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  • Japan’s geographical location as the most prominent financial market in the northwestern part of Asia has resulted in it becoming the first landing point for a sizable number of submarine cables connecting Asia to the western United States
  • Tokyo is the primary hub for international internet bandwidth/connectivity and serves as a termination point for over 26 international submarine cable systems


  • Continues to be the primary driver of data centre colocation leasing in both Tokyo and Osaka as public cloud adoption continues to accelerate and hyperscale providers finding it necessary to deploy data centre infrastructure in-country to serve local end users effectively
  • While AWS, Google and Microsoft has shown it has the ability and appetite to develop its own self-built data centres, other hyperscale cloud providers like Alibaba, IBM Cloud and Tencent have opted to lease their data centre infrastructure exclusively from colocation providers

Infrastructure Overview

  • Robust network and reliable power infrastructure
  • Grid is stable and power outages are rare making it an ideal location for setting up data centres

Geographical Stability

  • Relatively high risk of earthquakes and tsunamis
  • Strict regulations in place for data centre buildings to be developed with a unique seismic isolation layer design as well as long underground columns that help to secure data centre buildings in case of an earthquake

Political Climate

  • Stable and fair government that is centered around promoting economic development
  • Data centre segment could potentially benefit from Japan opening its doors for international investments
  • The Japanese is also looking to encourage domestic and foreign businesses to set up data centers in the country by offering tax breaks and other assistance in an effort to speed up its own digital transformation and to prevent sensitive information from being hosted overseas

Business Climate

  • Skilled labor force, relatively friendly environment for international business
  • Language and cultural barriers present that require local Japanese presence to effectively do business in-country
  • Strong culture of IT outsourcing with the presence of sizable local systems integrators driving data centre and cloud services adoption
  • Recent labor shortages led to increased construction costs and delayed speed to market