Times of crisis are a chance to discover who your true friends are. Ukraine learned this lesson two years ago. While it was largely Euro–Atlantic nations that spoke out against Russia’s actions in Crimea, Ukraine also found a supporter in Japan.


Officials have announced that Japan and Ukraine are arranging for Ukrainian President Petro Poroshenko to visit Tokyo ahead of the G7 summit in May. Japanese Prime Minister Shinzo Abe has continued to voice support for Ukraine in light of the ongoing conflict in the country’s eastern regions.


Economic and trade ties between the two nations have grown stronger, despite a temporary setback regarding Ukrainian import restrictions on Japanese cars. Ukraine has not hesitated to seek Japan’s economic expertise in the wake of the crisis. A former Bank of Japan official, Masaru Tanaka will soon be arriving in Kiev to provide financial advice to the Ukrainian government.


Japan has also announced an investment package of US$300 million, bringing total Japanese investment in Ukraine to US$1.8 billion. Ukrainian finance minister Natalia Jaresko praised the government’s efforts in securing this investment, stating that they were able to do in 15 months what had not been done in the preceding 23 years. She asserted that Japanese investment is crucial in assisting Ukraine’s embattled economy.


Despite being geographically removed from Japan, there is definitely rhyme and reason to Japan’s vast financial interest in Ukraine. Given longstanding, though recently amended, legal constraints on its Self-Defense Forces, postwar Japan has relied on financial prowess as a way to project its power and influence.


Ukraine makes for a promising target. Its economy recently returned to growth following the decline of 2014 and early 2015. According to figures from the US-based Heritage Foundation, Ukraine’s economic policies are generally conducive to trade and investment freedom.


Japan’s support also has some geopolitical precedent — it has long disagreed with Russia about the status of the Kuril Islands (known as the Northern Territories in Japan), an archipelago between the coast of Hokkaido and Russia’s Kamchatka Peninsula.


However, how long is Tokyo’s support for Ukraine likely to last?


In recent months, Japan has sought to increase its cooperation with Russia, particularly in trade and security. Japan and Russia have resumed negotiations over their ongoing territorial dispute over the Kuril Islands/Northern Territories —, which were halted following the Crimea crisis — and are working to establish a post-World War II peace treaty.


Despite closer cooperation with Russia, Tokyo has not yet indicated a shift in policy towards Ukraine. Presently, collaboration between Japan and Russia seems more symbolic than substantive. However, in the long run, the recent rapprochement may not bode well for Ukraine.


One of the biggest diplomatic challenges the Japanese government has faced in recent years has been assuming a balanced position towards Russia and Ukraine, while contending with pressure from the United States, Japan’s most important ally, to take a firm position on Russia.


Prime Minister Abe refused to heed calls from Washington not to meet with his Russian counterpart Vladimir Putin. Abe has also called upon the international community to allow Russia greater opportunities for collaboration on global issues after Russia’s expulsion from the G8 due to its actions in Ukraine.


How will Japan’s improved relations with Russia affect its relationship with Ukraine? The question is whether economics or geopolitics will dominate. Even if Japan continues to support sanctions against Russia, if Tokyo decides that continued support for Ukraine is inhibiting ties with Russia, Japan may limit its cooperation with Ukraine to the economic sphere.


Continued pressure from the United States is one factor preventing a drawing-down of the Japan–Ukraine relationship. As an industrialised democracy, Japan enjoys close cooperation with the United States and the European Union. Yet its current foreign policy, while not necessarily distancing itself from the West, reflects what has been described as Japan’s desire to be a ‘normal’ nation. This entails a more assertive foreign policy based on Japan’s national interests. The general sentiment among policymakers is that while Japan–Russia relations are not necessarily hostile, they are not at their fullest potential.


Japan and Russia have shown a willingness to cooperate, despite bilateral disagreements, on areas of mutual interest, such as the recent security crisis in North Korea. As such, Japan may find that it is still able to support Ukraine without hindering its ties to Russia.


In economic terms, Ukraine has not lost a friend in Japan. Japanese investment in Ukraine will likely continue as long as Ukraine remains a sufficiently healthy and low-risk environment. However, politically, the future of Japan–Ukraine relations remains uncertain. As each tries to navigate the diplomatic fallout from the Crimea crisis, moves on both sides have become tentative. If Tokyo decides its interests are better served by repairing relations with Russia, support for Ukraine from one of its closest friends in Asia may prove fleeting.


Economy Watch