Japan Digest #379

1.        PM Kishida Attended Deliberative Council On Political Ethics


On February 29, PM Kishida appeared before the Lower House Deliberative Council on Political Ethics. 

It is the very first time for a sitting prime minister to attend the council on political ethics in the Japanese political history.

Although the 50+ people out of the LDP Diet members that the opposition partied demanded to appear on the council to clarify their off-the-book fund issues do not include Kishida, he took initiative to show up as President of the LDP and try to demonstrate to the public his responsibility of accountability.  

A deliberative council on political ethics is normally held in a closed door arrangement where no media is allowed to attend, while Kishida also took initiative to invite the media to broadcast the deliberation.  

Four members out of the former Abe Faction and one member from the former Nikai Faction individually attended and responded questions from the council members on the 29th and March 1.

Although it was a bet of PM Kishida to make this as a breakthrough against the current impasse of the regular Diet session for the next fiscal budget and as a booster to gain back his political capital, how the public recognized the exchanges at the Lower House Deliberative Council on Political Ethics is yet to be seen.


2.        Japan And NATO To Strengthen Cooperation In Cybersecurity and Space


Foreign Minister Kamikawa received a visit by NATO Commander Christpher G. Cavoli at the Foreign Ministry on February 26.

It is the very first visit of a NATO Commander to Japan.

Minister Kamikawa and Commander Cavoli covered various geopolitical topics including the Russian invasion of Ukraine.

Kamikawa stressed that the security of Europe and of the Atlantic Ocan and that of the Indo-Pacific Ocean are undividable, while Cavoli replied that cooperation with like-minded nations like Japan is becoming more and more important for NATO. 

The two reached agreement to strengthen mutual cooperation in the field of cybersecurity, space and ocean security.


3.  Foreign Money Shift To Japan From China


On February 22, Nikkei’s average stock price surpassed the highest record of 38,915.87 yen that was marked 34 years and 2 months ago. 

In 1989, Japan was under a bubble economy, and not only the stock prices and real estate prices but also real economy had been building up the value.

This time, real economy is still slow yet Japanese listed companies are mostly in good conditions building up assets and retained earnings. 

Realizing Japanese stock prices are theoretically undervalued in terms of PER etc., and thanks to weak yen, foreign investors, who had been investing in China are now shifting their resources to buy Japanese stocks, which is driving the stock prices to soar.

How quickly and how much those Japanese listed companies would share their given benefit with their individual employees and how it could trickle down to the Japanese real economy are yet to be seen.


4.  MoD To Inaugurate Defense Innovation Technology Research Institute


Yomiuri reported on the front page this week that the Ministry of Defense would inaugurate a new research institute by the name of Defense Innovation Technology Research Institute (DITRI) in this fall. 

This institute will be staffed by around 100 people, a half of which will be contracted out from private companies and universities.   

The MoD will look at the Defense Advanced Research Projects Agency (DARPA) and Defense Innovation Unit (DIU) in the US Defense Department as great models of DITRI. 

The MoD expects that DITRI’s DARPA type research will explore “breakthrough technologies” such as one that enables detecting enemy submarines by elementary particles, while its DIU type research will seek for dual-use technologies such as one that enables unmanned vehicles autonomously complete missions by using AI and image recognition.


5. TSMC Opened Its First Kumamoto Operation  


TSMC the world largest semiconductor foundry held an opening ceremony of its first semiconductor manufacturing factory in Kumamoto on February 24.  

The groundbreaking ceremony of the factory was conducted in April 2022, and the construction was completed in December last year. 

This operation will start producing 12 to 28 nanometer sized logic semiconductors in October this year. 

A total of 8.6 billion dollars was invested for this operation with the Japanese government’s subsidy as large as 476 billion yen ($3.17 B).

TSMC has already announced its plan to have the 2nd plant also in Kumamoto to produce 6 to 12 nanometer sized advanced semiconductors by investing $13.9 B. 

Its groundbreaking is expected to be conducted in the end of this year aiming at the start of operation in the end of 2027.    

PM Kishida sent his video message for the opening ceremony and officially expressed the government financial support for the 2nd plant construction as large as 732 billion yen ($4.88 B). 

The two plants will not only create around 3400 new jobs locally but also serve as a very critical node of Japan’s semiconductor supply chain from its economy security viewpoint.  


6. Lowest Number of Babies Ever In 2023


The Ministry of Health, Labor and Welfare announced on February 27 that 758,631 babies were born in Japan in 2023. 

This is the 8th consecutive year to renew the minimum record of newly born babies. 

The number of newly married couples was 489,281 last year, which is a 5.9% decrease from 2022. 

The pace of declination of newly born babies is much accelerated than originally projected by National Institute of Population and Security Research last year. 

In fact, the institute had projected that the number would have come down to the 750,000 line in 2035. 

The number of death is growing three years in row. 

Last year, it was 1,590,503, which is a 0.5% increase from 2022.

Considering the Japanese baby boomers are turning to 75 years or older, Japan’s population decrease is forecasted to be accelerated.