The Japanese government on Thursday froze assets of Russia's largest financial institution, Sberbank, and its largest private bank, Alfa Bank, as Japan ramps up pressure against Moscow's Ukraine invasion.
In line with the United States and European countries, the measure will force Japanese companies to seek alternative ways to settle payments to continue business in Russia.
Additionally, Tokyo will prohibit Japanese individuals and companies from making new investments in Russia that would give them a stake of 10 percent or more. Loans with a term to repayment exceeding one year are also subject to prohibition.
In 2021, Japan invested 61.2 billion yen ($470 million) in Russia, according to the Finance Ministry. While the investment ban is expected to have an effect on new businesses in Russia, its impact on Japanese companies is also unavoidable.
Currently, Japanese companies operating in Russia face a difficult business environment due to disruptions in logistics. They are expected to face an even more difficult situation if they are blocked from raising funds from Japan.
The Japanese government announced the sanction plan on April 12 as Russia continued its aggression against Ukraine after launching a full-scale attack in late February.
The alleged killings by Russia of innocent civilians in areas near the capital Kyiv have prompted Japan to go further in punishing Moscow and target the Russian energy sector, seen as a tough choice for a nation that relies heavily on imports to satisfy domestic energy needs.
Japan has already implemented a number of sanctions against Russia, including freezing the assets of President Vladimir Putin and other officials.