Corporate governance inches forward in Japan

Insight: Japan is revising its corporate governance code (CGC) for the first time since 2021. Its Financial Services Agency, the Tokyo Stock Exchange, and a panel of experts have agreed on streamlining the language in the existing code that will urge companies to increase their disclosures and to offer investors ‘carefully tailored explanations’ of their strategy and management policies. The main substantive change is to ‘persistently examine’ whether they are deploying their resources effectively and investing enough in growth.

Impact: While the proposed changes to the CGC are all welcome, the document is overly long and complicated and as such, this first revision in more than five years feels like a wasted opportunity. The appeal to deploy resources efficiently is offered only as guidance, rather than as a firm requirement. And it could, in fact, be seen as a swipe by the regulators against Japanese companies increasing share buy backs and dividends in recent years —one of the most positive results of the original code and a major factor behind the rise in stock prices. Yet, there has been no further progress on increasing the number of independent board directors, setting term limits for directors, and encouraging the establishment of special board committees, which many firms still lack. Evidently, Japan still has some way to go to make its corporate governance world class.

Agreed in 2016, the joint EU-China space mission to study Earth's magnetic shield now stands as a relic of a more cooperative era. Set to launch later this month, the mission's satellite named Smile will travel to 121,000 km above the North Pole — as distant from Earth as the two powers that built it feel from each other right now.  The head of the European Space Agency has candidly admitted that no follow-up mission is under discussion. As geopolitical fault lines deepen, Smile may be the last of its kind.

Insight: There’s a running joke that if you throw a rock in Ulaanbaatar, chances are you’ll hit a Toyota Prius. These cars, largely imported from Japan, now dominate Mongolia’s roads, with hybrids accounting for 45% of the country’s roughly 1.5 million vehicles. Yet the Prius boom is revealing the darker side of second-hand clean mobility: many imported vehicles arrive with aging batteries that deteriorate quickly in Mongolia’s extreme climate and end up in a system with limited oversight of disposal or recycling. As cheap imports flood the market and intensify Ulaanbaatar’s chronic traffic congestion, Mongolia is increasingly confronting a problem few green-transition narratives address — what happens when cleaner vehicles reach the end of the road in places without the infrastructure to deal with their toxic afterlife?

Impact: For governments pursuing cheaper, cleaner transport, the real test is whether waste systems, import controls and recycling capacity are built before aging hybrid and electric vehicles begin to fail at scale. Mongolia is now scrambling to do just that, from opening its first lead-acid battery recycling facility to studying hybrid-battery processing, tightening coordination across agencies, and exploring stronger battery-health standards for imports. For other emerging markets in Asia seeing a hybrid boom within their borders, the lesson is clear: without end-of-life planning, the green transition risks becoming a waste management crisis of its own.

Insight: Unruly cyclists beware: as of April 1, Japan is finally cracking down on its 8 million bicycle riders. The enforcement of a 2024 amendment to the 1960 Traffic Act introduces fines for 113 different cycling violations, ranging from ¥3,000 ($19) for misuse of a bell to ¥12,000 for leaving a bike in a parking spot reserved for elderly drivers. Many of the new rules simply apply standards already imposed on motorists more rigorously to cyclists. Others, such as bans on using headphones, cycling with one hand, and carrying "unevenly loaded cargo," are new cyclist-specific offences. Notably, helmet usage remains non-mandatory. Most controversially, the majority of cyclists will now be required to ride on the road rather than the pavement, sharing space with drivers unaccustomed to them.

Impact: Whether the new regime will actually improve safety, or is just a cash grab by the government, remains to be seen. Forcing millions of cyclists onto roads with limited dedicated infrastructure, with greater Tokyo having just 51 km of cycle lanes as of 2023, creates obvious risks. Authorities point out government research showing that in 75% of accidents involving cyclists, the rider was in violation of existing traffic laws. Yet critics note that cycling accidents have already fallen 60% over the past two decades, and that with crime and accidents both declining, the police may simply be casting around for new things to enforce!

Indonesia has started restricting access to platforms including YouTube, TikTok, Instagram and Roblox for users under 16, affecting roughly 70 million children and making it the first country in Southeast Asia to attempt a ban on this scale. While its ability to enforce the ban is unclear, Indonesia’s decision suggests governments in the region — historically one of the most open operating environments for global tech platforms — are increasingly willing to test where their regulatory leverage begins and ends. If the policy works, even partially, it could become a model others watch closely as they rethink how much control states should have over youth access to the digital economy.

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