US-Japan Alliance Digest Vol 4.24

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Details:

• Japan’s Finance Ministry said Dec 26 that it will set aside 7.18 trillion yen ($45.9 billion) for low-interest loans and guarantees through the Japan Bank for International Cooperation (JBIC), in part to support the $550 billion of investment in the US that the allies outlined in July and formalized in October. The announcement follows bilateral online meetings Dec 17 and Dec 23 that marked the start of formal consultations on these pledged joint business and infrastructure projects. METI Minister Akazawa, Commerce Secretary Lutnick, and Energy Secretary Wright joined the second The projects are expected to involve energy infrastructure (including nuclear), grid modernization, AI infrastructure, and critical minerals as a way to “buy down” President Trump’s reciprocal import tariff rate from 25% to 15%, including autos. Trump will choose among recommended projects that are supposed to be profitable.
• An unnamed Japanese official sparked controversy with an off-the-record comment to reporters Dec 18 that Japan “should possess nuclear weapons,” quickly admitting that it was not politically or logistically feasible in the near term. The official is reportedly an advisor to PM Takaichi on security matters, and though Chief Cabinet Secretary Kihara denied any policy change and reaffirmed the so-called 3 non-nuclear principles of no production, possession, or introduction, the ruling party’s chair of its Research Commission on Security (Onodera) argued that “continuing to ignore nuclear discussions is politically irresponsible.” The comment comes on the heels of an article by a former Singaporean diplomat on “The Inevitable Logic of a Japanese Nuclear Weapon” and a draft Pentagon report expecting China to have over 1,000 nuclear warheads by 2030 with no interest in ⁠arms control. Without addressing the comments directly, a US State Dept spokesman praised Japan as “a global leader and a valuable partner to the US on nuclear nonproliferation” and pledged a strong “nuclear deterrent to protect America and our allies, including Japan.”
• Both the US Senate (Dec 17) and House of Representatives (Dec 19) introduced bipartisan resolutions expressing support for Japan and condemning China’s military, economic, and economic coercion on Japan because of Beijing’s objection to comments about Taiwan by Prime Minister Takaichi on Nov 7. Secretary of State Rubio was more equivocal at a Dec 19 press conference describing current Japan-China tensions as “preexisting” and said the US can continue its strong alliance with Japan and still find productive ways to work together with the Chinese government. The US and Japan govts are reportedly planning for a US visit by PM Takaichi before Trump meets China’s Xi in April.
• Japan’s SoftBank Group will acquire US digital infrastructure investor DigitalBridge Group in a deal valued at $4 billion, the companies said on Dec 29. DigitalBridge invests in digital infrastructure sectors such as data centers, cell towers, fiber networks, small-cell systems and edge infrastructure. The deal should close in the second half of 2026.
• The Japan-US Joint Committee announced that US Military Police mistakenly detained a non-SOFA (Status of Forces Agreement) civilian in Okinawa in Nov during unilateral patrols. The US pledged more training to avoid a recurrence.

“US-Japan Alliance Digest” is a bi-weekly summary of bilateral and related developments compiled by Sasakawa USA’s “US-Japan NEXT Alliance Initiative.” To receive “Alliance Digest” via email, contact dhinkley@spfusa.org.