive investment environment for the domestic private sector, apart from attracting additional investments in the energy sector.

“Egypt’s national energy strategy targets increasing the contribution of renewable energy in the electricity mix to 45% by 2028, compared with a previous target of 42% by 2030, while reducing dependence on fossil fuels,” Esmat added.

For her part, Yuko praised the rapid development of Egypt’s electricity and renewable energy sector while reaffirming JICA’s commitment to supporting the North African country’s energy transition programmes and sustainable development goals.

“JICA will continue supporting Egypt through the transfer of Japanese expertise, technical assistance, institutional and human capacity building, and initiatives aimed at creating a more efficient and sustainable energy system capable of meeting future challenges,” she concluded.

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The world’s fifth-largest ‌oil importer, which imports roughly USD 70 billion to USD 90 billion worth of crude oil annually, sourcing over 90% of its supplies from the Middle East, got just 850,000 barrels per day (4.07 million kilolitres) of crude in April, METI data showed, against the established capacity of over 2.3 million barrels per day.

While imports from the Middle East fell 68%, shipments from Japan’s two largest suppliers – Saudi Arabia and the United Arab Emirates – dropped 60% or more, as the Hormuz stalemate has disrupted the supplies of roughly a fifth of the world’s oil and LNG that happen through the strategically crucial transit route. Despite several crude oil tankers leaving the Gulf region in May, energy flows via the key waterway have remained far lower than pre-war levels.

These have resulted in refiners in Japan and Asia deepening production run cuts since April due to the oil supply shortage.

Japan’s domestic oil product sales, in April, ⁠fell 11.3% from a year earlier to 2.04 million bpd, the METI data showed. Gasoline sales too went downhill, dropping 2.6% to 693,875 bpd. Kerosene sales were down 13.3% to 120,524 bpd. Sales of petrochemical feedstock naphtha reduced 35.6% to 406,231 bpd. Crude oil imports from the United States, however, rose by 38.8%.

Apart from the fall in the oil supply, a weak yen has also resulted in the import price hitting a record high. As per the METI estimates, the customs-cleared import price for crude oil stood at JPY101,389 (USD 637.8) per kilolitre in April, the highest since comparable records began in 1979. The previous record was JPY99,600 in July 2022, following Russia’s invasion of Ukraine.

“In dollar terms, the customs-cleared import price was USD 101.2 per barrel, the 57th highest on record,” the data said further.

Japan’s crude import price, also known as the Japan Crude Cocktail (JCC), is based on customs-cleared CIF (cost, insurance and freight) prices and is sensitive to global crude price movements, with a lag of about one month due to shipping times.

Higher JCC prices often raise the crude oil (along with LNG) import cost, which in turn makes thermal power generation an expensive affair, leading directly to soaring electricity bills.

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However, Asia is also the region that, according to the International Energy Agency (IEA), has two growth engines: China and India, which are leading the continent’s renewable adaptation campaign. Southeast Asian countries also possess immense potential. Should the region double down on green sources to future-proof its energy security and economic outlook?

Rana Adib, the Executive Director of REN21, the global network of diverse stakeholders that enables the necessary changes to build the renewables economy for prosperous lives and societies, shared her insights on Asia’s renewable pursuit in an exclusive interview with International Finance.

An engineer by training, Rana Adib has worked in the private sector and applied research in the fields of renewable energy, energy access, waste management, and the biomethane sector. With her cross-functional profile, she likes to provide solutions that pave the way for a world built on renewable energy. She is also the chair of SLOCAT, an international multi-stakeholder partnership enabling knowledge and action for sustainable, low-carbon transport.

Here are the excerpts from the interview

With crude oil staying above $100 and disruptions in the Gulf, how do you see the global economy coping with this prolonged energy crisis?

In the short term, countries are focused on securing supply and managing demand through measures such as stock releases, subsidies and supply diversification. These can help cushion the immediate impact, but they do not address the underlying structural exposure. With around 20% of global oil trade passing through the Strait of Hormuz, disruptions quickly translate into higher energy prices, inflationary pressure and impacts on industrial competitiveness, particularly in import-dependent economies across Asia and Europe.

This situation highlights a broader point: systems that rely heavily on traded fossil fuels remain inherently exposed to geopolitical risks and price volatility.

After repeated energy shocks since 2022, do you think renewables are shifting from an option to a necessity?

Yes — increasingly, this shift is being driven by affordability, efficiency and resilience. Renewables are now among the lowest-cost sources of new power in many regions and offer greater price stability, unlike fossil fuels, whose costs are subject to global market fluctuations. As prices rise, households and industries are directly affected, while renewables combined with electrification can reduce long-term exposure to these shocks.

At the same time, energy efficiency is becoming more central. Electrified solutions such as electric vehicles and heat pumps are significantly more efficient than combustion-based systems, meaning less energy is required to deliver the same services — helping to lower costs and reduce vulnerability. Countries that rely heavily on imported fossil fuels remain structurally exposed. By contrast, systems built on renewables, electrification, efficiency and flexibility can improve resilience over time. In this context, renewables are increasingly seen not only as a climate solution, but as a key component of economic stability and energy security.

What is the likelihood of Asian governments accelerating the transition to alternatives beyond petrol, diesel, and gas?

In many cases, the current context is likely to reinforce this direction, although the transition may not be linear. Some governments may adopt short-term measures involving fossil fuels to manage immediate pressures. At the same time, the crisis is strengthening the case for electric mobility, public transport, clean electricity, storage and heat pumps, as well as for expanding domestic renewable energy supply. Given Asia’s significant reliance on imported fuels, there is a growing incentive to reduce exposure through electrification, energy efficiency and locally available renewable resources.

With global EV sales reaching 1.1 million units in February 2026, do you expect this growth to sustain or peak soon?

The outlook is likely to be more nuanced rather than indicating a clear peak. Overall, car sales may face downward pressure due to weaker consumer spending and broader economic uncertainty. However, the key trend is that the share of EVs within total car sales continues to increase. EVs represented over 20% of global car sales in 2024 and are on track to exceed 25% in 2025. In leading markets, shares are already significantly higher, including around 50% in China, while others such as South Korea (around 10%), Japan (around 2%–3%) and India (around 3%) remain at earlier stages, highlighting significant room for growth.

This suggests that accelerating investment in EVs, charging infrastructure and enabling policies could play an important role in reducing fuel import dependence and strengthening energy security.

Should automakers prioritise affordability to meet rising EV demand?

Affordability is now central to the next phase of EV adoption. Automakers are already shifting in this direction, driven by weaker consumer demand, geopolitical pressures and rising competition. At the same time, EV economics have improved significantly. In many markets, EVs are already cheaper to own and operate over their lifetime, and upfront costs are moving toward parity. The challenge is therefore no longer technology, but access — ensuring affordable options, financing and scale for mass-market adoption.

With countries like China, India, and Japan leading renewable adoption, should other Asian economies follow more aggressively?

The broader regional trend suggests increasing momentum, but the current crisis also shows that the transition is not always linear. In the short term, many countries are focused on securing fuel supply and managing demand, including subsidies, diversification, and emergency measures. However, this situation is already reinforcing the case for accelerating renewables, electrification and energy efficiency as more durable solutions.

China and India continue to drive large-scale renewable deployment, while Japan is expanding within a more constrained system. South Korea is also pursuing more ambitious renewable expansion plans, particularly in solar and offshore wind. At the same time, other Asian economies remain at earlier stages, highlighting significant room for growth. Countries that have already expanded domestic renewable capacity are generally less exposed to price volatility, which is becoming an increasingly important consideration.

Scaling up renewables, electrification, and efficiency can help reduce exposure to volatile fuel import costs, in addition to improving resilience to external shocks, supporting domestic economic development and new industries. In this context, accelerating the transition is increasingly seen not only as a climate priority, but as a strategic economic and energy security decision.

Despite leading Asia’s renewable adoption charge, Japan and South Korea are feeling the brunt of the global energy crisis, given their dependence on imported fuel. Should these nations take a hard look at their energy sourcing practices?

The current crisis underscores the structural dependence of both countries on imported fuels. Japan sources the vast majority of its crude oil (around 90%) from the Middle East, while South Korea imports roughly two-thirds from the same region, with much of this supply transiting through key chokepoints, such as the Strait of Hormuz. While both maintain strategic reserves, these provide only a short-term buffer.

Reducing this exposure over time will depend on accelerating domestic renewables, electrification, grid and storage infrastructure, and energy efficiency. More broadly, this reflects a shift in how energy security is being understood, from securing fuel supply to reducing reliance on imported fuels altogether.

Japan, after the 2011 Fukushima disaster, took a backseat in expanding its nuclear industry. Do you see things changing in this front post-Gulf crisis?

Japan’s energy policy had already begun evolving before the current crisis, with a more balanced approach that includes both renewable expansion and a gradual return of nuclear power. The current context may reinforce discussions around nuclear energy in terms of energy security. However, nuclear developments typically involve long timelines and remain subject to public acceptance considerations. In the near term, measures such as accelerating renewables, electrification and energy efficiency are likely to play a more immediate role in strengthening energy resilience.

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Antony Froggatt, Senior Director for Aviation, Climate, Energy, and Shipping at T&E, a Brussels-based NGO advocating clean transport and energy, told International Finance, “Many forecasters, such as the IMF (If energy prices sustain just a 10% increase over one year, this would add 0.4 percentage point to inflation and slow economic growth by 0.1%-0.2%,) and Fitch, suggest that higher energy prices will negatively affect global inflation and reduce global growth. The extent of these will depend on how high prices get, and how long they remain high.”

Jan Rosenow, Professor of Energy and Climate Policy at Oxford University and Senior Associate at Cambridge University, said, “The short-term pain is real. Higher inflation, squeezed household budgets, and recession risk in energy-intensive economies. But the adjustment mechanisms are also kicking in: strategic reserve releases, demand destruction, and accelerated supply from non-Gulf producers. The deeper concern is duration. A shock that lasts months reshapes investment decisions in ways that a spike lasting weeks does not.”

Clean energy pivot: A Must For Asia Now

In 2026, Asia has become the Europe of 2022. Back then, Russia, in response to the Western sanctions for the Ukraine war, significantly cut natural gas supplies to the continent, resulting in high energy prices and a cost-of-living crisis. Asia, which buys more than 80% of the crude that transits the Strait of Hormuz, is now facing an “energy emergency.”

This could prompt Asia to have a re-look at renewables and initiatives to future- proof both its energy security and economic outlook.

Froggatt commented, “I would argue that renewables have been a necessity for some time, and the economic case for them is even stronger now. As far back as 2020, the International Energy Agency called solar PV the ‘cheapest source of electricity in history’. Since then, the costs of not only renewables (solar and wind), but also storage options, particularly batteries, have continued to fall.”

Rosenow remarked, “Each successive shock – 2022, and now this – makes the economic and security case for domestic clean energy harder to ignore. Renewables are not just cheaper in many markets; they are now the geopolitically safer choice. The question is no longer whether to accelerate the transition but how fast institutions can move.”

EV: The Best Starting Point

Stating that higher fossil fuel prices affect consumers’ cost of living and the balance of payments of importing countries, Froggatt believes episodes like the 1970s global oil price spikes, and the European energy crisis in 2022 will only motivate policymakers to accelerate their efforts to limit their dependence on fossil fuels for economic and supply security reasons.

“We saw this in the EU with the introduction of the ‘Fit for 55’ package in 2022 to accelerate the transition away from imported fossil fuels. However, the majority of these measures will take time to have an effect. If we want to really reduce dependency on fossil fuel, structural changes with new investment are needed, particularly in infrastructure, such as the grids and buildings,” he stated.

Rosenow, on the other hand, remarked, “The pressure is certainly there. Asia bears the heaviest volumetric burden from Hormuz disruptions, and governments that were already energy-insecure are now facing acute supply anxiety. I’d expect faster permitting of renewables, more serious electrification policy, and renewed interest in long-term LNG alternatives – though the pace will vary significantly by country.”

To deal with the “energy emergency,” Asian countries are advocating solutions like a four-day workweek and preventing unnecessary travel to save fuel. This might make electric vehicles more attractive.

Froggatt says, “I would assume that sales will continue to increase. Globally, only around 10% of car sales are electric, but in leading countries, such as China and Vietnam, we are already seeing over 40% of car sales being electric. Consequently, as the cost of electric vehicles continues to fall and charging infrastructure becomes more available and robust, the pace of sales growth will accelerate, especially in an era of high fossil fuel prices.”

Froggatt also pointed out that in Europe, car manufacturers have failed to develop smaller, low-cost EVs fast enough. This is part of the reason why Chinese vehicles are entering the EU market so quickly.

“I think it is incumbent on all car manufacturers to make EVs to meet a variety of consumer requirements, which include those that are most affordable,” he said.

So, Asia should focus on the affordability factor, introducing tax credits for consumers, apart from setting up intensive charging networks.

“There have been significant cost reductions already. And in many markets, EVs are close to or at cost-parity over their lifetime. Further cost reductions are needed to shift the market faster to EVs,” Rosenow noted, while adding, “The underlying drivers – policy support, falling battery costs, expanding model ranges – remain intact. Short-term, high fuel prices actually reinforce the EV value proposition. The risk to growth is on the supply side: critical mineral availability and manufacturing capacity. I don’t see a near-term peak, but the rate of growth will inevitably moderate as markets mature.”

The Continent Holds Promise

As per the International Energy Agency’s (IEA) Renewables 2025 report, two of Asia’s growth engines, China and India, along with the United States and Europe, were responsible for clean energy’s global expansion. Southeast Asia holds promises too. With an estimated 20 terawatts of untapped solar and wind potential (equivalent to around 55 times the region’s current total power capacity), the IEA sees the region as being more than capable of securing its energy security through the renewable route.

“The case for doing so has never been stronger. Energy import dependence is now visibly a security and economic liability, not just an environmental one. Southeast Asian economies, in particular, have strong renewable resource endowments – solar, geothermal, offshore wind – that remain underexploited. The Gulf crisis should be the catalyst for a serious regional rethink,” Rosenow said.

Froggatt too observed, “It is not just countries in Asia that can and should accelerate their use of renewable energy. Without accelerating deployment in the EU, the 2030 renewable energy target of at least 42.5% of energy from renewables will not be met. In developing countries, renewable energy is a way to meet rapidly increasing demand. Governments can take several steps to support the renewable energy sector. They can reduce construction risks and costs through accelerated planning, grants, soft loans, and other measures. Furthermore, they can implement support schemes, such as contracts for difference or feed-in tariffs, that create stable revenues. Governments can also help develop local supply chains, which provide additional price security and create local jobs. Finally, governments can set targets for renewable energy use, which gives confidence to investors.”

While noting that higher rates will raise the cost of capital precisely when deployment needs to accelerate, Rosenow advised, “The policy response matters enormously here: blended finance, public guarantees, and development bank support can reduce the risk premium that makes projects unfinanceable in the private market alone. Countries that get this right will attract investment; those that don’t will fall behind.”

Despite investing heavily in offshore wind, solar, and hydrogen strategies, Japan and South Korea still fulfil a massive chunk of their energy requirements through imported fossil fuels. Both of them are feeling the Hormuz pinch right now.

Rosenow said, “This crisis is a stress test they (Japan and South Korea) were always likely to fail. Both countries have made genuine progress in renewables but remain structurally dependent on imported fossil fuels in ways that leave them exposed to exactly this kind of shock. A serious reassessment of domestic generation capacity is overdue.”

Maybe, it’s time for Japan to shed the ghost of Fukushima.

Froggatt said, “Electricity generated from renewable energy is, under most conditions, far cheaper than that generated by nuclear power. In addition, renewable energy generation is much quicker to build. Therefore, although some countries may look again at nuclear power, I think that the higher costs and slowness to build – especially in countries that don’t already have a nuclear sector – will reduce the number of countries that actually start building nuclear power plants.”

Rosenow concluded, “The political and public calculus on nuclear in Japan was already shifting before this crisis, with several reactors being restarted. A prolonged Gulf disruption accelerates that conversation considerably. Energy security concerns now outweigh, for many policymakers, the post-Fukushima caution. I would expect Japan to move more decisively on restarts over the next few years.”

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“Japanese Minister of Finance Satsuki Katayama and South Korean Minister of Economy and Finance Koo Yun-cheol expressed serious concern over the sharp depreciation of the Korean won and the Japanese yen. Furthermore, they reaffirmed that they will closely monitor foreign exchange markets and continue to take appropriate actions against excessive volatility and disorderly movements in exchange rates,” said a media note after the officials met in Tokyo.

The yen touched its lowest in 20 months on 13th March, nearing the line of 160.00 to the dollar that the market analysts think might prompt Tokyo to intervene to support the currency. ‌The ⁠won, on the other hand, breached a psychological barrier of 1,500 per dollar this month for the first time since March 2009.

The Iran war has also driven ⁠the dollar higher on safe-haven demand, apart from battering the currencies of countries heavily reliant on imported oil.

The currency is also gaining as traders reduce expectations for how much the US Federal Reserve might cut borrowing costs in 2026, as worries over rising inflation have reduced the likelihood of interest rate cuts from two before the war to none now.

Tokyo and Seoul shared the view that significant volatility had emerged in financial markets, including foreign exchange, Satsuki Katayama told a press conference after the meeting.

“The Japanese government ⁠is fully prepared to respond at any time, bearing in mind the impact that currency moves may have on people’s livelihoods amid surging oil prices, and I believe both ⁠sides share that understanding,” she added.

Yen, due to its huge trade surplus and enormous net international investment positions, was once used to enjoy unconditional safe-haven status.

However, that position is under threat now, as Joey Chew, head of Asia FX research at HSBC, told Reuters, “The yen can be vulnerable to potential oil supply shocks – it also weakened last year in mid-June amid Israel-Iran tensions.”

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