Japan’s dreams of better Russian ties have gone up in smoke

An employee selects a packet of cigarettes at a tobacco counter inside a hypermarket in Naberezhnye Chelny, Russia. The Russian government seized Japan Tobacco’s $9.5 billion in local assets last week, stripping the firm of one of its top markets. | Bloomberg

Nov 12, 2026

As one of Russia’s more provocative politicians, Dmitry Medvedev, wryly noted after his country seized Japan Tobacco’s assets, smoking kills. It has also likely extinguished Tokyo’s lingering hopes for better relations with Moscow.

The move was the latest in a series of provocations that increasingly read like a test of Prime Minister Sanae Takaichi. This summer, President Vladimir Putin for the first time visited one of the disputed islands occupied by the Soviet Union after Japan’s surrender at the end of World War II, an area around which Russia has since conducted live-fire missile exercises and announced bombing drills. A Japanese journalist working in Russia has been detained on espionage charges.

And last week, the Kremlin announced it had taken over factories belonging to Japan Tobacco, the dominant player in the domestic cigarette market. Its assets in Russia are worth some ¥1.5 trillion ($9.5 billion), the company said on Monday, with the market making up about a quarter of its adjusted operating profit. The stock lost a third of its value since the news broke. It’s likely no coincidence that the government in Tokyo is the largest shareholder — and thus one of the heaviest losers. Trade Minister Ryosei Akazawa filed a protest, demanding the decision be reversed.

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