Japan’s Top Risks:

“Cyber Attacks/Data Breach” remains the top risk for Japanese businesses, consistent with global trends. “Supply chain or distribution failure” ranks second, as extreme weather events and mounting geopolitical volatility including shifting trade policies force companies to reassess their supply chains. In addition, “Product Liability/Recall” and “Exchange Rate Fluctuation” pose significant risks, reflecting the country’s manufacturing strength and exposure to global market volatility. Notably, 63.6% of Japanese respondents reported losses due to product liability or recall issues and 47.6% cited losses from exchange rate fluctuations.

Tatsuya Yamamoto, CEO of Japan at Aon, said, “Japanese organisations are operating in an environment of unprecedented complexity. Cyber, weather and geopolitical risks continue to be acute challenges for Japan businesses, underscoring the need for robust risk management frameworks and agile strategies. As market trends shift and competition intensifies, vigilance and adaptability will be key. The interconnectedness of risks – where a cyber attack can disrupt supply chains or geopolitical volatility can trigger regulatory changes – demands a holistic, proactive approach to resilience.”

2025 Top 10 Business Risks in Japan

1. Cyber Attacks/Data Breach

2. Supply Chain or Distribution Failure

3. Weather/Natural Disasters

4. Geopolitical Volatility

5. Business Interruption

6. Economic Slowdown/Slow Recovery

7. Exchange Rate Fluctuation

8. Commodity Price Risk/Scarcity of Materials

9. Product Liability/Recall

10. Failure to Attract or Retain Top Talent

Risk Management: Formalisation and Focus on Insurable Risks

Japanese organisations demonstrate a strong commitment to risk management, with 74.7% having a formal risk management and insurance department, compared to 68.4% globally. Additionally, 75.3% measure the total cost of insurable risk and 83.3% report that these costs are increasing. While risk awareness is rising, most organisations have yet to quantify their exposures or leverage advanced analytics.

Japanese Businesses Risk Management Assessments for Top Three Risks

For “Cyber Attacks/Data Breaches”:

1. 27.2% have assessed the risk

2. 12.6% have developed continuity plans

3. 22.3% have risk management plans

For “Supply Chain or Distribution Failure”:

1. 25% have assessed the risk

2. 20% have developed continuity plans

3. 26.7% have risk management plans

For “Weather/Natural Disasters”:

1. 24.1% have assessed the risk

2. 22.4% have developed continuity plans

3. 13.8% have risk management plans

Future Risks: Rapidly Changing Market Trends and Geopolitical Volatility

Looking ahead, Japanese organisations expect “Weather/Natural Disasters” and “Geopolitical Volatility” to remain critical risks, alongside “Rapidly Changing Market Trends,” which is more prominent in Japan than globally. This highlights the country’s exposure to climate events and evolving consumer preferences.

Japan’s Top Five Future Business Risks by 2028:

1. Cyber Attacks/Data Breach

2. Weather/Natural Disasters

3. Geopolitical Volatility

4. Rapidly Changing Market Trends

5. Increasing Competition

Shinichi Kandatsu, head of Commercial Risk Solutions for Japan at Aon, said, “Cyber and weather-related risks continue to lead the rankings as top concerns for Japanese businesses today and in the future, with geopolitical volatility also ranking among the top five risks across both periods. This trend reflects the growing instability across the region, with implications for supply chains, regulatory environments and financial performance. In today’s fast-moving market, leveraging advanced data analytics is essential for businesses to anticipate emerging risks, optimise risk capital and build resilience. The findings from Aon’s Global Risk Management Survey provide Japanese businesses with actionable information to benchmark their risk strategies and identify areas for improvement.”

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