Japan Urges Russia to Return Control of Japan Tobacco Assets — Update

By Megumi Fujikawa and Kosaku Narioka

TOKYO--Japan has lodged a formal protest against Russia's seizure of Japan Tobacco assets, creating a new flashpoint in bilateral tensions.

Japanese Finance Minister Satsuki Katayama said Friday that Tokyo delivered the complaint through diplomatic channels, urgently demanding that Moscow reverse the move.

"The Japanese government has consistently called on Russia to ensure that the legitimate interests of Japanese citizens and companies are not undermined," she said. "We will continue to closely monitor the situation and respond appropriately in close coordination with relevant ministries and agencies, as well as JT."

Russian President Vladimir Putin signed a decree on Thursday placing all four of Japan Tobacco's Russian manufacturing operations under temporary state control.

The Japanese government holds more than a third of the tobacco company, which has operated in Russia since 1999 through its international division.

Housing a stable of brands including Winston and Camel, Japan Tobacco ranks among the largest tobacco firms in Russia, holding a market share of nearly 40%.

Russia is a crucial market for the Japanese company, generating roughly a quarter of the group's profit.

Shares of Japan Tobacco were indicated 19% lower Friday in Tokyo as sell orders overwhelmed buy orders.

Getting locked out of the Russian market would be tantamount to Japan Tobacco losing one of its biggest businesses, Jefferies analysts said in a note.

"While some Western companies have received compensation for seized assets in Russia, we believe this compensation significantly undervalued the businesses," the analysts said.

A Japan Tobacco spokeswoman said "temporary administration" does not constitute nationalization or requisition, but declined to comment further on what the measure entails.

The company said it is continuing to gather information on the matter, considering the options available to it and assessing the potential impact. Japan Tobacco has conducted business operations in Russia in compliance with regulations and sanctions, it said.

The move arrives amid strained relations between Moscow and Tokyo.

The Kremlin has denounced Japan over its support for Ukraine, as well as moves to increase military spending and deepen ties with the West in recent years. Last month, Russia charged a Japanese journalist with espionage.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com and Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

November 05, 2026 21:07 ET (02:07 GMT)