Japan is out in force in Cannes this year across the Official Selection and parallel sections as well as the Marché du Film, where it is the country of honor, with its high-profile presence continuing a long and illustrious relationship with the festival.

Kōzaburō Yoshimura’s The Tale of Genji, Kiyoshi Saeki’s Man in the Storm and Noboru Nakamura’s Nami marked Japan’s entry into the main Competition in 1952. The country clinched its first Cannes top prize — the Grand Prix, which was replaced by the Palme d’Or in 1995 — in 1954 with Teinosuke Kinugasa’s Gate of Hell.

Close to 75 years after its Cannes debut, Japan is celebrating another Competition hat trick this year with Ryûsuke Hamaguchi’s Paris-set drama All of a Sudden; Hirokazu Kore-eda’s sci-fi Sheep in the Box and Fukada Koji’s intimate drama Nagi Notes in the running for the Palme d’Or.

Elsewhere in Official Selection, Yukiko Sode’s literary adaptation All the Lovers in the Night plays in Un Certain Regard and Kiyoshi Kurosawa’s historical drama The Samurai and the Prisoner will be unveiled in the Cannes Premiere section.

Over at Directors’ Fortnight, Japanese indie animation will be in the spotlight with Kohei Kadowaki’s feature We Are Aliens and Yano Honami’s medium-length work Eri.

The Country of Honor focus, which is decided at least two years in advance, falls at a buzzy time for the Japanese film business. The local box office hit a record high in 2025 of $1.8 billion, driven by the success of animated fantasy film Demon Slayer: Kimetsu no Yaiba Infinity Castle.

The $20 million budget animation, inspired by Koyoharu Gotouge’s bestselling manga, grossed more than $250 million at home to become Japan’s highest-grossing film ever. It delivered close to another $500 million in international ticket sales for a total gross to date of $741 million.

Aniplex, the subsidiary of Sony Music Entertainment Japan which oversees the Demon Slayer rights for Gotouge and publishing company Shueisha, will be in Cannes with a slate of upcoming animations including Witch on the Holy Night, the latest production from Demon Slayer production studio Ufotable. The market will also showcase a raft of manga works ripe for adaptation in a three-day event dedicated to Japanese IP.

In another record-breaking box office performance, Kabuki drama Kokuho — which debuted in Directors’ Fortnight last year and went on to represent Japan at the 98th Oscars after making the short list —delivered a $127 million gross, the best theatrical performance for a local live-action film ever.

In spite of the strength of the domestic box office, the Country of Honor focus, backed by Japan’s Ministry of Economy Trade and Industry and Japan External Trade Organization, chimes in with an increasingly international outlook across the Japanese film industry.

Veteran producer and Cannes regular Yumiko Takebe, president of Tokyo-based Kino Films, suggests this is a necessity due to the country’s demographics, which are characterized by falling birth rates and high life expectancy.

“Japan has no choice but to seek overseas markets in all fields, as we are in a super aged society,” says the producer, whose past credits include Naomi Kawase’s 2017 Palme d’Or contender Radiance and True Mothers.

Takebe points to the role of streaming in bringing about deep structural change to the local film and TV sectors as well as breaking down national barriers around content.

“Fifteen years ago, when Kino Films was established, there were 3,500 video rental stores. This has decreased by 60% and the sales of DVD/Blu-rays are less than 10% of their peak, with those sales shifting to video on demand,” she says.

Jason Gray, one half of Tokyo-based company Loaded Films with wife and co-founder Eiko Mizuno Gray, cautions that behind the 2025 bumper box office lies a harsher reality for most independently produced films.

“If you exclude those two titles from the annual box office it was a standard year in terms of admissions and split between local films and imports. 2024’s Last Mile and last year’s Exit 8, recently released in the U.S. by Neon, are increasingly rare cases of smaller titles backed by majors that became mega-hits,” he says.

“True independents share precious little of the box office pie, even those with notable festival premieres. The international festival circuit, Japan-focused events like Nippon Connection [in Germany], and streaming platforms such as Sakka might be the highest visibility option and warmest welcome for true Japanese indies.”

Loaded Films’ last production was the 2025 Palme d’Or contender Renoir, the second film of Chie Hayakawa after debut feature breakout Plan 75, which took inspiration from questions around Japan’s super-aging population. Renoir played across 180 screens in a mix of arthouse and multiplex venues. 

True independents share precious little of the box office pie, even those with notable festival premieres.

Jason Gray

“It performed quite well considering it didn’t have the conceptual hook of Plan 75 and garnered critical praise, including the coveted Oshima Prize, and international sales have been solid,” says Gray.

Against this backdrop, indie players are increasingly looking outside of Japan. Kino Films is currently finishing post-production on cult Japanese director Shin’ya Tsukamoto’s English-language debut Mr. Nelson, Did You Kill People? starring Rodney Hicks and Oscar-winning actor Geoffrey Rush.

Hicks stars as real-life, late African American Vietnam War veteran Allen Nelson, who wound up on the streets after returning from the conflict with severe PTSD but went on to become an anti-war campaigner of renown in Japan. The cross-border production was shot on location in the U.S., Thailand, Vietnam and Japan.

Takebe says the English-language and international shoot were tied to the real-life story, but acknowledges commercial considerations were also at play.

“Shin’ya Tsukamoto has enjoyed success at various international film festivals with his Japanese-language war dramas Fire on the Plain and Shadow of Fire,” she says. “We wanted to achieve a theatrical release in English-language territories including North America, which has been difficult until now, so we took up the challenge of making a wholly English-language film.”

Toronto native Gray, who arrived in Tokyo in 1998, says Loaded Films was one of the first Japanese companies to do co-productions but that other players are now embracing the model.

“When we started doing international co-productions a mere 10 years ago, they were not even a topic of discussion within the industry, but now even major studios are considering co-productions as an option,” Gray says.

His company was at the Hong Kong-Asia Film Financing Forum in March looking for partners for Life Is Yours by Emma Kawawada. Gray says the project, revolving around an elderly woman seeking revenge on a foreign company that expropriated her land to build a luxury ski resort, offers international casting and co-producer angles but that the configuration will depend on Kawawada’s artistic vision.

Running concurrent to the organic internationalization of local producers is the Japanese government’s drive to grow the country as an international shooting destination, which it kick-started with the introduction of incentives in 2023.

More than 20 productions have since tapped into the cash rebate offering up to 50% of costs incurred during production, led by Tokyo Vice and also including The Smashing Machine, Monarch, Rental Family and Marty Supreme.

A revamp of the scheme, offering more flexibility on the timeline for applying and reporting eligible expenses, has been welcomed since being announced in December. There are concerns around minimum thresholds for direct spend in Japan of either $3.2 million, or $1.1 million for projects with distribution in 10 or more territories.

“Revised rules around the subsidy have provided improvements, with it becoming a two-year program,” says Georgina Pope, head of production at Tokyo-based Toho Tombo Pictures, who worked on the shoots of The Smashing Machine and Marty Supreme.

She is still mulling the impact of the new thresholds, suggesting they may weigh on the diversity of projects touching down in the country.

“Even a few days of shooting in Japan gives immense value to the authenticity of a project but may not necessarily meet the new spend threshold,” she says. “A constant flow of diverse projects in size, scale and origin create a solid and growing workforce, giving crew a wide variety of experience and exposure to international filmmakers.”

But overall, Pope is upbeat: “Japan feels really exciting and vital at the moment. The domestic, animation and international sectors are all doing well. Studios are busy, cinemas are full… it really is an exciting time to be in Tokyo.”

At the same time as becoming more outward looking, Japan’s film business has also been looking inward and seeking to clean up its act in terms of working conditions.

“When I entered the film industry in the late 1980s, conditions on Japanese film sets were far from healthy,” says Shozo Ichiyama, programming director of the Tokyo International Film Festival and a producer whose credits include Takeshi Kitano’s Violent Cop and Eric Khoo’s Spirit World starring Catherine Deneuve opposite Masaaki Sakai.

“Studios and investors were trying to make movies on the lowest possible budgets, and the resulting strain was reflected in the grueling working conditions faced by crew members on set.”

He credits government-led efforts in neighboring South Korea and Taiwan for encouraging more sustainable approaches in the local industry, adding that local filmmakers have also played a role in improving standards.

“The fact that influential directors such as Hirokazu Kore-eda, Nobuhiro Suwa and Koji Fukada, who are aware of these developments, have spoken out,” he says, has helped “working conditions in the Japanese film industry move in the right direction.”

One producer who has taken the challenge of bringing more equitable practices to the film industry to heart is long-time Kore-eda collaborator and former Toei producer Muneyuki Kii, who launched K2 Pictures in 2023. 

“I founded the company based on my conviction that, compared to other countries, the Japanese industry remains highly ‘feudal’ in structure,” he says. “I believed that unless the industry becomes more democratized, it would struggle to sustain a healthy cycle or evolve into a new ecosystem.”

Alongside K2 Pictures, Kii launched the K2P Film Fund to back animated and live-action productions with a model that would fairly reward investors, creators and crew members.

“We have successfully completed fundraising and believe we’re progressing in line with the direction we initially set out to achieve,” says Kii. 

K2 Pictures is in Cannes launching sales on polyamorous drama Between Two Lovers, the debut feature of former Kore-eda assistant Nanako Hirose; Trophy by Son Myong A, another Kore-eda protégé; Miwa Nishikawa’s Children Untold; and Border by director Kazuyuki Izutsu (Pacchigi!).

Kii, too, notes the increasingly international approach across the Japanese film industry but suggests its long-term strength is based on its determination to make films whatever the prevailing winds of the day.

“The value of Japanese cinema lies in its commitment to consistently producing films regardless of whether business conditions are favorable or not,” he says, reflecting the commitment first witnessed by Cannes in the 1950s, when directors Yoshimura, Nakamura and Kinugasa arrived in competition with their films, all shot against the odds in postwar Japan.