China's Rare Earth Export Ban Persists, Japanese Companies Warn of Supply Chain Strain
Claire Weston
China has shipped zero terbium and dysprosium oxide to Japan since last November, and yttrium flows have nearly stopped. Japanese corporate filings mentioning rare-earth risk have doubled since May, with the shock spreading from materials firms into consumer electronics and medical devices.
How complete is the cutoff?
Chinese customs data show zero terbium and dysprosium oxide exports to Japan from last November through this May. Yttrium oxide shipments have been minimal since last December.
All three elements are essential to high-performance permanent magnets — the core components that convert electricity into motion inside motors and sensors.
This means → it is not a reduction in supply but a de facto total shutoff. Downstream firms are running on inventory alone.
How sharply has the corporate response changed?
Over the past decade, Tokyo Stock Exchange filings mentioning rare earths typically numbered fewer than 40 per month, concentrated in materials and industrial sectors.
Since May, that figure has doubled. Consumer-goods and electronics companies have begun listing rare earths as a risk factor for the first time.
Of nearly 200 filings mentioning rare earths in May and June, more than two-thirds said export controls are hurting or could hurt their business.
In plain terms = rare earths used to be a concern only for materials makers. Now watchmakers and medical-device firms are sounding the alarm too.
Which companies have issued warnings?
Watchmaker Citizen Watch warned on June 23 that prolonged export restrictions could affect production and financial results. It added, however, that rare earths are used mainly in motors and have not yet hit output or earnings.
Medical-device maker Omron included China's rare-earth curbs in its geopolitical risk assessment on June 22 but said the impact remains insignificant — it does not purchase rare earths directly; only some procured components contain them.
This reflects a pattern: most firms are at the "alert but not yet damaged" stage. The real test is how long inventories last.
How large could the economic hit be?
Mizuho Research Institute chief economist Takeshi Higashifukasawa noted that during China's 2010 rare-earth restrictions, Japan's economic loss equaled roughly 0.9% of GDP.
He believes this time could be worse: AI has pushed rare earths into a far wider range of products and supply chains, and EVs have added a new demand layer.
Rakuten Securities analyst Satoru Yoshida pointed out that as of 2025, China controls about 70% of global rare-earth production and 60% of reserves. "Supply is constrained, but users keep growing — that only makes rare earths scarcer."
What alternatives is Japan pursuing?
Japan's Ministry of Economy, Trade and Industry says it is partnering with allies and companies through investment and subsidies to secure stable supplies of critical minerals.
Prime Minister Sanae Takaichi has signed a critical-minerals cooperation framework with U.S. President Trump covering joint stockpiles and rapid-response supply arrangements. The two governments have also discussed joint deep-sea mining development.
Japan is additionally advancing rare-earth recycling programs.
This means → multiple alternative tracks are underway, but whether any can deliver real capacity in the short term is the central uncertainty — and that will determine how deeply this supply shock ultimately hits Japanese manufacturing.
What is the political backdrop to this cutoff?
Last November, Takaichi angered Beijing with remarks on Taiwan's defense. China tightened rare-earth shipments to Japan shortly after.
In plain terms = the cutoff is not a purely commercial act — it is a geopolitical pressure tool. When supply chains recover depends on when the political relationship thaws.
Content is for reference only, not financial advice.