Rare earth elements, which are essential in manufacturing electric vehicle (EV) motors, defense equipment, and high-tech products'Rare earth' related stocks have surgedAccounting for 70% of global production, China is implementingStrengthened export controls against Japan and Initiation of resource development within JapanThese significant developments on both the offensive and defensive fronts are creating favorable tailwinds. The main factors behind the rise can be summarized in the following three points.
1. China’s export restrictions targeting Japan and its national policy initiatives
On January 6, 2026, the Chinese government announceda complete ban on exports to Japan of 'dual-use' items that could potentially be diverted for military purposesIt was announced that initially there was no mention of rare earth elements. However, reports suggest that the Chinese government has halted export license approvals for civilian-use rare earths to Japan, effectively imposing restrictions, causing related stocks to soar. There is growing interest in moves towards 'reducing dependence on China.' The Group of Seven (G7) and others held a ministerial-level meeting on critical minerals, including rare earths, in Washington on the 12th to enhance cooperation."Reduce dependency on China with a sense of urgency."They have reached an agreement and are beginning to align globally.
2. The trial excavation of rare earth mud off the coast of Minami-Torishima has...