US and Japan open Keen Sword drills near Taiwan as China's cutoff of heavy rare earths to Japan continues

The United States and Japan began their biennial Keen Sword exercise on Monday, one of the largest joint drills between the two countries. This year it focuses on islands near Taiwan, Antiwar.com reported, as republished by ZeroHedge.

Beijing has already shown what it can withhold. After Japan indicated it would not stay neutral in a conflict over Taiwan, China sharply restricted exports of several heavy rare earths, including dysprosium and terbium, OilPrice reported. The outlet called Taiwan the next point where China will test the use of rare earths as leverage. Since December, Chinese exports of dysprosium, terbium and yttrium oxide to Japan have stopped apart from a few small shipments of yttrium, StratNews Global reported. Japanese magnet maker Shin-Etsu has stopped accepting new orders for dysprosium magnets, a customer said. In 2024 China exported about 14 tons a month of dysprosium and terbium to Japan. Lynas Rare Earths, the Australian producer Japan helped finance, made 8 tons of the two metals in the first quarter of 2026.

Washington is also pressing on chips. Trump said the United States will take nearly half of the world semiconductor market, Russian business outlet BFM reported. BFM noted that Washington had earlier proposed moving half of Taiwan's chip production to the United States. Japan meanwhile continues to profit from the AI build-out: shipments of semiconductors and chipmaking equipment rose sharply and supported solid export growth in September, The Japan Times reported.