Business Climate Survey: German Business in Japan 2026

Japan Remains a Safe Haven of Stability for German Companies amid Geopolitical Uncertainty

• 91% of German companies reported profits in Japan in 2025, significantly more than in the previous year (82%)
• 68% of companies expect sales rising in 2026, and 72% in 2027
• 65% of companies view Japan as a future global technology leader in innovation and sustainability
• The war in Iran is weighing on business in Japan: 70% cite rising energy costs, 60% cite supply chain disruptions, and 38% cite declining profits

Tokyo/Berlin, April 27, 2026 – German companies are increasingly turning to Japan as a stable anchor in an international environment marked by trade conflicts and geopolitical tensions. This is reflected in the new business climate survey “German Business in Japan 2026” conducted by the German Chamber of Industry and Commerce in Japan in collaboration with KPMG in Germany.

According to the survey, 91% of respondents reported a profit in 2025, compared to 82% in the previous year. The outlook also remains positive: 68% of companies expect sales rising in 2026, while 72% anticipate sales growth in 2027. Investment plans remain broadly stable, but their structure is shifting: While slightly fewer companies (68%) plan to invest up to 5 million euros in Japan over the next three years (previous year: 79%), the share of larger investments is rising significantly. The proportion of companies planning investments between 5 and 50 million euros has increased by 12 percentage points, from 14% to 26%.

“In times of international conflicts and growing trade disputes, robust markets are gaining in importance. Japan appeals to German companies with its economic stability, reliable business relationships, and well-trained workforce. However, the effects of the war in Iran remain noticeable here as well,” says Andreas Glunz, Managing Partner International Business at KPMG in Germany.

German companies view Japan’s economic strategy as a role model

Given the current geopolitical tensions, Japan’s unique role in Asia, and its experience in dealing with China, many German companies are looking to Japan’s strategy for economic security: 59% of the companies surveyed view the sustainable diversification of supply chains as a key lesson from Japan’s approach to strengthening economic resilience.

Furthermore, 42% believe they can learn from Japan’s approach to risk management and disaster preparedness. Further 40% believe that Germany can draw insights from Japan’s experiences and strategies for building recycling capacities for critical raw materials such as rare earths.

“Japan makes it clear: economic stability and security do not happen overnight. Those who diversify their supply chains, actively manage risks, and invest strategically in raw materials will strengthen their economic resilience in the long term,” states Marcus Schürmann, Chief Executive Officer of the German-Japanese Chamber of Commerce and Industry (AHK Japan.

Japan is a major hub for technology and innovation amid profound technological transformation

Japan remains, above all, an attractive sales market for German companies. For 85% of companies, sales potential is the most important reason for their presence in the country.

At the same time, Japan is also gaining importance as a technological benchmark in an AI-driven era of structural transformation: 65% of respondents expect the country to play a leading role in technology, innovation, and sustainability in the future. Technology also plays a central role in investment decisions: 37% of companies cite the digitalization of industry and services as the most important positive driver for their investments in Japan.

Many companies therefore use the location as a reference market for innovation: 65% of companies conduct targeted trend scouting on-site, and 63% monitor Japanese competitors to identify technological and industrial developments at an early stage – an increase of 6 percentage points compared to the previous year. 

“The Japanese market is a leading indicator of forward-looking technological developments. Trends that gain traction here often shape international industries as well and go on to establish themselves globally. Japan is investing heavily in AI, semiconductor technology, automation, and robotics, thereby positioning itself as a preferred partner for German companies,” highlights Andreas Glunz.

Currency risks, high government debt, and a shortage of skilled workers remain the biggest challenges

Despite the positive business performance, many German companies continue to see structural risks: 83% of respondents cite currency risks, as well as fiscal and financial risks as their biggest challenge, an increase of 6 percentage points from the previous year. Factors contributing to this include the volatility and current weakness of the yen, high government debt, and volatile financial markets.

The shortage of skilled workers also remains a key challenge: 81% of companies report difficulties in recruiting qualified employees. The main causes are the aging population, low immigration, and increasing competition for international talent.

War in Iran is taking a massive toll on businesses

A follow-up survey conducted in late March 2026 reveals significant impacts of the war in Iran on the business operations of German companies in Japan: 94% expect rising inflation risks in global markets, 92% anticipate an energy crisis, and 91% foresee increasing geopolitical risks. 88% expect supply chain disruptions due to disrupted transport and logistics routes.

Operational business is primarily impacted by energy prices. 70% of respondents cite higher prices for oil, gas, and electricity as a major disruptive factor. 60% report increasing logistical disruptions. About a quarter of the companies surveyed expect declines in sales (27%) and order intake (23%). 38% are already seeing falling profits because cost increases cannot be passed on.

“Despite the overall positive business performance, many companies are facing short-term challenges because of the war in Iran, particularly regarding energy prices and supply chains. At the same time, structural issues such as the shortage of skilled workers remain critical to long-term development in the Japanese market,” emphasizes Marcus Schürmann.
 

About the Business Climate Survey and Flash Survey

The German Chamber of Commerce and Industry in Japan (AHK Japan), in collaboration with KPMG AG Wirtschaftsprüfungsgesellschaft, conducted the “German Business in Japan 2026” business climate survey from January 30 to February 12 among 175 of the 475 Japanese subsidiaries of German corporations (36%). The survey focused on the economic outlook for German companies in Japan. Following the outbreak of the war in Iran in late February, a flash survey was additionally conducted from March 25 to 27, in which 153 out of 478 companies participated (32%). The results were incorporated into the business climate survey.