{"id":57112,"date":"2025-12-11T07:08:24","date_gmt":"2025-12-11T11:08:24","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/global-economic-shifts-japan-backs-ai-chips-with-trillions-in-loans-eu-eyes-combustion-engine-delay-and-extra-budget-passed-in-tokyo\/57112\/"},"modified":"2025-12-11T07:08:24","modified_gmt":"2025-12-11T11:08:24","slug":"global-economic-shifts-japan-backs-ai-chips-with-trillions-in-loans-eu-eyes-combustion-engine-delay-and-extra-budget-passed-in-tokyo","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-economic-shifts-japan-backs-ai-chips-with-trillions-in-loans-eu-eyes-combustion-engine-delay-and-extra-budget-passed-in-tokyo\/57112\/","title":{"rendered":"Global Economic Shifts: Japan Backs AI Chips with Trillions in Loans, EU Eyes Combustion Engine Delay, and Extra Budget Passed in Tokyo"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Japan&#39;s three megabanks<\/strong> have expressed their intent to provide up to <strong>2 trillion yen<\/strong> (approximately $13.7 billion USD) in loans to domestic <strong>AI chipmaker Rapidus<\/strong>, marking a significant private sector commitment to the nation&#39;s advanced semiconductor ambitions.<\/li>\n<li>The <strong>European Union<\/strong> is considering a <strong>five-year delay<\/strong> to its 2035 ban on new combustion engine vehicle sales, with a critical review now scheduled for December 16, driven by intense lobbying from the automotive industry and concerns over the pace of EV adoption.<\/li>\n<li><strong>Japan&#39;s Lower House<\/strong> has approved an <strong>extra budget for fiscal year 2025<\/strong>, allocating <strong>18.3 trillion yen<\/strong> to fund a comprehensive economic policy package aimed at tackling inflation and bolstering economic growth.<\/li>\n<\/ul>\n<h2>Japan&#39;s Megabanks Fuel Rapidus with Trillions in AI Chip Investment<\/h2>\n<p>In a major boost for Japan&#39;s burgeoning semiconductor industry, the nation&#39;s three largest banking groups \u2013 <strong>Mitsubishi UFJ Financial Group<\/strong> (<a href=\"\/stock\/MUFG\">MUFG<\/a>), <strong>Sumitomo Mitsui Financial Group<\/strong> (<a href=\"\/stock\/SMFG\">SMFG<\/a>), and <strong>Mizuho Financial Group<\/strong> (<a href=\"\/stock\/MFG\">MFG<\/a>) \u2013 have signaled their intention to provide up to approximately <strong>2 trillion yen<\/strong> in loans to <strong>AI chipmaker Rapidus<\/strong>. This substantial financial backing underscores Japan&#39;s strategic push to regain a leading position in advanced chip manufacturing, particularly in the critical 2-nanometer technology. Rapidus aims to commence mass production of these cutting-edge chips by <strong>2027<\/strong>.<\/p>\n<p>The commitment from these financial institutions is crucial, as Rapidus faces an estimated total investment requirement of <strong>5 trillion yen to 7 trillion yen<\/strong> to establish its advanced manufacturing plant in Hokkaido. While the Japanese government has already pledged significant subsidies, including an initial <strong>920 billion yen<\/strong> and an additional <strong>200 billion yen<\/strong> for fiscal year 2025, private sector involvement is vital for the long-term success of the venture. The government is also exploring options for loan guarantees to further de-risk private investment in the chipmaker.<\/p>\n<h2>EU Considers Delaying Combustion Engine Ban Amid Industry Pressure<\/h2>\n<p>The <strong>European Union<\/strong> is reportedly weighing a potential <strong>five-year delay<\/strong> to its ambitious 2035 ban on the sale of new combustion engine vehicles. A crucial review of this policy, a cornerstone of the EU&#39;s Green Deal, has been postponed to <strong>December 16<\/strong>. This comes after significant pressure from European automakers and several member states, including Germany, Italy, and the Czech Republic, who have voiced concerns about the readiness of electric vehicle (EV) charging infrastructure, sluggish EV sales, and increasing competition from cheaper Chinese imports.<\/p>\n<p>While the original ban aimed for a 100% reduction in CO2 emissions from new light vehicles by 2035, the discussions now lean towards a more flexible framework. This could potentially allow for the continued sale of vehicles powered by alternative fuels, such as carbon-neutral e-fuels, or highly efficient plug-in hybrids beyond the initial deadline. The potential delay reflects a pragmatic shift to balance environmental goals with economic realities and the need to protect manufacturing jobs within the bloc.<\/p>\n<h2>Japan&#39;s Lower House Approves FY 2025 Extra Budget<\/h2>\n<p>In Tokyo, <strong>Japan&#39;s House of Representatives<\/strong> has officially passed the government&#39;s supplementary budget bill for <strong>fiscal year 2025<\/strong>. This extra budget allocates <strong>18.3 trillion yen<\/strong> in general-account spending to finance the first comprehensive economic policy package introduced under Prime Minister Sanae Takaichi&#39;s administration.<\/p>\n<p>The fiscal measure is designed to address ongoing inflation concerns and stimulate the Japanese economy. Finance Minister Satsuki Katayama had previously emphasized the urgency of enacting the supplementary budget to ensure swift implementation of measures aimed at protecting citizens&#39; livelihoods and fostering economic recovery.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Japan&#39;s three megabanks have expressed their intent to provide up to 2 trillion yen (approximately $13.7 billion USD) 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