According to a study by blockchain analyst Elliptic, Japan has suffered the most losses of cryptocurrency due to cyberattacks originating from North Korea. The study found that three out of the four top targets for North Korean hackers were Asian countries. The attacks were described as a "national strategy" and included both hacking and ransomware attacks. Elliptic attributed the targeting of Japanese and Vietnamese cryptocurrency markets to lax security measures. North Korea's Lazarus Group has been responsible for some of the largest crypto heists, including the Ronin Bridge exploit and the Harmony Bridge hack.

This week, major economic data from China and Japan, as well as a central bank rate decision from the Philippines, could be the main drivers for Asian markets. Investors are growing increasingly nervous about the U.S. and global macro outlook, with concerns about the U.S. debt ceiling, credit conditions, and the cumulative effect of Fed rate hikes overshadowing strong U.S. earnings. While world stocks ended last week on a shaky footing, Asian shares ex-Japan inched up for a second weekly rise in a row. However, the latest Chinese economic indicators have been shocking, with inflation and imports collapsing in April, casting severe doubt over the strength of the economy's post-lockdown recovery.

Japan has recently shown interest in Web3, which is built around decentralized blockchain technologies, the metaverse, and NFTs. However, regulatory changes and tax updates are necessary for this momentum to lead to genuine progress. The NexTech Week trade show in Tokyo highlighted the opportunities and challenges in Web3 game development, with advice offered to overseas companies looking to expand in Japan. Japan's blockchain and Web3 space is relatively small, but events like Next Tech Week provide a great opportunity to meet the community and explore business opportunities. The Japanese government is continuously releasing press releases and white papers about the evolving environment, providing potential business opportunities. With Japan's large market, high GDP per capita, and well-recognized brands, there is huge potential for Japan to become a leading country in the Web3 space if it can bring these brands into a global environment via blockchain.

The NexTech conference held at the Big Sight conference venue in Tokyo showcased Artificial Intelligence as the main attraction, occupying the entire ground floor while other technologies like blockchain and quantum computing were relegated to the second floor. This highlights the challenge facing advocates of blockchain adoption in Japan, as the general public remains unconvinced despite recent government support. Yuzo Kano, CEO of bitFlyer Inc., lamented Japan's loss of its first-mover advantage in the crypto space due to incidents like the Coincheck hack in 2018 and the Mt. Gox hack in 2014. However, Kano believes that Japan is now in a position to make a fresh start and Masaaki Taira, Kishida's head of Web 3 development, will outline the government's strategy for this at the NexTech conference.

(Reuters) -The International Monetary Fund on Thursday warned of "uncertainty" around the direction of Japan's monetary policy, saying a possible shift from ultra-low interest rates could have a significant impact on global financial markets.The director of the IMF's Asia and Pacific Department also highlighted risks surrounding Asia's economic outlook, including weakening exports, slowing productivity in China, and the fragmentation of global trade. There is a risk that the global economy fragments into trading blocs, which could deal a particularly heavy blow to export-reliant Asia.  

Kraken has joined Coinbase in an effort to push back against the growing regulatory scrutiny by United States regulators.

Japan's largest bank, MUFG, has concluded a cross-blockchain trial to settle digital securities using a stablecoin, with DataChain as the interoperability tech provider. This is part of MUFG's development of Progmat, a blockchain infrastructure for digital securities, which requires settlement through stablecoins. The bank developed Progmat Coin to support stablecoins from multiple regulated issuers. The trial used a stablecoin issued on the Progmat Coin infrastructure based on R3's Corda enterprise blockchain to pay for a security on a GoQuorum permissioned blockchain. The solution addressed three key requirements: avoiding the need for a trusted third party for interoperability, settling different types of transactions, and sidestepping the need for another network for interoperability.

Japan is embracing Web3 and DAO developments, as highlighted by a recent government-affiliated white paper calling for faster developments in the country. The paper argues that a greater understanding of blockchain technologies and smart contracts employed in DAOs is needed to "unlock their potential" as a tool for regional revitalization and social engagement. Fracton Ventures, a Tokyo-based Web 3 incubator focused on DAO infrastructure development in Asia, hosted the recent DAO Tokyo conference, which provided a rare opportunity to share ideas across what remains an East-West knowledge and capability divide. While Japan has some catching up to do to compete with its neighbours Hong Kong and Singapore, events such as DAO Tokyo represent nothing but an upside after the crypto market pummelling of 2022, say industry commentators. (forkast)

Crypto lender Amber Group is weighing options for its Japan unit, including a possible sale, and plans to apply for a Hong Kong license following the city’s pivot toward creating a digital-asset hub.

Japan is set to push for the regulation of central bank digital currencies (CBDCs) and cryptocurrency at the upcoming G7 summit. Japan is taking a proactive stance on digital currencies, and has been working to develop its own CBDC, known as the Digital Yen.