Expo 2025 Osaka Elevates Japan-Malaysia Economic Relations - JETRO

By Anas Abu Hassan

KUALA LUMPUR, July 10 (Bernama) -- The Expo 2025 Osaka serves as a launchpad for deeper cooperation in key economic sectors, proving to be a significant platform for enhancing economic relations between Japan and Malaysia, according to the Japan External Trade Organisation (JETRO).

JETRO Kuala Lumpur managing director Koichi Takano noted that the expo presents a great opportunity to elevate cooperation between Japan and Malaysia to a new level as it opens up a long-term investment space that will continue to deliver benefits.

“Looking ahead, JETRO anticipates robust growth in investment across decarbonisation, renewable energy, digital technology, the halal sector and high-value services. 

“Malaysia’s role as the ASEAN chair in 2025 is expected to further accelerate cooperation, particularly through its involvement in the Asia Zero Emission Community (AZEC) initiative championed by Japan," he told Bernama.

The AZEC Summit, scheduled to be held in Malaysia this year, marks a significant milestone in energy collaboration between the two countries.

According to Takano, the ongoing negotiation of the Joint Crediting Mechanism is expected to unlock more opportunities for Japanese environmental technologies to be applied in Malaysia.

“JETRO has compiled a catalogue of Japanese companies contributing to decarbonisation and is actively supporting their expansion in the Malaysian market. 

“These efforts are complemented by growing investment interest in consumer-related sectors such as food products, healthcare, education and Japanese lifestyle services," he noted.

To unlock the full potential of Japan-Malaysia trade ties in the coming decade, Takano stressed that strengthening the existing relationship of trust is the most critical step. 

He said Japan, once Malaysia’s largest investor, retains strong ties with the country, and JETRO remains committed to serving as a bridge for future cooperation.

“Economic security, energy transition and resilient supply chains are shared priorities. Building on our longstanding trust, we can create lasting partnerships that benefit both nations.

“JETRO will continue to lead efforts in business matching, market entry support and strategic engagement, ensuring Japanese companies remain active and invested in Malaysia’s future,” he said. 

Japanese firms sees Malaysia as a hub

In addition, Takano said Japanese companies are also taking advantage of strategic tax incentives and increasingly considering Malaysia for regional headquarters. 

He believed that Malaysia’s attractiveness is further enhanced by its competitive cost base and growing role in regional value chains.

“JETRO is playing a key role in supporting these developments by providing updated information on policies, investment incentives and strategic sector opportunities.

“With Malaysia’s current economic growth at 5.1 per cent, compared with 3.6 per cent the previous year, Japanese firms are showing increased confidence in the local market,” he added. 

The organisation’s 2024 Business Conditions Survey revealed that profitability among Japanese companies in Malaysia continues to exceed the ASEAN average -- attributable to strong performance in manufacturing, particularly in sectors such as electrical and electronics, food processing, transport equipment and general machinery.

Takano explained that Japanese small and medium enterprises (SMEs) have long contributed to Malaysia’s manufacturing sector and continue to evolve with the changing economic landscape. 

He expressed optimism that extending local SME support schemes to Japanese SMEs could further strengthen their resilience and integration.

TVET reform a shared challenge

In addressing workforce development, JETRO acknowledged the Malaysian government’s efforts through Technical and Vocational Education and Training (TVET) reforms as Japan also faces similar labour challenges and is responding by promoting robotics, artificial intelligence and strategic foreign workforce integration.

He emphasised that these shared challenges require long-term commitment, continuous dialogue and policy coordination. 

“Malaysia’s Look East Policy has played a key role in fostering bilateral understanding, with more than 28,000 Malaysians having studied in Japan to date. 

“Collaboration in education also continues through institutions such as the Malaysia-Japan International Institute of Technology and the University of Tsukuba Malaysia,” he noted. 

-- BERNAMA