Jurisdiction Index / Japan
Japan
JCI composite · as of · methodology v0
Japan scores 58.6/100 on the Compute Institute Jurisdiction Competitiveness Index (Tier 3, Contested), ranking #19 of 30 rated jurisdictions with a stable outlook, as of June 15, 2026 under methodology v0. Its strongest dimension is Regulatory & AI Policy Environment at 8/10; its weakest is Power Cost at 1.6/10. 19 of 22 sub-factors are scored on E1–E2 evidence (data confidence A). The stable outlook is driven by 3 forward-looking signals (-0.11 net points, E3–E4 evidence): cost certainty / contractability (E3), observed construction velocity (E3) and labor & supply capacity (E3).
Dimension breakdown
Seven dimensions, each 0–10, weighted per methodology v0. JCI = Σ(dimension × weight) × 10.
Power Availability & Deliverability
Power Cost
Speed to Build
Regulatory & AI Policy Environment
Fiscal & Incentives
Capital & Ecosystem Depth
Stability & Execution Risk
Outlook drivers — Stable (-0.11 net points)
Forward-looking E3–E4 signals. They move the outlook only — never the base score.
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Cost certainty / contractability -0.28 pts as of
“Japan's corporate PPA market remains nascent versus mature US/EU markets; OCCTO operates a capacity market to secure supply but long-term fixed-price contractability for hyperscale loads is limited and capacity-securing costs face continued upward pressure.”
Source: Chambers Power Generation Transmission & Distribution Guide 2025 - Japan (practiceguides.chambers.com)
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Observed construction velocity +0.61 pts as of
“THIN/INTERNAL: 2025 saw seven new DCs add >200 MW with a further ~1.2 GW announced/under construction; Japanese EPC build quality is world-class but throughput data is sparse and graded conservatively pending internal-DB project velocity.”
Source: Shulman Advisory summary of OCCTO 10-Year Demand Forecast (Jan 2026) (shulman-advisory.com)
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Labor & supply capacity -0.44 pts as of
“Severe structural construction-labor tightness: ~900,000 skilled-worker shortfall projected for 2025, 36% of the workforce aged 55+, headcount down ~20% over a decade (6.03M in 2013 to 4.83M), and a 45hr/month overtime cap further constrains capacity; EPC quality is high but labor is a real drag.”
Source: Construction Briefing: Japan construction skills shortage (2025) (www.constructionbriefing.com)
Sub-factor scores and sources
Every base-scored input below carries E1–E2 evidence: a justification, an evidence-level grade, and a link to the underlying source document.
Power Availability & Deliverability — 4.7/10 (weight 20%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| Grid headroom 40% of dimension | 4.5 /10 | OCCTO's FY2026-2035 10-year outlook (published 21 Jan 2026) projects combined incremental data-center + semiconductor-fab peak demand of ~7.6 GW by FY2035 against a fragmented grid split into 50/60Hz zones; renewable-rich Hokkaido and Kyushu are far from Tokyo/Osaka demand and in... as of | Shulman Advisory summary of OCCTO 10-Year Demand Forecast (Jan 2026) shulman-advisory.com | |
| Time-to-power 35% of dimension | 4 /10 | OCCTO grid-connection process plus regional TSO interconnection constraints push large-load energization into the multi-year (~3-5yr) range; project delays have already shifted much of the projected 7.6 GW demand into the back half of the FY2026-2035 window, placing JP between th... as of | IEEFA: Japan's renewable integration constrained by grid connection framework (2024) ieefa.org | |
| Energy mix & expandability 15% of dimension | 5 /10 | Post-Fukushima nuclear restarts are ongoing but partial, leaving Japan heavily LNG-import-dependent; FY2025 estimated wholesale price ~12.2 yen/kWh with a 3.98 yen/kWh FIT/FIP renewable surcharge, and behind-the-meter/clean-power capex subsidies cover up to 50% but expansion is c... as of | JEPX monthly average wholesale prices + METI FY2025 FIT/FIP surcharge (Mar 2025) www.meti.go.jp | |
| Water availability 10% of dimension | 7.5 /10 | Japan is generally low baseline water stress in the WRI Aqueduct 4.0 country rankings (abundant precipitation, temperate humid climate), so cooling-water supply is not a material constraint for most DC siting outside dense urban cores. as of | WRI Aqueduct 4.0 Country Rankings www.wri.org |
Power Cost — 1.6/10 (weight 12.5%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| Industrial electricity price 60% of dimension | 1 /10 | Japanese business/industrial electricity is ~JPY 28.93/kWh (~USD 0.180/kWh = ~$180/MWh) as of Sep 2025, far above the >$140/MWh=0 anchor; even the lower industrial input series sits ~17.5 JPY/kWh (~$115/MWh), so power cost is a structural weakness. as of | GlobalPetrolPrices.com Japan electricity prices (Sep 2025) www.globalpetrolprices.com | |
| Price trajectory & exposure 25% of dimension | 3 /10 | Prices are tightly coupled to LNG import costs and a structurally weak yen, passing FX and fuel volatility straight through to power bills; the FY2025 renewable surcharge rose to 3.98 yen/kWh (FY2025 total ~3.1 trillion yen), adding upward pressure. as of | Japan Energy Hub: METI FY2025 renewable surcharge 3.98 yen/kWh japanenergyhub.com | |
| Cost certainty / contractability 15% of dimension | — | Excluded — no E1–E2 evidence available; weaker evidence cannot enter a base score. | — | — |
Speed to Build — 6/10 (weight 17.5%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| Permitting regime 40% of dimension | 6 /10 | Japan has a relatively relaxed development regime with no foreign-investment barriers; pre-zoned DC sites move fast, but environmental-consideration rules (greening, noise, vibration) and the April 2025 Building Standards Act energy-efficiency revision plus local-resident explana... as of | Nagashima Ohno & Tsunematsu: Tokyo Metropolitan Government DC Guidelines (Apr 2026) www.nagashima.com | |
| Observed construction velocity 35% of dimension | — | Excluded — no E1–E2 evidence available; weaker evidence cannot enter a base score. | — | — |
| Labor & supply capacity 25% of dimension | — | Excluded — no E1–E2 evidence available; weaker evidence cannot enter a base score. | — | — |
Regulatory & AI Policy Environment — 8/10 (weight 12.5%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| AI-specific law in force 35% of dimension | 8.5 /10 | Japan's AI Promotion Act (Act on Promotion of R&D and Utilization of AI-Related Technologies) was approved 28 May 2025 with most provisions effective 4 June 2025 - an enacted, underwriteable, innovation-first regime with NO monetary penalties, functioning as a national-strategy f... as of | Government of Japan: AI Promotion Act Now in Full Effect (Nov 2025) www.gov-online.go.jp | |
| DC-specific regulation 35% of dimension | 7 /10 | METI runs an active DC-decentralization policy steering builds toward Hokkaido/Kyushu via GX industrial-hub designations (initial selections announced Apr 2026) and a ~1.34 billion USD clean-power subsidy covering up to 50% of capex with data centers explicitly included. as of | Reccessary: Japan clean-power subsidy up to 50% capex, data centers included reccessary.com | |
| Regulatory predictability 30% of dimension | 8.5 /10 | World Bank WGI 2024 places Japan at Regulatory Quality 1.33 and Rule of Law 1.51 (scale -2.5 to +2.5; world average -0.02), both well into the top global tier and indicating a highly predictable, transparent regulatory environment. as of | World Bank WGI 2024 (Japan, via TheGlobalEconomy.com) www.theglobaleconomy.com |
Fiscal & Incentives — 5.7/10 (weight 10%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| Enacted incentives 40% of dimension | 7 /10 | Enacted/funded support is substantial: a ~1.34 billion USD clean-power subsidy covering up to 50% capex (DCs included), ~920 billion yen already disbursed to Rapidus (Hokkaido fab), and 72.5 billion yen awarded to five AI-supercomputer firms (Sakura Internet 50.1B, KDDI 10.2B) -... as of | Introl: Japan AI Infrastructure / METI AI-supercomputer awards (2025) introl.com | |
| Headline tax burden 40% of dimension | 3.5 /10 | Japan's effective corporate tax rate is ~30.62%, rising to ~31.52% with the new 4% special defense surtax (FYs beginning on/after 1 Apr 2026), and Pillar Two QDMTT/UTPR (15% global minimum) enter force by end-2026 - a relatively high burden, so low score (higher score = lower bur... as of | EY: Japan 2025 Tax Reform for corporate and international taxation www.ey.com | |
| Incentive durability 20% of dimension | 7.5 /10 | Incentives sit within a multi-year, legislatively-anchored ~10 trillion yen government AI/semiconductor commitment through 2030 (with the AI Promotion Act enabling public-private equity partnerships), giving high durability backed by a stable A1/A+ sovereign. as of | ainvest: Japan AI & Semiconductor Investment Surge / 10 trillion yen to 2030 www.ainvest.com |
Capital & Ecosystem Depth — 7.8/10 (weight 12.5%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| Committed capital 40% of dimension | 7.5 /10 | Large signed hyperscaler commitments: AWS 2.26 trillion yen (~$15.2B) Japan cloud infra by 2027 (announced 2024) and Microsoft $2.9B over two years; aggregate hyperscaler capital flowing into Japanese AI infra exceeds ~$26B, though some figures blend filings with multi-year plans... as of | AWS Press: 2.26 trillion yen Japan cloud investment by 2027 (Jan 2024) press.aboutamazon.com | |
| Ecosystem 30% of dimension | 8 /10 | Mature ecosystem: ~121 existing DCs and 50 upcoming across 46+ operators, AWS (Tokyo 4 AZ / Osaka 3 AZ) and Microsoft Azure presence, dense subsea-fiber landings, and full GPU access with no US export-control barrier as a treaty ally. as of | Researchandmarkets: Japan Colocation DC Portfolio 2025-2028 (121 DCs) markets.financialcontent.com | |
| Sovereign/anchor capital availability 30% of dimension | 8 /10 | Deep sovereign anchoring: a ~10 trillion yen (~$65B) government AI commitment through 2030 with ~2 trillion yen for 2024-2025, ~920 billion yen to Rapidus, state-backed JIC as a strategic investor, plus SoftBank as a domestic anchor capital partner in the Stargate initiative. as of | Introl: Japan AI Infrastructure / METI AI-supercomputer awards (2025) introl.com |
Stability & Execution Risk — 7.6/10 (weight 15%)
|
Sub-factor
|
Score
|
Justification
|
Evidence
|
Source
|
|---|---|---|---|---|
| Political/policy continuity 40% of dimension | 8.5 /10 | World Bank WGI 2024: Japan Government Effectiveness 2.09 (near top globally) and Political Stability 1.13 (world average -0.07), indicating exceptionally strong institutional execution and policy continuity. as of | World Bank WGI 2024 (Japan, via TheGlobalEconomy.com) www.theglobaleconomy.com | |
| Currency, transfer & convertibility 35% of dimension | 9 /10 | The yen is a fully convertible major reserve currency with no capital controls or transfer restrictions, backed by an investment-grade sovereign (S&P A+ stable affirmed Mar 2025; Moody's A1), so capital repatriation risk is minimal. as of | S&P Global Ratings: Japan A+/A-1 Ratings Affirmed, Outlook Stable (2025) www.spglobal.com | |
| Physical & geopolitical risk 25% of dimension | 4 /10 | Seismic risk is the dominant real factor: the government's Earthquake Research Committee (Sep 2025) put the 30-year probability of a major Nankai Trough quake at 60-94.5%+; world-class seismic codes (JMA intensity 6-7 no-collapse standard) mitigate but cannot eliminate physical r... as of | Housing Japan / JMA: Nankai Trough 30-yr probability 60-94.5% (Sep 2025) housingjapan.com |
Signals
Recent ingested source documents linked to this jurisdiction via extracted claims or triage mentions, newest first.
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· Data Center Dynamics · relevance 0.70
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· Interesting Engineering · relevance 0.10
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· Google News Business · relevance 0.20
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· Google News Business · relevance 0.20
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· Reuters · relevance 0.40
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· thenextweb.com · relevance 0.20
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· Tom’s Hardware · relevance 0.70
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· TechSpot · relevance 0.70
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· Bloomberg Technology · relevance 0.50
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· Google News Technology · relevance 0.10
Scores are reproducible from the frozen inputs snapshot recorded at computation time (2026-06-15T23:52:39+00:00). See the full methodology for rubrics, weights, and the evidence ladder.