newsonjapan

Japan is facing a sharp increase in cyberattacks, with experts warning that artificial intelligence is making it easier for criminals to steal and exploit personal information, while the growing sophistication of online fraud is exposing weaknesses in the country's cybersecurity defenses. An international hacking group known as Qilin has described Japan as "one of the countries with the weakest computer security in the world," a claim that reflects growing concerns over the frequency of attacks targeting Japanese businesses and organizations. Research by Yutaka Sejiyama, assistant director of the Macnica Security Research Center, shows that the number of publicly disclosed incidents involving information leaks caused by cyberattacks in Japan has been increasing since July. By October 9, the country had already recorded 25 such incidents during the month. If the current pace continues, the monthly total could exceed 70, highlighting the accelerating threat to corporate networks and personal data. Sejiyama believes AI is playing a significant role in the increase. "Judging from the circumstances, there is no doubt that AI is being extensively used," he said. However, the technology being exploited by cybercriminals may differ from familiar consumer AI services such as ChatGPT and Gemini. According to Sejiyama, attackers are likely using AI models described as "open-weight," which allow users considerable freedom to customize their operation. Open-weight models provide access to the underlying parameters that determine how an AI system functions, making it possible to modify or adapt the technology for a wide range of purposes. Although this flexibility supports legitimate research and commercial applications, it can also be exploited to develop tools for cyberattacks. By contrast, commercial AI services such as ChatGPT generally place greater restrictions on how their systems can be customized and used, providing safeguards intended to limit malicious applications. The expanding threat is not limited to the initial theft of information. Experts warn that AI is also increasing the value of stolen personal data by making it easier for criminals to combine separate pieces of information and identify opportunities for fraud. Recently disclosed leaks involving images of driver's licenses illustrate the risks. Criminals who obtain such information may be able to impersonate victims, apply for loans from consumer finance companies without their knowledge, or make expensive purchases using their identities. Stolen personal information is also bought and sold on the dark web, a part of the internet accessible through specialized software and frequently associated with illicit marketplaces. Even information that appears relatively harmless when considered on its own can become valuable when combined with other leaked records. For example, a criminal who obtains a person's name and email address may initially have limited opportunities to exploit the information. However, if those details can be connected to another database containing the same person's name and credit card number, the potential for fraud increases considerably. Additional records showing travel reservations, booking dates, and passwords for reservation websites can provide criminals with an even more detailed picture of a victim's activities. AI is particularly effective at identifying connections among large volumes of fragmented data, allowing attackers to assemble individual records into more comprehensive personal profiles. This capability also makes it possible to analyze victims' behavior and determine when fraudulent communications are most likely to appear legitimate. Rather than sending indiscriminate phishing emails, criminals can tailor messages to match a person's actual activities and circumstances, increasing the likelihood that the recipient will respond without suspicion. In September, for example, people who had made genuine accommodation reservations received fraudulent emails containing their actual booking information. The messages instructed recipients to reenter their credit card details or make urgent payments. Because the emails included legitimate reservation details, recipients could have mistaken them for authentic communications from accommodation providers or booking platforms. Such incidents demonstrate how stolen information can be used not only for direct identity theft but also to create highly convincing scams that exploit the trust people place in familiar commercial transactions. With cyberattacks becoming more frequent and personal information leaks increasingly difficult to prevent, experts say individuals need to strengthen the security of their online accounts. Sejiyama recommends avoiding the reuse of passwords across different services and actively enabling multifactor authentication wherever it is available. "Naturally, people should not reuse passwords, but it is also effective to actively use multifactor authentication, such as biometric verification or authentication apps, on websites that support it," he said. Multifactor authentication requires users to provide an additional form of verification beyond a password, such as biometric identification or confirmation through a dedicated authentication application. Once enabled, a password alone is no longer sufficient to access an account. Even if login credentials are exposed in a data breach, the additional security requirement can significantly reduce the risk of unauthorized access. The measure is particularly important as criminals become increasingly capable of linking information obtained from multiple breaches and using it to target individuals through personalized attacks. The rapid growth of AI-assisted cybercrime is creating a new challenge for Japan's digital economy, where the security of personal information depends not only on the defenses maintained by companies but also on the precautions taken by individual users. As attackers adopt increasingly sophisticated technology, experts emphasize that traditional password protection alone is no longer enough, making stronger authentication and greater awareness of information security essential defenses against online fraud. (News On Japan)

Police in Oita Prefecture have revealed that the Kanto region accounts for the largest number of reported sightings of Yoichi Hatta, a fugitive wanted in connection with a fatal hit-and-run incident in Beppu in 2022, with authorities preparing to distribute new wanted posters nationwide from November as the search enters its fifth year. Hatta has remained on the run for more than four years after allegedly driving into two male university students riding motorcycles at an intersection in Beppu, Oita Prefecture, in 2022, killing one of them. He fled the scene barefoot immediately after the incident and has not been located despite an extensive nationwide search. According to Oita Prefectural Police, approximately 4,950 reports of people resembling Hatta have been received from the Kanto region, making it the area with the highest number of reported sightings in Japan. By comparison, around 2,420 reports have been received from across Kyushu, including Oita Prefecture, where the incident occurred. Police also reported an increase in sightings in the Kanto region between August and September, suggesting that public attention to the case remains strong more than four years after Hatta disappeared. The case is being investigated as murder, meaning there is no statute of limitations under Japanese law, allowing police to continue pursuing Hatta indefinitely. In an effort to generate new leads, authorities have prepared updated wanted posters and other publicity materials, which will be distributed throughout Japan beginning in November. Police are urging anyone with information about Hatta's whereabouts or possible sightings to contact Beppu Police Station at 0977-21-2131. (News On Japan)

A series of cyberattacks has disrupted business operations and exposed millions of customer records across Japan, with a ransomware attack on a cloud service provider affecting 495 companies and local governments nationwide, while convenience store operator Lawson has disclosed a separate breach involving more than 2.15 million personal information records. The disruption has extended into Japan's food distribution network, raising concerns about shortages of popular frozen foods at supermarkets and restaurants. At a supermarket in Saitama Prefecture, staff reported difficulties securing supplies of frozen food products manufactured by Nichirei Foods. The company announced on October 8 that a system failure at a logistics service provider had prevented shipments and deliveries of frozen foods. According to Nichirei, logistics operations at distribution centers nationwide have been suspended, affecting approximately 1,200 businesses, including retailers, restaurant operators and food wholesalers. A supermarket employee said the store had received repeated notices explaining that shipments remained suspended because of the system failure. Products affected included frozen yakisoba noodles, takoyaki, chicken rice, katsudon and katsu curry. The disruption was linked to a cyberattack against IDC Frontier, a subsidiary of SoftBank Group that provides cloud computing and data center services. IDC Frontier announced on October 8 that its systems had been compromised by ransomware, a form of malicious software that encrypts data or otherwise disrupts computer operations while demanding payment to restore access. The attack has affected 495 companies and local governments using the provider's cloud services. Among the disruptions, official websites operated by Ibaraki Prefecture and Kodaira City in Tokyo became inaccessible. The incident illustrates how an attack on a single technology provider can spread across unrelated industries and public services, particularly when organizations depend on shared cloud infrastructure for essential operations. Separately, Lawson announced on October 9 that unauthorized access by a third party had resulted in the exposure of personal information belonging to customers registered with its Lawson ID membership service. The breach involved 2,155,345 records, representing approximately 10% of Lawson ID members, as well as 26 additional records associated with an application. The information included names, addresses and telephone numbers. The convenience store operator's disclosure adds to growing concerns about the vulnerability of customer databases maintained by major Japanese retailers and service companies. Another major breach was disclosed on October 9 by Daiichikosho, the operator of the Big Echo karaoke chain, which said approximately 8.724 million personal information records may have been compromised. The potentially exposed information included customer telephone numbers and other personal details. According to the company, the incident originated from a cyberattack targeting a device used by an employee of an outside contractor entrusted with handling personal information. The breach highlights the security risks associated with outsourcing customer data management, as vulnerabilities at contractors and other third-party service providers can expose information held by major corporations. A man registered as a Big Echo member expressed concern that information he had routinely provided to businesses could now be accessible to unknown parties. He said he had previously supplied personal details without much consideration but would need to be more careful in the future. Cyberattacks he had regarded as distant problems now felt personally relevant, he added, particularly because he regularly registered information through smartphone applications. The succession of incidents comes as international ransomware operations face increasing scrutiny from law enforcement authorities. One group attracting attention is Qilin, an international ransomware organization suspected of targeting companies and institutions around the world. A Russian national identified as a member of the group was detained in Osaka in May 2026 and subsequently transferred to German authorities, who had been investigating the organization's activities. German investigators described the arrest as a significant development in their efforts to dismantle the ransomware operation. "We arrested one of the key figures," a German official said, adding that the suspect had expected to enjoy a vacation in Japan but was instead eating bread and cheese in a German prison rather than sushi. According to German authorities, the group had demanded approximately 450 billion yen in ransom payments over the past four years, of which more than 6.3 billion yen had actually been paid. Authorities estimated that approximately 4,000 companies and organizations worldwide had been targeted. In a statement obtained on October 8, German authorities also raised concerns about Japan's cybersecurity preparedness, describing the country as one of the most vulnerable in the world in terms of computer security. The warning comes as Japanese companies increasingly depend on interconnected digital systems, creating the possibility that attacks against technology providers, logistics contractors and data management companies can have consequences far beyond the original targets. In response to the growing number of incidents, the Japanese government announced at an interministerial meeting on October 9 that it would request stronger cybersecurity measures from business operators. The latest breaches have nevertheless raised questions about whether conventional defensive measures are sufficient, particularly as attackers increasingly exploit weaknesses in systems operated by outside service providers. Cybersecurity discussions are also shifting toward the amount of personal information companies collect and retain. A digital policy adviser to the government suggested that personal data, traditionally regarded as a valuable corporate asset, is increasingly becoming a potential liability as the frequency and scale of breaches grow. Rather than relying exclusively on preventing unauthorized access, companies should assume that their security systems may eventually be penetrated and reconsider how much personal information they need to retain. One approach is to reduce the amount of customer data stored by individual businesses while maintaining reliable methods of identity verification. Japan's Digital Agency has introduced a digital authentication service that enables identity verification through smartphones and My Number cards. The system allows businesses to confirm information such as a customer's identity or age without necessarily collecting and retaining large volumes of personal data for extended periods. For example, financial institutions must verify a customer's identity when opening a bank account, but digital authentication can provide a means of completing that process without requiring every business to maintain extensive customer databases. The Digital Agency provides the authentication infrastructure rather than centrally accumulating vast quantities of customer information, with the service functioning more like a shared public utility or payment network. By allowing businesses to verify specific information when required, the technology could reduce the need to hold personal records for long periods and limit the potential damage caused by future breaches. The latest incidents underscore the growing economic consequences of cybercrime in Japan, where attacks are no longer confined to information technology departments but can interrupt food supplies, disable government websites and expose the personal records of millions of consumers. As companies and municipalities strengthen their defenses, the challenge is increasingly not only how to prevent cyberattacks, but also how to maintain essential services and minimize the information exposed when security systems fail. (News On Japan)

Tokyo's Bunkyo Ward will expand restrictions on private lodging businesses across the entire ward from January 2027 after the ward assembly approved an ordinance amendment on October 7 aimed at tightening controls on minpaku short-term rentals. Bunkyo Ward already prohibits weekday operation of minpaku facilities in areas around schools and in residential-only zones. The latest amendment adds commercial districts, including areas around Tokyo Dome, bringing the entire ward under the restrictions. During committee deliberations on October 7, assembly members said the measure was intended to address concerns from residents before problems became more serious. One member said the assembly had decided to submit the proposal because waiting until local problems worsened would be too late. Questions were also raised over why commercial and neighborhood commercial districts should be included in the regulations. Members explained that Bunkyo has many condominium buildings in such areas, creating a gap between official land-use zoning classifications and how neighborhoods are actually used. The expansion reflects growing concern that minpaku operations could shift into Bunkyo as neighboring wards tighten their own regulations. Shinjuku, Toshima and Taito wards, all of which border Bunkyo, have strengthened restrictions on private lodging businesses. Bunkyo's amendment is partly intended to prevent operators from relocating into the ward to avoid tighter rules elsewhere. The revised ordinance will take effect in January 2027. (News On Japan)

Tokyo stocks fell on October 2, with the Nikkei 225 closing at 68,309, down 647 points, as investors took profits after the previous day’s sharp rally and turned cautious ahead of U.S. employment data, rising global bond yields and renewed concern over energy prices. The broader TOPIX fell 40.98 points to 4,091.00, showing that the decline was not limited to the price-weighted Nikkei. The selloff hit technology, autos, pharmaceuticals, banks and insurers, while a small number of semiconductor-related shares limited the downside. The Nikkei opened lower at 68,313 after jumping more than 2,200 points on October 1. It briefly recovered to 68,741 in the morning, but buying did not last. The index later fell to 68,132 and finished near the lower end of the day’s range. The market’s weakness reflected a pause after the powerful October 1 rally, when semiconductor shares surged on strong U.S. technology sentiment and Micron-related optimism. Investors used October 2 to take profits, particularly in shares that had risen sharply during the previous session. TOPIX’s decline was almost the same as the Nikkei’s in percentage terms, suggesting that the weakness had broadened beyond the high-priced index names. Financials, autos and domestic shares also struggled as investors reassessed the impact of high bond yields and a weak yen. Nikkei CNBC-style market commentary would likely focus on a market that had become overheated after the previous day’s surge. The Nikkei’s failure to hold its morning recovery showed that investors were reluctant to chase prices before the U.S. jobs report. The U.S. employment data due later on October 2 became the most important overseas event. Investors were watching whether the September jobs report would strengthen expectations for another Federal Reserve rate hike and push U.S. yields even higher. Global bond markets remained under pressure. The U.S. 10-year Treasury yield had recently climbed above 5%, while concerns over inflation, energy prices and government borrowing kept investors cautious toward equities. Higher yields are a problem for stocks because they raise the discount rate applied to future earnings and make bonds more attractive compared with equities. This is especially important for high-valuation technology and AI-related shares. Japan’s own bond market remains under strain. The 10-year Japanese government bond yield has been trading near levels not seen since the 1990s, reflecting the Bank of Japan’s September rate hike and expectations that policy may continue to normalize. The BOJ raised its policy rate to 1.25% in September, the highest level in 31 years. The decision marked a major shift after decades of ultra-low rates, but the yen has remained weak because investors judged the central bank’s guidance as gradual rather than aggressively hawkish. Economy Minister Minoru Kiuchi said October 2 that Japan is no longer in a deflationary period and does not need excessively loose policy aimed at forcing inflation higher. His remarks reinforced the view that the government is no longer presenting itself as strongly reflationist. That message matters for markets because investors are trying to judge how much political resistance the BOJ will face if it raises rates again. If the government is more accepting of normalization, the BOJ may have more room to tighten further. At the same time, higher rates create risks. They can support the yen and reduce imported inflation, but they also increase borrowing costs for households, companies and the government. They can also pressure growth shares and reduce the appeal of high-valuation sectors. The yen traded near the 158 level against the dollar, remaining weak even after the BOJ’s September rate hike. A weak yen supports exporters by raising the yen value of overseas earnings, but it also increases import costs for energy, food, raw materials and consumer goods. For exporters, the yen remains a tailwind. Automakers, machinery makers, precision-equipment companies and electronics firms can benefit from the currency’s weakness. But on October 2, autos and some exporters still fell as investors focused more on profit-taking, higher yields and global risk aversion. Honda was among the weaker names, while Toyota and other large exporters also lacked momentum. The market appeared less willing to reward yen-sensitive stocks after the Nikkei’s sharp rise earlier in the week. For households, the weak yen remains a burden. It keeps pressure on prices for imported food, fuel, energy and consumer goods. Even with wage growth improving, many households remain sensitive to costs for groceries, gasoline, electricity, transport and services. Oil prices were another major concern. Brent crude remained above $100 a barrel, supported by continuing Middle East tensions and supply uncertainty. For Japan, high oil is a direct inflation risk because the country imports most of its energy. Higher crude prices feed into gasoline, electricity, aviation fuel, shipping, logistics, chemicals and manufacturing. If oil remains above $100 while the yen stays weak, imported inflation could intensify again. That combination makes the BOJ’s job harder. A weak yen and high oil strengthen the case for further rate increases, but higher rates can unsettle equities, bond markets and borrowers. Technology and semiconductor shares were mixed after the previous day’s powerful advance. Some chip names resisted the broader selloff, but the group as a whole no longer had the same momentum seen on October 1. Tokyo Electron and Advantest remained central to the Nikkei’s direction. Both stocks have large index weightings and are among Japan’s clearest beneficiaries of the global AI semiconductor cycle. Tokyo Electron remains a key supplier of semiconductor manufacturing equipment, while Advantest is closely tied to demand for advanced AI chip testing. Their movements can strongly affect the Nikkei even when the broader market is weak. SoftBank Group fell, weighing on the index. The company remains Tokyo’s most visible proxy for global AI investment because of its exposure to OpenAI, Arm, robotics and digital infrastructure. Its decline showed that investors were taking profits in high-profile AI names after the recent rally. Kioxia Holdings also remained in focus. The memory-chip maker is tied to high-bandwidth memory, AI servers and data-center storage demand, but its share price has been volatile as investors reassess the memory cycle and global AI spending. Ibiden, Fujikura, Furukawa Electric, Murata Manufacturing, TDK, Taiyo Yuden, Lasertec, Screen Holdings and Kokusai Electric remain important indicators of Japan’s AI supply-chain strength. These companies represent advanced substrates, optical fiber, electronic components, chip equipment, power systems and data-center infrastructure. The AI trade remains powerful, but October 2 showed that it is still vulnerable to profit-taking and higher yields. Investors continue to believe in long-term demand for chips, memory, networks and data centers, but they are increasingly selective after the Nikkei’s sharp gains. The market is no longer treating every AI-related stock as an automatic buy. Investors are paying closer attention to valuation, power constraints, funding costs, regulation and whether earnings can justify the pace of share-price gains. Pharmaceutical shares were also weak. Chugai Pharmaceutical was among the notable decliners, adding pressure to the Nikkei. Defensive sectors did not provide enough support to offset technology and export weakness. Banks and insurers also came under pressure despite the higher-rate environment. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Mizuho Financial Group and Tokio Marine were among stocks watched closely after recent rate-driven buying. Higher interest rates can support banks and insurers by improving lending margins and investment income, but a rapid rise in bond yields can also create valuation losses and raise concern over the broader economy. On October 2, investors treated financials cautiously. The weakness in financial shares also reflected uncertainty over the BOJ’s next move. If the central bank tightens slowly, the earnings benefit for banks may be more gradual than some investors hoped. If it tightens too quickly, the broader market may come under pressure. The Growth Market remained vulnerable as well. Smaller growth shares are sensitive to higher yields because their valuations often depend on profits expected further in the future. When bond yields rise, investors tend to reduce exposure to speculative growth names. The global backdrop was cautious. Asian shares were mixed, with Hong Kong falling sharply and mainland Chinese markets closed for a holiday. Investors were watching U.S. jobs data, oil prices and bond-market volatility. The U.S. 10-year yield’s move above 5% has become a key global market pressure point. High U.S. yields support the dollar, complicate Japan’s effort to stabilize the yen, and reduce the appeal of growth stocks worldwide. The dollar-yen rate near 158 remains one of the most important signals for Tokyo. A move toward 160 would support exporters but revive intervention and inflation concerns. A rebound toward 153 would ease import costs but could hurt exporter earnings and trigger carry-trade unwinding. Japanese authorities remain alert to excessive currency moves. Previous rate checks and intervention-related comments have kept traders cautious, but the yen has continued to struggle because the U.S.-Japan interest-rate gap remains wide. The domestic economy is sending mixed signals. Japan is no longer in deflation, according to the government’s latest messaging, and wages have improved. But households are still dealing with high living costs, and companies face rising labor, energy, logistics and financing costs. For companies, the key question remains pricing power. Firms with strong brands, recurring demand, global competitiveness or exposure to long-term investment are better positioned. Companies without pricing power face margin pressure if costs keep rising. Prime Minister Sanae Takaichi’s government is also trying to balance household relief, defense spending, fiscal discipline and long-term industrial investment. The government’s growth strategy emphasizes semiconductors, artificial intelligence, energy security, defense, shipbuilding, robotics, space and other strategic sectors. Those priorities support many of the companies investors have favored this year. But higher bond yields make the funding question more difficult and increase pressure on the government to show fiscal credibility. The Finance Ministry’s budget process remains closely watched because higher assumed interest rates raise projected debt-service costs. Investors want evidence that Japan can support households and strategic industries without undermining confidence in public finances. The October 2 market also showed how quickly sentiment can shift after a major rally. The Nikkei’s October 1 surge brought the index close to 69,000, but the following session showed that investors remain sensitive to oil, yields and U.S. data. The technical picture remains constructive but fragile. The Nikkei stayed above 68,000, which is still well above the levels seen during the mid-September correction. However, the failure to extend the October 1 rally suggests that the market needs stronger breadth to move sustainably higher. The 69,000 level now becomes the next major upside marker. The Nikkei approached it on October 1 but failed to build further momentum on October 2. A clear break above that level would signal renewed strength, while repeated failures could invite more profit-taking. TOPIX’s fall below 4,100 is also important. A durable rally needs participation from banks, insurers, exporters, trading houses, industrials, domestic-demand shares and technology names. On October 2, the broader index showed that participation was weakening. What to watch next: whether the Nikkei can hold above 68,000, whether TOPIX can regain 4,100, and whether U.S. jobs data push Treasury yields higher or give global equities relief. Investors will monitor SoftBank Group, Tokyo Electron, Advantest, Kioxia, Ibiden, Fujikura, Furukawa Electric, Murata Manufacturing, TDK, Taiyo Yuden, Lasertec and Screen Holdings for signs of whether the AI trade can regain momentum after profit-taking. Banks and insurers will also remain important. Mitsubishi UFJ, Sumitomo Mitsui, Mizuho, Resona, Tokio Marine and other financials will show whether higher-rate expectations can still support value shares. The yen near 158 to the dollar remains the most important domestic signal. Further weakness would support exporters but intensify inflation and intervention concerns. A rebound would ease import costs but could pressure exporters. JGB yields are the second key signal. A stable bond market would help equities, while another rise in 10-year or super-long yields would pressure valuations and fiscal policy. Oil prices are the third signal. A sustained pullback would help Japan’s inflation outlook, while another rise above $100 would keep pressure on households and companies. October 2 showed that Tokyo’s market remains highly sensitive to global yields and energy prices even after a powerful AI-led rally. The Nikkei remains elevated, but profit-taking in technology, autos and pharmaceuticals showed that investors are unwilling to ignore high oil, a weak yen, rising bond yields and the risk that stronger U.S. jobs data could push the Federal Reserve toward another rate hike. (News On Japan)