The historically weak yen market began around March 2022, primarily caused by the large gap in interest rates between the United States, where rates were rising, and Japan, which failed to raise rates due to a prolonged economic downturn.

The Federal Reserve Board (FRB), the U.S. counterpart of the Bank of Japan, decided to raise interest rates in March 2022 to curb inflation. As a result, the exchange rate, which averaged about 110 yen per dollar, soared to over 150 yen per dollar by October of that year.

To counteract this, the Bank of Japan conducted several yen-buying interventions to slow the yen’s depreciation, eventually ending its negative interest rate policy in 2024. When U.S. inflation eased, the yen’s depreciation was expected to stabilize. However, speculation in the U.S. market that inflation would accelerate again led to renewed yen depreciation, with the exchange rate exceeding 160 yen per dollar—the highest level in 34 years.

Thus, the yen-dollar exchange rate can be said to be heavily influenced by the monetary policy of the FRB.

Despite the FRB’s continued rate hikes, the American economy appeared resilient due to the success of government financial policies, which boosted U.S. stock prices. Meanwhile, the weak yen and the relative affordability of Japanese stocks attracted investors, pushing the Nikkei Stock Average to a record high of 42,224 yen in July 2024.However, in August, the Nikkei Stock Average experienced a significant decline of 12%, the largest drop in its history—surpassing even the losses recorded on Black Monday.

The year 2024 saw many national elections, most of which reflected the rivalry between two major parties: the ruling party and the main opposition. It was not uncommon for opposition parties to win, reflecting the will of the people. For instance, in Japan in 2009, the Democratic Party, the main opposition, won the House of Representatives election, leading to a change in government.

In the UK, the two major parties, the Conservative Party and the center-left Labour Party, are traditional rivals. In July 2024, the Labour Party won a landslide victory in the House of Commons, returning to power after 14 years. Similarly, in France, the left-wing opposition coalition triumphed in the legislative elections.

The European Parliament elections, held across 27 member countries, saw the pro-EU (center-right) European People’s Party secure the most seats. However, the EU-skeptical far-right coalition also gained ground, signaling growing conservative momentum in Europe.

Changes in government also occurred in Asia and the Near East. In South Korea, the liberal Democratic Party of Korea, the main opposition, won a single-party majority in the general election, defeating the ruling party. In Iran, reformist Masoud Pezeshkian defeated the conservative candidate in the presidential election, ending decades of conservative dominance and establishing a reformist government for the first time in 19 years. In contrast, some countries saw no change in government. In Indonesia’s presidential election, the largest direct election in the world, former Defense Minister Prabowo Subianto won, continuing the policies of the previous administration. In Taiwan, Lai Ching-te, chairman of the Democratic Progressive Party, which advocates for Taiwan’s sovereignty, emerged victorious in the presidential election.

The moon attracts significant attention as a potential base for missions to Mars. There is evidence suggesting the possibility of water in the lunar south pole region, and if confirmed, it could be utilized to produce hydrogen for rocket fuel and machinery, as well as oxygen to support human life. This has increased interest in building moon bases, industrial facilities, and launch sites. Due to the moon’s weaker gravity, launching rockets from its surface is considered more fuel-efficient.

The race to explore the moon began as part of the space exploration competition between the United States and the former Soviet Union, but it slowed down in later decades. However, in the 2010s, China revived lunar exploration, followed by India in 2023 and Japan in 2024. Currently, five countries have successfully landed on the moon.

In June 2024, China’s Chang’e-6 mission made history by returning soil samples from the far side of the moon to Earth for the first time, showcasing advanced technical capabilities to the world.

Space exploration has also expanded to include private companies, with increasing numbers of rocket and satellite launches. The Artemis Program, a U.S.-led moon exploration project, aims to achieve a manned lunar landing for the first time since the Apollo Program in the 1960s and 1970s. The Artemis Program includes participation from 38 countries, including Japan, and private companies like SpaceX. SpaceX is conducting trial flights of its Starship rocket, which is expected to play a key role in the program. The schedule includes a manned lunar orbit in 2025 and a moon landing by American astronauts in 2026. A Japanese astronaut is expected to participate in a lunar mission after 2028.

Meanwhile, the International Lunar Research Base, led by China and involving 11 countries, including Russia, is another major initiative. Despite collaboration in some areas, competition between the U.S. and China in space exploration remains intense.

 Russia launched its invasion of Ukraine on February 24, 2022. Despite being outmatched in terms of population and military power, Ukraine, led by President Zelensky, sought and secured international support from the United States, Europe, Japan, and other nations. This aid enabled Ukraine to continue resisting the Russian offensive.

To end the prolonged war, President Zelensky participated in the G20 summit via video in November 2022, where he proposed a set of Ten Peace Formulas. These included measures such as ensuring the safety of nuclear facilities and securing global food supplies. In contrast, Russian President Vladimir Putin proposed a peace plan that required Ukraine to recognize the independence of the four regions annexed by Russia.

In June 2024, 92 nations attended the World Peace Summit held in Switzerland. Russia was not invited, and China declined to participate. After the summit, a joint statement was issued emphasizing nuclear safety, food security, and the abolition of slavery. However, ten participating countries refused to endorse the statement. While peace negotiations involving Russia and neutral intermediaries are essential, achieving them appears exceedingly difficult.

In August 2024, Ukraine launched large-scale cross-border attacks into Russia’s Kursk region, marking the most significant escalation since the invasion began.

Russia’s primary objective in the invasion was to maintain its influence over Ukraine, a crucial buffer state, and to prevent NATO’s eastward expansion. However, NATO’s enlargement continued, with Finland joining in 2023 and Sweden following in 2024, bringing the alliance’s membership to 32 countries.

The conflict between Ukraine, a major exporter of grain, and Russia, a leading energy exporter, has caused a global surge in food and energy prices, severely impacting the world economy.

The Gaza Strip is one of the two autonomous regions in Palestine. Often referred to as a “jailhouse with no ceiling,” it is isolated by the extensive fences built by Israel. The region is effectively governed by Hamas, an Islamic fundamentalist organization.

Long-standing religious disputes and territorial conflicts are deeply intertwined in Palestine, leading to unending strife. Since 1948, the year of Israel’s founding, many Palestinians were forced to live in restricted areas until 1993, when the Oslo Accords were signed. These accords established the Palestinian Interim Self-Government Authority and initiated peace negotiations between Israel and Palestine.

Despite these efforts, hostilities persisted. In 2017, then-US President Donald Trump recognized Jerusalem as the capital of Israel, exacerbating tensions. In May 2021, large-scale clashes erupted in Jerusalem and the Gaza Strip, further complicating peace efforts.

In October 2023, Hamas launched large-scale attacks on Israel, killing and abducting numerous civilians. Israel responded with airstrikes and other military actions, plunging the region into a state of war.

The Gaza Strip, under blockade by the Israeli military, has long faced severe shortages of basic necessities. This ongoing humanitarian crisis drew global condemnation, even as Israel intensified its attacks on the Rafah district in the south.

In May 2025, the International Court of Justice (ICJ) ordered Israel to halt its military invasion of the Rafah district immediately. However, the Israeli military did not comply.

Generative AIs (artificial intelligences) learn from vast amounts of data available on the internet and can produce new text, images, voices, and other outputs in a short amount of time. Since OpenAI, an American start-up, launched ChatGPT—an interactive AI—in late November 2022, the adoption of this technology has grown significantly across various industries. Other companies have followed suit, such as Google with Gemini and Microsoft with Copilot.

In 2024, a new smartphone with integrated generative AI capabilities was released. While it was previously common to access generative AIs via the internet, this phone indicates a trend toward on-device AI operations, suggesting that such on-demand functionality may become more widespread in the future. In China, where the adoption of electric vehicles is rapidly accelerating, one automobile company is aiming to stand out by producing intelligence-controlled vehicles.

In May 2024, the European Union became the first in the world to pass a law regulating AI. This legislation defines AI systems, outlines the obligations for businesses, and specifies penalties for violations. It is set to take effect in 2026.

In Japan, the government released the “Guidelines for AI Business Operators” in April 2024. These guidelines, which are non-binding, call on companies to adhere to safety standards and other requirements. Meanwhile, as global regulations tighten, Japan’s AI Strategy Conference has begun discussions on introducing legally enforceable AI restrictions.

Across Asia, there is currently no unified legal framework governing generative AI. This lack of common rules is often highlighted as a potential risk for companies seeking to expand AI-related businesses in the region. It suggests that collaborative efforts among Asian nations to establish shared regulations may be necessary.

Economic security is defined as the protection of a nation and its people from risks that threaten the foundations of the economy and everyday life. In 2020, when the novel coronavirus became a global pandemic, Japan faced several challenges, including shortages of surgical masks and medical supplies, as well as disruptions in supply chains.

In the autumn of 2020, as economic activity, which had been stagnant due to the coronavirus, began to recover, demand for semiconductors surged. During this period, the U.S. government implemented legal restrictions on transactions with Chinese semiconductor companies, which were deemed national security threats due to concerns such as espionage and unauthorized technology transfers. This move exacerbated the global semiconductor shortage.

Furthermore, threats to economic security have intensified due to factors such as cyberattacks from foreign entities, leaks of cutting-edge technological information, and disruptions caused by Russia’s export restrictions on food, fertilizers, and energy.

To address these challenges, in May 2022, the Japanese government enacted the Economic Security Promotion Act, which includes four key pillars:

The government plans to investigate issues such as over-reliance on certain countries for essential materials like semiconductors, vulnerabilities in infrastructure, and risks of unauthorized technology transfers. Simultaneously, it aims to support the domestic development of cutting-edge technologies.In December 2022, semiconductors and ten other materials were designated as nationally critical resources. Moreover, in 2024, the government passed a law to establish a “Security Clearance System,” granting government employees and private individuals the qualifications required to handle national security-related confidential information.

The global climate system has undergone significant changes, resulting in major issues that threaten people worldwide. Recently, Japan has faced numerous disasters, including torrential rain, heat waves, and the crop damage caused by these events. The primary driver of this climate change is global warming due to greenhouse gases.

Under the Paris Agreement, which came into full operation in 2020, all nations—both developed and developing—agreed to limit the global temperature increase to well below 2 degrees Celsius above pre-industrial levels, ideally striving to keep it within 1.5 degrees Celsius. This commitment involves measures such as decarbonization to address the crisis.

According to the Sixth Assessment Report published by the IPCC, global temperatures have already risen by 1.1 degrees Celsius and may reach a 1.5-degree increase within the next 10 to 20 years. As global warming intensifies, the frequency and severity of climate-related natural disasters are worsening. For instance, in Japan, the average temperature during the summer of 2024 (June to August) was 1.76 degrees Celsius higher than usual, tying the record high set in 2023.

To combat climate change, two key strategies are “mitigation” and “adaptation.” Mitigation refers to measures aimed at halting the progression of global warming, such as decarbonization and promoting energy efficiency through renewable energy. Adaptation involves preparing for the risks posed by climate change, such as preventing or alleviating the impacts of extreme weather events and ensuring water security. In agriculture, discussions are underway to transition from traditional species to subtropical or tropical ones better suited to rising temperatures, alongside efforts to develop climate-resilient varieties. 

Global efforts to address the crisis of global warming began with the United Nations Framework Convention on Climate Change, adopted in 1992. The Paris Agreement, which established international goals and initiatives for combating climate change, was adopted at COP21 in Paris at the end of 2015.

In Japan, former Prime Minister Yoshihide Suga announced in October 2020 the Carbon Neutral policy, aiming to achieve net-zero greenhouse gas emissions by 2050. He also set a target of reducing emissions by 46% compared to 2013 levels by 2030, with an ideal reduction of 50%. Decarbonized energy sources, including renewable energy and low-carbon alternatives, are central to reducing carbon dioxide emissions. However, achieving absolute zero emissions remains challenging. Therefore, other measures, such as Carbon Capture and Storage (CCS), afforestation, and technologies to prevent carbon dioxide emissions, are being actively pursued.

In May 2023, Japan enacted the GX Promotion Bill and GX Power Source Bill to accelerate Green Transformation. The GX Promotion Bill authorized the issuance of 20 trillion yen in government bonds called “GX Economic Transition Bonds.” The government aims to raise funds from investors to support the development and capital investment in renewable energy and hydrogen technologies. It seeks to mobilize 150 trillion yen in public and private investment over 10 years. To ensure returns for investors, the government plans to introduce a levy system for fossil energy importers and a carbon tax on power generation companies as part of an emissions trading scheme set to start in 2033.

The GX Power Source Bill promotes the use of nuclear power by extending the operational lifespans of nuclear plants. Additionally, the government has formulated the Guidelines for Resource Diplomacy with an Eye on GX to secure resources essential for Green Transformation and foster strong relationships with resource-rich nations.