On August 10, Taiwan’s representative to Japan, Lee Yi-yang, declined to attend the atomic bombing memorial ceremony in Nagasaki after Taiwan’s delegation was seated outside the area reserved for diplomatic representatives. Lee denounced the arrangement as a symbolic slight to Taiwan’s status and a concession to Beijing’s efforts to restrict Taiwan’s international space. Nagasaki officials, however, maintained that the seating arrangement reflected Japan’s longstanding “One China” policy rather than an effort to single out Taiwan. Yet while Taipei protested the decision, it was equally careful to ensure that the controversy did not overshadow the broader trajectory of Japan-Taiwan relations.

The episode exposed a central paradox in contemporary Japan-Taiwan relations. Economic, technological, and societal ties between the two sides have never been stronger, yet political sensitivities surrounding Taiwan’s international status continue to constrain how far the relationship can advance. The Nagasaki dispute was therefore more than a disagreement over diplomatic protocol. It illustrated how a relationship characterized by growing interdependence remains embedded within a diplomatic framework shaped by Japan’s “One China” policy and the broader dynamics of Sino-Japanese relations. As Taiwan and Japan become increasingly interconnected, both their expanding cooperation and the political constraints surrounding it have become more visible.

Taiwan and Japan have entered what many Taiwanese policymakers describe as the “deep waters” of bilateral relations. Economic integration, technological collaboration, and societal exchange have reached unprecedented levels, even as enduring political and security constraints continue to limit closer cooperation. The challenge ahead is not merely to expand areas of engagement, but to translate growing convergence of interests into sustainable forms of cooperation. Doing so will require both stronger institutional frameworks and the political will to advance the relationship despite persistent geopolitical constraints.

From Economic Partnership to Strategic Convergence

The most visible driver of Japan-Taiwan cooperation has been Taiwan Semiconductor Manufacturing Company’s investment in Kumamoto. What began as a commercial decision has evolved into one of the most important strategic projects in East Asia. For Japan, TSMC’s presence supports the revitalization of a domestic semiconductor industry that had steadily declined over the past three decades. For Taiwan, the project deepens integration with one of its most important political and economic partners. 

The Kumamoto project links Taiwan’s manufacturing leadership with Japan’s strengths in semiconductor equipment, specialty chemicals, advanced materials, and precision machinery. The result is a more resilient and geographically diversified supply chain.

But cooperation linked to the project extends beyond the economic realm. In Kyushu, local governments, universities, research institutes, and businesses have forged new partnerships with Taiwanese counterparts. Educational exchanges, workforce training programs, and joint research initiatives have expanded rapidly, creating new channels of cooperation. TSMC’s single investment has therefore become a platform for broader regional integration.

Beyond semiconductors, both sides are increasingly collaborating in sectors such as artificial intelligence, cybersecurity, drone technology, digital governance, and economic security. The signing of a Japan-Taiwan Digital Trade Agreement in 2025 reflected the growing importance of these emerging domains. Clearly, Japan-Taiwan cooperation is entering a new phase.

In the past, economic cooperation with Taiwan was relatively uncontroversial. But today, the distinction between economics and security is blurring. Semiconductors, artificial intelligence, and supply chains are no longer merely commercial issues. They have become central components of national competitiveness and strategic resilience. As a result, Japan-Taiwan relations have evolved beyond a traditional economic partnership, with growing convergence in economic security, advanced technology, and regional strategic interests. Yet important political constraints remain.

The Institutional Constraints

The institutional foundations of the relationship have not kept pace with its strategic transformation. Although Taiwan and Japan have signed numerous practical agreements over the past decade, most of the recent arrangements have been narrowly focused and technical in nature. Major agreements in the areas of fisheries, taxation, customs cooperation, investment, and aviation were largely concluded during the 2010s. More recent agreements have concentrated on specialized areas such as railway cooperation, customs information sharing, plant variety certification, and digital trade.

That’s because Japan’s approach to Taiwan cannot be separated from its management of relations with China. Since the normalization of diplomatic relations between Japan and the People’s Republic of China (PRC) in 1972, Beijing has consistently sought to limit Japan’s engagement with Taiwan whenever Tokyo has appeared to move beyond the bounds of an unofficial relationship. Beijing cites the 1972 Japan-China Joint Communiqué, in which the Japanese government stated that it “fully understands and respects” the PRC’s position that Taiwan is an inalienable part of Chinese territory. 

Although Japan did not formally recognize Chinese sovereignty over Taiwan, the communiqué became the foundation of Japan’s One China policy and remains the principal reference point for Beijing’s criticism of expanded Japan-Taiwan ties. Whenever Japan has sought to expand exchanges, support Taiwan’s international participation, or deepen political engagement, Beijing has invoked the 1972 communiqué to argue that such actions violate the spirit of bilateral understandings. 

Consequently, while Tokyo has supported practical cooperation with Taiwan in many areas, it has been reluctant to pursue measures that could be interpreted as a significant upgrade in official relations. The result is a relationship that continues to deepen in practice while advancing more cautiously at the institutional level. 

To see this in practice, look at the debate over a bilateral Economic Partnership Agreement (EPA). As economic ties have deepened, Taipei has repeatedly called for an EPA to provide a more comprehensive framework for trade and investment. Tokyo, however, remains reluctant, and prefers to discuss smaller, sector-specific agreements like the 2025 digital trade agreement.

Taiwan’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) faces the same reluctance. Japan has consistently expressed support for Taiwan’s participation, and Taiwan has undertaken significant domestic reforms to align itself with CPTPP standards. Yet progress toward accession has remained slow, reflecting the reality that economic considerations alone do not determine the pace of institutional integration. The challenge is not a lack of cooperation or goodwill, but the broader political environment for Taiwan’s international participation. Consequently, formal integration continues to lag behind the growing depth of Japan-Taiwan economic relations.

The Nagasaki controversy was yet another illustration of this enduring tension. Political constraints rooted in the “One China” policy continue to influence Japan-Taiwan relations despite their growing economic and strategic significance.

The growing complexity of Japan-Taiwan relations has exposed a mismatch between shared interests and the frameworks available to advance them. Progress has been most visible in semiconductors, digital governance, supply chain resilience, and other emerging technologies – all of which require sustained coordination on regulations, talent, and investment. Yet the areas where strategic interests overlap most directly remain the most politically sensitive. Although concerns about economic security and cross-strait stability have drawn Taipei and Tokyo closer together, cooperation on defense and security issues remains limited. Consequently, the challenge facing both sides is how to build institutions capable of supporting deeper collaboration despite the substantial political constraints.

Taiwan’s Coordination Problem

The institutional challenge isn’t only on Japan’s side; it also exists within Taiwan itself. As bilateral cooperation expands into increasingly interconnected areas such as semiconductors and economic security, responsibility for Japan policy is spread across multiple agencies, including the Ministry of Foreign Affairs, the National Security Council, the Ministry of Economic Affairs, and Taiwan’s representative institutions in Japan. 

The coordination challenge is not unique to Japan policy, but the issue is particularly acute because Japan-Taiwan relations now span multiple policy domains that cut across traditional bureaucratic boundaries. In addition to trade and people-to-people exchanges, the bilateral agenda now encompasses economic security and supply chain resilience – issues that require coordination across Taiwan’s diplomatic, economic, scientific, educational, and security institutions. As the relationship becomes more multidimensional, the costs of fragmented policymaking become increasingly apparent.

Compounding this challenge is a shortage of Japan specialists within Taiwan’s policy community. Compared with the resources devoted to China and U.S. affairs, Taiwan maintains a relatively small pool of experts on Japanese politics, foreign policy, economic security, business networks, and the Japan-U.S. alliance. As Japan-Taiwan cooperation expands into strategically important areas, this lack of expertise becomes increasingly consequential. Without a deeper bench of Japan specialists, Taiwan may struggle to develop the long-term policy coordination and strategic planning needed to sustain a more complex bilateral relationship.

Building a Sustainable Partnership

The future of Japan-Taiwan relations will depend not only on identifying new areas of cooperation, but also on developing the political will and institutional capacity needed to sustain an increasingly complex partnership. Three priorities stand out. 

First, Taipei and Tokyo should continue expanding practical cooperation through sector-specific agreements in areas such as economic security, talent mobility, digital governance, and emerging technologies. While broader initiatives such as a bilateral Economic Partnership Agreement may remain politically difficult, targeted arrangements can help advance cooperation in areas of shared interest.

Second, Taiwan should strengthen the coordination of its Japan policy. As the bilateral agenda increasingly spans diplomacy, technology, economic security, supply chains, and regional affairs, more effective coordination among the Ministry of Foreign Affairs, the National Security Council, economic ministries, and Taiwan’s representative institutions in Japan will be essential. Whether through an existing mechanism or a strengthened interagency framework, Taiwan needs a more integrated approach to one of its most consequential external relationships.

Third, both sides should invest in cultivating a new generation of specialists with expertise in Japanese politics, foreign and security policy, economic governance, business networks, and the Japan-U.S. alliance. Universities, think tanks, and government agencies should expand language training, research collaboration, policy exchanges, and professional development programs. As Japan-Taiwan relations become more technologically sophisticated and strategically significant, human capital will be as important as semiconductors in shaping the future of the partnership.

The Nagasaki controversy demonstrated that the political constraints surrounding Taiwan have not disappeared. Yet a comparison with Hiroshima shows the other side of the coin. Despite operating within the same national framework, Hiroshima has generally taken a more accommodating approach toward Taiwan’s participation at its atomic bombing commemorations, underscoring the importance of political will and leadership. 

Whether the Japan-Taiwan relationship continues to deepen will thus depend not only on stronger institutions, but also on the willingness of leaders in Taipei and Tokyo to translate shared interests into sustained cooperation despite geopolitical pressures. If they can do so, the “deep waters” of Japan-Taiwan relations may become the foundation of a more resilient and sustainable partnership in the Asia-Pacific.