These figures, reported by Kyodo News citing Chinese customs data, reflect the impact of export controls that China imposed on dual-use items to Japan starting in January 2026. The controls came amid rising bilateral tensions following Japan's new leadership and its renewed security posture, including remarks on Taiwan and increased military activity.
According to the data, China's monthly rare earth magnet exports to Japan had consistently exceeded 200 tons before February. They fell to just over 180 tons in March and April, then plunged to the 120-ton range from May onward. Meanwhile, global exports from China actually rose about 19% month-on-month in June, indicating that the restrictions are specifically targeted rather than a general supply cut.
The impact on Japanese industry is substantial. A June survey by Tokyo-based supply chain risk management firm Resilire found that over 400 manufacturers report that rare earth procurement costs have risen more than one-fifth since last year. More than 40% of surveyed companies have been able to pass on less than half of the cost increase. Japan sources 61% of its rare earths from China on average.
Analysts warn that if heavy rare earth reserves — which are projected to be largely depleted by the end of 2026 — are not replenished, Japanese factories may be forced to halt production. Nomura Research Institute estimates that a three-month supply disruption would cost Japan's economy approximately 660 billion yen (about 27.5 billion yuan), and a one-year disruption would balloon to 2.6 trillion yen.
In response, Japan is exploring alternatives. Mitsubishi Electric has launched a project to extract rare earths from recycled home air conditioner compressors — a first for the country. However, the scale remains small compared to the volumes previously supplied by China.
Knowledge takeaway: China's targeted export controls on rare earths to Japan, intensified since January 2026, have cut magnet shipments by over 40% and stopped tungsten exports entirely. Japanese manufacturers face cost increases of over 20% and risk factory shutdowns as reserves deplete. Japan is turning to urban mining — extracting rare earths from discarded appliances — but the volumes are still far from meeting demand.