The Journal The Authority on Global Business in Japan

Ministry of Economy, Trade and Industry
Gene recombination to bring new materials, medicines

On January 5, the Ministry of Economy, Trade and Industry, in conjunction with the Ministry of Agriculture, Forestry and Fisheries, met with a group of experts to discuss the use of recombinant genetics from animals or plants to create new materials and medications. Cooperation between manufacturers, scholars, and govern­ment, as well as assistance for business ventures and nurturing human resources were discussed, and the govern­ment expects to formulate strategic proposals for harnessing biotechnology by this summer.

It is hoped that the ministries and agencies involved will engage in joint research projects with the private sector and create policies that will encourage small and medium-size enterprises in bio-related areas. One point that clearly calls for atten­tion is the drawing up of rules.

Concerning recombinant gene tech­no­logy, greater utilization of artificial intelligence and Big Data is resulting in the rapid development of so-called genome editing, which enables the efficient modi­fi­ca­­­tion of DNA. Expectations have increased that these efforts will pay off with the develop­ment of new synthetic materials with specific properties, or foods that are conducive to better health.

For example, a type of silkworm that can generate proteins internally within the body can be raised and used to provide basic materials with specific properties for medicines or cosmetics. Developers have already succeeded in creating a silkworm to mass produce phosphorescent silk, which turns green when exposed to ultraviolet light. There is also research being done into a type of rice that, when mixed into food products, helps reduce the discomfort of hay fever caused by cedar pollen.

While major pharmaceutical companies have made considerable investments, participation by the agriculture sector has been extremely limited—particularly in contrast with bio-venture efforts abroad.

Japan, which lags behind Europe and the United States in artificial intelligence and Big Data, has an opportunity to advance in biotechnology to avoid being left behind. The keys to success will be new materials that harness animal or plant genomes that can be applied to areas where Japan has strengths, such as manufacturing and medical.

Financial Services Agency
Rapid reaction to cryptocurrency hacking

Tokyo-based Coincheck, a major dealer in cryptocurrency, suffered a run on its NEM cryptocurrency in late January as the result of a cyberattack, and the company’s offices were raided by investigators from the Financial Services Agency (FSA) on February 2.

As ordered, the company made improve­­ments and submitted a written report by January 13, but the raid was conducted nonetheless. Minister of Finance Taro Aso said this was to protect users. The ministry also requested other dealers to report on the steps they have taken to ensure security. Japan is said to be a world leader in registration and systemization of companies that deal in cryptocurrencies.

On January 26, Coincheck was hacked and clients lost 523 million NEM tokens, valued at about ¥50 billion. Two days later, the company announced ¥46 billion would be refunded to 260,000 clients, and confirmed this had been done on March 13.

On January 29, the FSA issued an order for improvement of business practices based on Japan’s revised Payment Services Act. Coincheck President Koichi Wada and other company executives were summoned to provide an explanation. The ministry determined that the company was lacking in safety management and that the explanations provided, both regarding its responses to clients and explanation of how the hacking occurred, were insufficient. The company faces disciplinary measures and will be required to report on how it will prevent recurrences.

During the ongoing investigation of Coincheck, and until new revisions of the law come into effect, other companies continue their operations as “deemed businesses.” At the root of the FSA’s rapid reaction appears to be its desire to evade criticism over having allowed the troubles to occur.

Keizaikai magazine