Japan Digest #235


 Japan – UK 2+2 Meeting

 

Japan and the United Kingdom held a 2 plus 2 meeting in London on December 14 and announced the following joint statement:

 

The two governments will apply maximum possible pressure to North Korea to make it give up its nuclear and missile development.

The two governments will collaborate with each other to keep the Indo-Pacific region free and open.  The two continue to share a serious concern about the present situation in the East and South China Seas.

The Japanese Ground Self Defense Force and the UK Royal Army will conduct a joint exercise in Japan next year. It should be institutionalized as a periodic joint exercise.

A new air-to-air missile will be jointly prototyped as quickly as possible. (The Japanese Air Self Defense Force is assuming to install the missile on its F-35 fighters.)

 

Foreign Minister Kohno and Defense Minister Onodera visited London and met with their individual counterparts, namely Foreign Minister Johnson and Defense Minister Williamson.

 

 Tax Revenue Increase Reduces New Bond Issuance

 

Japan’s fiscal 2018 (April 1, 2018 – March 31, 2019) budget is going to assume tax revenue as high as 59.1 trillion yen, which is highest ever since 1991 when the bubble economy peaked the tax revenue.

Although fiscal 2018’s spending is also increased, the rate of revenue increase is higher than the spending, so the amount of new national bond to be issued to finance the balance between the spending and revenue is going to be reduced from the previous year. 

It is going to be the 8th consecutive year of reduction of the new national bond issuance amount in a row.

 

 Japan-EU EPA Agricultural Products Protection

 

In the wake of the agreement of the EPA between Japan and EU, the two governments announced the individual agricultural products with geographical identity(GI), intellectual property of which should be mutually respected and protected as follows:

 

Japanese agricultural products with GI to be protected:

  • Kobe beef
  • Matsuzaka beef
  • Yonezawa beef
  • Yuubari melon
  • Ichida persimmon
  • Shimonoseki blow fish and 42 others

 

EU agricultural products with GI to be protected:

  • Camembert de Normandie
  • Roquefort
  • Feta
  • Parmigiano Reggiano
  • Gorgonzola
  • Gouda Holland
  • Mortadella Bologna
  • Cítricos Valencianos and 63 others 

 

Oi NPP To Be Decommissioned

 

Yomiuri reported on the 21st that Kansai Electric Power Company decided to decommission it's Oi Nuclear Power Plant #1 and #2 (1.175 MW each) in Fukui Prefecture.

As the result of the Fukushima Daiichi NPP’s accident of 2011, the safety standard was strengthened.

These two power plants are 38 years old and they would require a significant amount of investment to clear the new standard if not decommissioned.

Besides the demand of electric power in the Kansai region is declining.

Including these two plants, a total of 8 NPPs are decommissioning since the accident of 2011.

 

 Individual Financial Asset Highest Ever

 

According to the Bank of Japan’s quarterly report of Funds Circulation Statistics, the outstanding balance of Japanese individuals’ financial asset as of the end of September amounts to 1,845 trillion yen, which is 4.7% more in comparison with the same period last year and is highest ever.

Still, cash/bank deposit accounts for a lion’s share (51.1%) out of the total asset, while stocks and investment trust account for 10.7% and 5.6% respectively.

 

TPP To Be Signed In February 2018

 

Yomiuri reported that the Government of Japan is coordinating with the other 10 member nations to organize a signing ceremony for the Trans Pacific Partnership sometime between the end of February and early March 2018 in Chile.

After the signature, the partnership agreement becomes effective 60 days after a minimum of six nations ratify the deal.

 

This issue is the last one for the year.

Thank you so much for your subscription this year. 

I wish you a happy holiday season and a healthy and prosperous 2018!

Japan Digest #234


Emperor’s Abdication and New Emperor’s Enthronement Formalized

 

Imperial Household Council was convened on December 1 with PM Abe as chairman. 

The council members consisted of His Imperial Highness Prince and Princess Hitachi, Chairman and Vice Chairman of the House of Representatives and of the House of Councilors, Chief Justice of the Supreme Court and a few others.

The council unanimously agreed that Emperor Akihito is to abdicate on April 30, 2019 and Prince Hironomiya is to be enthroned on May 1, 2019.

It is going to be almost 200 years since a living Emperor abducted and was succeeded by a new Emperor at the last time (1817).

The Government of Japan is considering to make April 30, May 1 and 2 national holidays so that the Golden Week of 2019 becomes ten straight holidays from April 27 through May 6.

The name of the new era after Heisei (平成) will be decided and announced within the next year.

PM Abe will ask pundits and scholars of Japanese literature and Chinese literature to come up with a long list of candidates that meet the following criteria:

 

  • Having suitable meanings as Japanese people’s ideal
  • Consisting of two Chinese characters
  • Easy to write
  • Easy to read
  • Not used as worldly-minded

 

It will be narrowed down to a short list through legal and other important perspectives.

And finally, the Cabinet members will discuss to choose one.

Before his abdication, Japanese people will celebrate the 30th anniversary of Emperor Akihito’s reign on January 7, 2019.  

 

Tariff Agreement To Precede For Japan-EU EPA

 

The frame of the Japan-EU EPA was agreed by both sides in July this year.

Now the representatives of the Japanese and EU governments for the EPA negotiation agreed to separate the investment field of the EPA from the deal and to reach an agreement first on the other fields of it, namely tariff elimination and simplification of government procurement and customs clearance procedures etc., Yomiuri reported on Dec 2.

The tariffs of around 94% of the EU items that have been exported to Japan will be eliminated and the tariffs of around 99% of the Japanese items that have been exported to EU will be eliminated.

The largest beneficiary in the EU will be the producers of cheese and wine, while the Japanese auto industry will benefit from this deal a lot.

EU can ratify this agreement on behalf of the 28 member nations including the UK as far as their tariffs are concerned, while the 28 individual member nations need to ratify investment deals through their individual parliaments.

The Government of Japan and EU gave priority to the speed of launching the tariff deal as early as in the first half of 2019 after the mutual ratification next year.

And just a few minutes ago, TV news reported that PM Abe announced to the media that the two sides agreed on the tariffs today.

 

  Corporate Tax Rate Reduction As Incentive To Invest For Salary And Productivity Increases

 

The Abe Administration and the ruling LDP have solidified a new policy to lower the corporate tax rate as an incentive for Japanese companies to invest their abundant cash for their employees’ salary and productivity increases instead of increasing their retained earnings, Yomiuri reported on Dec. 8.

Currently, the effective corporate tax rate is 29.97% and it is to be reduced to 29.74% next year.

The incentive plan is to reduce the rate to as low as 20% for those companies which meet the following conditions:

 

1st Step:  the corporate tax rate will be reduced to 25% for those who meet the following conditions:

Wage/salary increase by 3%, and

Increase of capital investment by a certain target percentage

 

2nd Step: the corporate tax rate will be further reduced to 20% for those who invest in advanced technology such as AI or sophisticated software.

 

Enhancement of Japan’s BMD Capability To Be Accelerated

 

Yomiuri reported on Dec 8 that the Government of Japan decided to initiate the program to study how to introduce the U.S. Aegis Ashore, a land based Aegis BMD system in this fiscal year (2017) by inserting the fund in this fiscal year’s supplemental budget.

Originally, this program was to be launched in JFY2018, but the mounting North Korean threat is demanding an acceleration for Japan to strengthen the current BMD capability.

According to Yomiuri, it is assumed that two Aegis Ashore systems are sufficient to defend entire Japan against the North Korean ballistic missiles by deploying one in Akita Prefecture and the other in Yamaguchi Prefecture.

Japan Digest #233


  Emperor To Abdicate On April 30, 2019

 

Yomiuri reported that the Abe Administration got into the final detail to implement the following schedule of the Emperor’s abdication, the new Emperor’s enthronement, and era change:

 

December 1       Imperial Household Council meeting to discuss about the abdication 

                             timing

December 8      The Cabinet finalizes the date of Emperor’s abdication as a Cabinet

                            order.

Within 2018      The Cabinet decides on the name of the new era after Heisei and publicly

                            announces it.

April 30, 2019   Emperor’s abdication (anticipated)

May 1, 2019      New Emperor’s enthronement and a new era begins.

 

Emperor’s abdication is not presumed in the present Constitution, but the present Emperor announced his desire to step down in August last year considering the difficulty to fulfill the duty due to his age.

It urged the Government to structure a legal process to enable living Emperor’s abdication.

Such a legal process is almost over through the Diet session except for the positioning of the ritual of abdication as a Constitutional function of the Emperor or not. 

 

How To Keep The Sufficient Base of The House Of The Imperial Prince

 

Under the current Imperial Household Law, once a princess marries to a man, who is not a member of the House of Imperial Prince, she is no longer a member of the House.

For example, Princess Mako, the first daughter of Prince Akishinomiya earlier announced that she is marrying to a private citizen and she announced this week that the wedding is conducted in November next year. 

After the wedding, she is no longer a princess but a private citizen.

This is because emperors have been succeeded on the male line basis without exception since its inception.

However, this rule is now functioning to reduce the total number of the members of the House and the current members’ workload to not only fulfill Constitutional functions but also participate in national events as the honorable guest are growing much.

The Government of Japan, therefore, is going to organize nationwide discussions on how to keep the sufficient base of the House of the Imperial Prince right after the Emperor’s abdication is made.

One possibility is to allow the House of the Imperial Princess.  However, whether allowing a female line emperor or not is a difficult and delicate issue considering the 2660 years of seamless imperial history (including myth).

 

Fast Breeder Reactor Monju’s Decommissioning Begins

 

The Abe Administration decided to decommission the Fast Breeder Reactor Monju December last year in response to Nuclear Regulation Authority’s recommendation to look for a new operational organization to manage to operate this accidents-laden R&D reactor.

Japan Atomic Energy Agency under the Ministry of Education, Culture, Sports, Science and Technology announced this week that it would apply to Nuclear Regulation Authority for its decommissioning by the end of this month.

Once approved, it will begin retrieving the nuclear fuel in the next fiscal year.

The fuel retrieving work continues through 2022, followed by 20 years of work to remove equipment and piping systems of the reactor plus 5 years of dismantling and removal of the building.

 

Keidanren’s Visit To China

 

Mr. Sadayuki Sakakibara, Chairman of Keidanren, Federation of Economic Organizations took the delegation of the Japan-China Economic Association to China this week and met with Prime Minister Li Keqiang.

Mr. Sakakibara said in a press conference that he felt a different China being more positive and friendly for collaboration.

Considering the downtrend of Japan’s investment to China since its peak in 2012, PM Li expressed his hope that the Japanese business come back to China and contribute to Chinese economy by fresh investment.

The chairman told the media that the attitude of the top leaders of China changed to be a lot more positive, receptive and welcoming than before when the Senkaku Archipelago issue had frozen the relationship in 2012.

The media suspected that the change is coming from the Chinese President Xi Jinping’s “One Belt One Road” policy that is trying to connect China to Europe through the Eurasia Continent both on the ground and through the ocean, and requires a lot of investment for infrastructure etc.

Japan Digest #232


President Trump’s Visit

 

President Trump visited Japan from November 5 through 7 with three summit meetings with PM Abe and a courtesy visit to Emperor and Empress as well as a meeting with the members of the families, whose children or brothers/sisters were abducted by North Korea. President Trump played golf with PM Abe and a top Japanese golf player Mr. Matsuyama at the Kasumigaseki Country Club.

The two leaders signed a MoU to cover collaboration in exporting mutual infrastructure products in the field of energy, ICT and transportation to the Indo-Pacific region.

In case of energy, Yomiuri reported that the Japanese Government and the U.S. Government agreed to promote exports of American shale gas and Japanese thermal power plant and associated facilities as a package deal to emerging economies in Asia and Africa.

Although the Trump administration is exploring exports of shale gas produced in the United States to the world, most of the energy-hungry emerging nations in Asia and Africa are lacking LNG related facilities, pipelines and high-efficiency thermal plants that burn natural gas.

To this end, the government of Japan, with the support of the U.S. Government, will facilitate Japanese industries to invest in building LNG related facilities, gas pipelines and high-efficiency thermal plants in the region so that such nations will be able to import American shale gas for power generation.

Japan’s JBIC and NEXI signed a MoU with the U.S. OPIC on Nov 7.

This collaboration makes sense to Japan and U.S. not only for mutual business but more importantly for geopolitics because China is leading infrastructure exports in the Eurasia continent under the campaign of “One Belt One Road”.

 

Dialogue Oriented Approach To North Korea Hoped Most

 

Yomiuri conducted a public survey on November 1 and 2 in conjunction with the new Cabinet that PM Abe formed on the 1st of November.

The approval rating of PM Abe remained unchanged at 52% from the last time (October 23 and 24), while its disapproval rating went up to 40% from 37%.

In response to the question which options the international society should choose against the North Korean issue, either a dialogue-oriented approach or a pressure-oriented approach, 48% of the respondents chose the former and 41% for the latter.

Other key Q&As are as follows:

 

What are the top issues the Cabinet should work on now?

Diplomatic and national security issues including the North Korean issue: 62%

Economy and employment: 62%

 

Do you approve PM Abe’s decision to reappoint all the Cabinet members this time?

Yes: 45%

No:  39%

 

Do you approve that PM Abe stays in the position after September next year when the 2nd term of the presidency of the LDP expires?

Yes: 43%

No:  46%

 

Countermeasure of Declining Population to be Launched

 

PM Abe made it clear in the press conference of November 1 that his Cabinet would work on the issue of declining population and aging society from its social insurance perspectives.

He implied a plan worth 2 trillion yen including free preschool education for all the 3 to 5 years old children (kindergartens and nursery schools) and for 0 to 2 years old of low-income families.

Also, the plan is expected to include some investment to clear the issue of children on the waiting list (kindergartens and nursery schools) and free higher education for children of low-income families.

Furthermore, the plan is to cover improving care workers’ pays, promoting recurrent education and higher education reform.

All the necessary funding to implement this plan is to come from the scheduled increase of the consumption tax from 8% to 10% in October 2019.

PM Abe told that the detail of the plan would be announced early next month.

 

TPP 11 Reached Agreement In Principle

 

NHK reported today that the TPP 11 nations (Japan, Canada, Mexico, Australia, New Zealand, Singapore, Vietnam, Malaysia, Brunei, Chili, and Peru) reached agreement in principle during the ministerial meeting held in Da-nang, Vietnam.

Mr. Mogi, Minister in charge of Economic Revitalization chaired the ministerial meeting and told the story to NHK in the evening of November 10 right after the meeting ended.

Japanese consumers will find Australian beef cheaper once the deal is implemented thanks to the scheduled reduction of the tariff from the present 38.5% to 27.5% and eventually to 9%.

Likewise, New Zealand’s cheese will be cheaper thanks to the scheduled reduction of the tariff from the present 29.8% through various reduction steps to 0%.

Japan Digest #231


PM Abe’s Triumph

 

The snap election was held on Sunday the 22nd and the ruling parties, namely LDP and Komei dominated the seats of the House of Representatives as follows:

 

                         Before the election            after the election

 

LDP                            290                                   284 (-6)

Komei                          34                                      29 (-5)

Hope                            57                                      50 (-7)

CDPJ                             15                                      55 (+40)

Communist                 21                                      12

Restoration                 14                                      11

 

CDP: Constitutional Democratic Party

 

The total number of the members of the House of Representatives is reduced by 10 to 465 in this election as the result of the judiciary adjustment of the number of the members per constituency.

The ruling parties namely LDP and Komei were able to share more than the two-third line (310) once again, which enables them to propose a Constitutional Amendment in the Diet.

Now, CDJ became the leading opposition party but it is the weakest leading opposition party in terms of the number of the Lower House member ever since the end of the war.

             

Post Election Approval Ratings

 

On October 24 and 25, right after the snap election, Yomiuri conducted a public survey. 

The following are main results (data in the parentheses are the results of the previous survey conducted on October 7 and 8):

 

Do you approve the Abe Cabinet?                        Yes 52% (41%)               No 37% (46%)

 

Was it good or bad that the ruling parties’ share is beyond the two-thirds of the total of the Lower House members?                                Good 48%                       Bad 36%

 

Which party do you approve most:       

LDP 43%(33%),

CDP 14% (4%),

Hope 5% (8%),

Komei 4% (3%),

Communist 3%(3%),

Restoration 2%(1%)

 

Governor Koike Remains to be Party President

 

According to Yomiuri, Governor Koike, who was interviewed by the former U.S. Ambassador to Japan Ms. Caroline Kennedy in Paris during her business trip, told that there was an “Iron Ceiling” in the national election of October 22.

When she won the Tokyo Metropolitan Governor’s election, Gov. Koike said to the media that she broke through the glass ceiling, but this time, her party (Party of Hope) was completely defeated in the election of the House of Representative.

On October 25, she came back from Paris and attended her party’s management meeting.

She reportedly apologized to the members for the loss of the election saying that it is attributable to her careless statement that she would have tried to exclude the liberal side of the members of the Democratic Party.

This statement may have led to the great advancement of Constitutional Democratic Party and 19 independent members, who originally belonged to the Democratic Party.

Asked by the media if she would resign the Party President position, Gov. Koike replied that she would remain in the position because she needs to assume the responsibility of the founder of the Party.

She said she would concentrate on the governor’s job, while the party’s national political activity should be led by the Party’s Diet members.

 

President Trump’s First Visit to Japan

 

President Trump and the First Lady will make their first official visit to Japan as Distinguished Official Guests Visiting on Business from November 5 through 7.

The Emperor and Empress will receive the courtesy visit by the first couple and PM Abe will hold the fifth official face-to-face meeting with President Trump during his stay in Japan.

PM Abe and President Trump will meet with some of the families whose children or brothers/sisters were abducted by North Korea and have not been returned to Japan yet.

Also, the two leaders are going to play golf together with Japan’s top professional golfer Hideki Matsuyama.

Around ten thousand police officers were called to downtown Tokyo to conduct a security check on the streets, stations and other public places.

 

Have a wonderful weekend!

Japan Digest #230


LDP To Remain In Power

 

Yomiuri reported its monthly (October) survey result as follows (the figures in the parentheses are the September survey result):

                        

Do you approve PM Abe & Cabinet       Yes: 41% (43%)   No: 46% (46%)

 

Your favorite political party:

LDP 33% (32%)

Party of Hope 8% (9%)

the Constitutional Democratic Party of Japan(Note 1) 4%

Independents 38% (40%)

 

(Note 1)

The Constitutional Democratic Party of Japan (CDPJ) was founded by Rep. Edano, who once assumed the Vice President of the Democratic Party after he lost the party presidency against Rep. Maehara in September this year.

He left the party and founded CDPJ by grouping the liberal side of the Democratic Party members when President Maehara decided to bring all his party members under the endorsement of the newly founded Party of Hope.

 

The survey expanded the questions to cover the respondents’ attitude on the upcoming general election of October 22.

 

The result was as follows:

 

Which party are you going to vote in the coming election for the Proportional Representation System(Note 2)?

 

LDP 32% (34%)

Hope 13% (19%)

CDPJ 7%

Komei 5% (6%)

Communist 4% (5%)

Undecided 27% (25%)

 

(Note 2)

Voters cast two votes, one for a specific candidate in the voters’ individual districts (Single Seat Constituency System) and the other for a party (Proportional Representation System).

 

What is your most comfortable administration structure?

 

The present LDP+Komei coalition                                                            44%

LDP + part of opposition parties on a policy cooperation basis         54%

LDP alone                                                                                                     16%

Coalition of the present opposition parties                                            20%

 

Party of Hope Stalling/LDP Securing the Majority Yomiuri Forecast

 

Yomiuri revealed its election forecast as of October 11 based on the aforementioned survey result coupled with its individual local branches’ interviews as follows:

 

LDP: Surpassing the majority seats (233) and almost reaching the overwhelming majority (261) that chair all the standing committees.

Hope: Despite the number of the candidates (198), they are mostly behind in most of the Single Seat Constituency Districts except for 7 districts, and the number of seats the party is expected to gain from the Proportional Representation System is less than 40 at this moment.

CDPJ: Almost surpassing the line of 40 seats

 

Yomiuri analyzed that anti-Abe/LDP voters tend to choose CDPJ as their nest instead of the Party of Hope. 

The magnet of the Party of Hope is surely Governor Koike, but she decided not to run for this national election but to stay as Governor of Tokyo, meaning the party leader cannot become PM or form her Cabinet.

Besides, the clear difference of campaign promises between LDP and Hope are mostly just two points as opposed to many for CDPJ.  Making the scheduled increase of the Consumption Tax from 8% to 10% to be a source of freeing the educational cost of small children (LDP promise) vs. cancelling the scheduled increase and staying at the current 8%(Hope), and keeping the nuclear power generation (LDP) vs. shutting down all the nuclear power plants by 2030.  

 

 Nikkei Marked Highest Since 1996

 

Nikkei marked 20,881 yen on October 11, which is the highest ever since 1996.

Export oriented industries’ stock prices are on an upward trend thanks to the U.S. and steadily growing global economy coupled with relatively weak yen.

But, in reality, it seems that the Government of Japan is now playing a major role of investor in the stock exchange because the Bank of Japan has been heavily investing in Exchange Traded Fund (ETF) , while Incorporated Administrative Agency to manage public pension fund has been purchasing substantial amount of listed stocks.

The two organizations tripled the outstanding balance of the stock acquisition from 15 trillion yen (2012) to 51 trillion yen (2017).

 

Tokyo Ranked #3 – Global City Power Index

 

Mori Building Company’s research institute by the name of Institute of Urban Strategies of Mori Memorial Foundation released on October 12 this year’s Global City Power Index.

The highest in the ranking was London, followed by New York, and Tokyo was ranked the 3rd.

The institute evaluates 70 indices such as unemployment rate, longevity, river water quality, taxi fare, temperature and so forth to score six power factors, namely Economy, R&D, Cultural Interaction, Livability, environment and Accessibility.

44 major cities were selected for this ranking since 2008.

 

For more detail, please visit the following link:

http://mori-m-foundation.or.jp/english/ius2/gpci2/index.shtml

Japan Digest #229


Governor Koike Formed Party of Hope

 

Governor Yuriko Koike of Tokyo Metropolitan Government formed a new national political party by the name of Party of Hope on September 25.

The party was formed in time for the upcoming national election of the members of the House of Representatives due on October 22.

Since it is a brand new party, it does not have a long list of its candidates or large cash reserve to financially support its candidates either.

Rep. Maehara, the newly elected president of Democratic Party decided to allow its members to receive the endorsement of Party of Hope, and once the endorsement is given, Democratic Party will provide Party of Hope with financial support.

In the first press interview held to introduce her new party on Sept 27, Governor Koike described the mission of the party to run politics without the interference of any interest groups and conduct bold reforms so that Japan can be reset.

She also explained that her party’s value is conservatism with generous reform spirit burning.

As for campaign promises, she mentioned freezing the scheduled increase in the consumption tax from the current 8% to 10% in 2019 and shutting down all the nuclear power plants by 2030.

She is trying to make her party a very viable alternative to the LDP.

 

Ms. Koike graduated Cairo University in Egypt, became an Arabic language translator, then a TV newscaster and eventually a politician in 1992 as the member of the House of Councilors.

She won that election as a member of Japan New Party that was formed by then Kumamoto Governor Morihiro Hosokawa in 1992.

Then, she stood as a candidate for the House of Representatives in Hyogo Prefecture’s 2ndDistrict and won the election as well.

After the dissolution of Japan New Party in 1994, she joined the newly born conservative parties one by one, which formed a coalition with then ruling LDP.

In 2002, she joined the LDP and since then, she assumed several key positions of the parties as well as the cabinet member positions (Minister of Environment under PM Koizumi and Defense Minister under PM Abe’s very first Cabinet).

Governor Koike stood as a candidate for the president of the LDP in 2008 when then PM Fukuda stepped down the prime minister office.

Then, in 2016 when the former Tokyo Governor Yoichi Masuzoe resigned the governor’s position due to his mixing up official business with personal affairs, she stood as a candidate not under the LDP sponsorship but on its own to criticize the former governor and its party, LDP.   She won the election overwhelmingly against not only LDP’s candidate but also the candidates of the Democratic Party and Communist Party.

Right after the win, she formed a regional political party called Tokyo Residents First Party and gathered candidates of the members of the Tokyo Metropolitan Assembly and coached them to win the Assembly election for 2017.

And in this past July, the Tokyo Assembly Members’ election was held and Governor Koike’s party gained 55 seats out of 127, formed a coalition with New Komei Party (23 members) to be the ruling parties, and ousted the LDP to a minority party.

These past 14 months of her political challenges made Ms. Koike so visible and popular nationally although she represents just one prefecture out of 47.

With this nationally popular figure as a source of political capital, some alliance or even unification of the opposition parties by forming a new political party with the crown of Ms. Koike had been contemplated by the opposition parties’ leaders.

This movement turned out to be this rush of forming Party of Hope this week due probably to the move of PM Abe’s dissolution of the House of Representatives.

 

PM Abe Dissolved Lower House

 

PM Abe on Sept 28 dissolved the House of Representatives and the Cabinet decided that the national election will be held on October 22.

The incumbent 475 members were elected in December 2014, and their full term could have lasted up to December 2018 if there were no dissolution.

Out of the 475, LDP had 287 and New Komei had 35 making the ruling coalition parties cover more than two-thirds of the entire seats.

Although PM Abe explained the reason for the dissolution that he wants Japanese people to judge his new agenda to use the revenue from the scheduled increase of the consumption tax for education instead of repaying the government debt and to strengthen diplomatic and defense policy against North Korea as well as to amend the Constitution, he might have tried to strategically nip the bud before Governor Koike’s political capital taking shape on the national stage.

Now, PM Abe is reportedly setting the bar of his definition of “win” down to the “majority” instead of the “two-thirds”, which are needed to set the Constitutional Amendment procedure in motion in the Diet.

Whether this represents his miscalculation of the election timing or not is yet to be seen.

 

 PM Abe/LDP Approval Ratings Downing

 

Yomiuri revealed the result of its monthly survey of the Cabinet and the political parties’ approval ratings etc.

Although PM Abe’s approval rating went up to 50% in August, it went down to 43% this month.

LDP’s approval rating also went down to 32% from 40%, while the newly formed Party of Hope gained 9%.

It found 40% “independent” voters.

As time goes by, Party of Hope’s campaign promises becomes clear and an alliance of the opposition parties take shape, which may gain much more support from the independent.

Japan Digest #228


 PM Abe Regaining Political Capital

 

NHK reported in the evening news on September 11 that the Abe Cabinet’s approval rating went up by 5% to 44% from the last survey 3 months ago, while its disapproval rating downed by 7% to 36%.

PM Abe’s determined attitude against North Korea, as well as new Defense Minister Onodera and new Foreign Minister Kono's high visibility in the individual fronts, have been forming an image of a reliable and skillful cabinet under the difficult geopolitical circumstances.

Democratic Party, the largest opposition party has elected its new president Maehara. 

However, even the fresh start has not seemingly been able to successfully change the party’s image to a realistic alternative to replace the LDP. 

It may be due to some lingering internal conflicts and small personal scandals.

Also, Yomiuri reported on the 12th that its monthly survey, which was conducted from Sept 8 through 10 revealed that the Cabinet approval rating jumped to 50% from 42% of last month, while its disapproval rating dropped to 39% from 48%.

 

Following are the political parties’ approval ratings:

LDP                                                     40% (36% last time)

Democratic                                          5% (6%)

 

Japan To Approach ASEAN Closer For RCEP Vis-a-vis China

 

Yomiuri reported that the government of Japan has solidified its policy to support the ASEAN member nations to make all the necessary laws and rules in place to prevail electric commerce, to smoothen the trade and to protect IP through cross-border deals. 

Japan’s intent is to conclude the RCEP (Regional Comprehensive Economic Partnership: ASEAN (10) + 6 (Japan, China, Korea, India, Australia, New Zealand)) as soon as possible by exhibiting its initiative and leadership to ASEAN.

China has been influencing the ASEAN nations under its “Belt and Road” policy, a new Silk Road vision to integrate the Eurasia Continent and its seas with the China-centric economic zone.

Although the China-centric economic zone concept – One Band One Road - looks attractive to ASEAN thanks to its scale of the market, they are also concerned about being integrated with any external economic zone without sufficient know-how to protect individual consumers and local industries from global multi-nationals.

Japan’s support is to provide them with such know-how. 

It might be a bottom-up approach vis-a-vis China’s top-down approach for the RCEP. 

 

Japan Focuses On Closing TPP-11

 

The Abe Cabinet set the goal to reach an outline agreement of the TPP among the 11 member nations in this year’s APEC Summit Meeting in November.

The Abe administration once tried to persuade the United States to stay in the TPP, but after President Trump’s signing the Executive Order to depart from the partnership, it changed the game plan to lead the remaining 11 countries including Japan to reach a smaller scale TPP without the U.S.

The head negotiators meeting has been being held at an unprecedentedly high pace, almost every month and its next meeting is going to be held in Japan this month.

 

 New Policy To Support Lifestyle Of The “100 Year Life”

 

The Abe Administration recently launched a new policy titled “Human Development Innovation” and organized the “100 Year Life Era Concept Forum” to explore institutional reform of education, employment, social security and so forth to keep up with the growing aging society.

Its first meeting was held on September 11 and in that meeting, Professor Lynda Gratton of London Business School, whose book titled “The 100-Year Life: Living and Working in an Age of Longevity” was widely published, was invited.

She shared her thought in the meeting that the current typical life pattern of education phase, work phase, and retirement phase should be redesigned to accommodate and represent the 100 years of lifespan.   

The forum is going to discuss on how accessibility and availability of education to the wide spectrum of generations should be improved while mitigating the financial burden of educational cost for households with small kids. 

They will talk about how to expect senior people’s contribution as workforce and how to finance social security requirement for such a longer life.

Japan Digest #227


Majority Do Not Prefer PM Abe’s 3rd Term

 

Yomiuri and Waseda University jointly conducted a survey to find the public sentiment about politicians and political parties.

One of the questions was “how long do you want PM Abe to stay in the position?

41% of the people who participated in the survey replied: “up until September 2018 when the present term as the President of the LDP expires”.

23% responded that “he should step down immediately”.

Although 56% of those who approve the LDP replied that “PM Abe should stay through the next (3rd) term (until September 2021) or longer”, the survey revealed that the great majority of the total respondents are denying the 3rd term.

As for the intimate feeling to individual politicians and political parties, following are the scores with the scale of 0 (least intimate), 50(neutral) to 100 (most intimate):

 

<Politicians>

87th PM Junichiro Koizumi         55.1

Governor Yuriko Koike                54.9

Rep Shinjiro Koizumi                   54.2 (Deputy Chief Secretary of the LDP, son of PM Koizumi)

PM Shinzo Abe                             47.0

Rep Shigeru Ishiba                       47.0

 

<Political Parties>

LDP                                                 49.5

New Komei Party                         33.2

Japan Restoration Party              31.1

Democratic Party                         30.4

Communist Party                         24.9

 

North Korean Threat Could Be Interpreted As “Crisis of the Existence”

 

On August 10, in response to the question about the government response to the North Korean missile threat in the National Security Committee of the House of Representative, the new Defense Minister Onodera answered “if the threat turns out to be a “crisis of the existence” event to initiate the response, the Government of Japan can respond the threat.”

What this Q&A meant was a scenario under which North Korea intends to launch its middle range ballistic missile “Mars 12” aiming at a territory of the United States who is Japan’s ally, Japan can recognize the situation as “Crisis of the Existence” event, which enables Japan to exercise its collective defense right and triggers to intercept the missile using its own ballistic missile defense system. 

If, however, North Korea declares its target area as 30 km to 40 km off Guam Island, it might be difficult for Japan to interpret the attempt as “Crisis of the Existence” event because it is hard to interpret it as an attack on its allied nation, a senior defense official said to Yomiuri.

 

Japan’s Economic Growth Shifting To Internal Demand?

 

According to the Cabinet Office’s quick report, the Japanese economy in the 2nd quarter (April to June) of 2017 grew by 1.0% in a real term (4.0% on an annual basis) from the same period last year.

Individuals’ spending, which accounts for around 60% of Japan’s GDP, grew by 0.9% (3.6% annually).

Capital investment grew by 2.4% reflecting the high profitability of the corporate sector and the need to introduce robots and automation systems to cope with the declining labor force.

In the meantime, exports, which have been a driving force of Japan’s economic growth declined in the same quarter.

As the result, the internal demand contributed to pushing up the GDP by 1.3% in the quarter, while the external demand contributed to declining it by 0.3%.

 

Rapid Growth of Foreign Students Aiming At Care Worker’s Job In Japan

 

Japan’s present immigration law has been amended to add a new visa for “care worker’s job”, and the law will be made effective next month.

Foreigners, who acquired the national qualification to be a care worker, are entitled to this new visa, which allows a maximum five year stay in Japan and is renewable.

Because of this amendment, the number of foreign students who entered vocational schools in Japan to acquire care worker’s knowledge and skill jumped to 591 this year, which is 30 times more than five years ago.

More than 60% the foreign students came from Vietnam, followed by China, Nepal, Philippine and Korea.

 

 Tourism MBA and Professional Schools To Be Newly Founded

 

In order to strategically boost its tourism industry, the Government of Japan will authorize tourism MBA course as an officially qualified MBA degree in this month.

Based on this authorization, Kyoto University and Hitotsubashi University will open the tourism MBA course in their graduate schools.

The Ministry of Education, Culture、Sports、Science and Technology will also set a standard for newly open professional schools for tourism as early as April 2019.

These governmental initiatives are part of the Abe Administration’s tourism based growth strategy and are intended to enlarge and strengthen the base of its human capital for the tourism industry including service providers, tourism entrepreneurs and management.

PM Abe has set the goal for Japan to receive 40 million foreign visitors by the year 2020.

 

Welcome U.S. Ambassador Hagerty   

 

The new American Ambassador to Japan Mr. William Francis Hagerty IV arrived in Narita on August 17 and expressed his hope to the Japanese media that he would like to contribute to strengthening the bilateral relationship in the field of security and economy.

Japan Digest #226


PM Abe Reshuffled Cabinet

 

Responding to the ailing approval rate of his Cabinet caused by his own problems and the former Defense Minister’s very poor performance as well as some other ministers’, and to regain some positive momentum to build up his political capital to be invested to his next objective of the Constitutional Amendment, PM Abe reorganized his Cabinet on August 3.

Finance Minister Aso, Chief Cabinet Secretary Suga, METI Minister Seko, Minister of Land, Transportation and Infrastructure Ishii and Reconstruction Minister Yoshino stayed, while 14 other members were newly appointed by Abe with the consideration of not only the individual experience and ability but also their political factions.

Among others, the Kishida faction headed by former Foreign Minister Kishida gained the largest share (4 members) as well as Kishida’s appointment as the chairman of the LDP Policy Research Council.

In order for PM Abe to seek for the political momentum for the Constitutional Amendment, the Kishida faction’s support for LDP’s uniformity is indispensable, the media analyzes.

The former Foreign Minister Kishida is said to be one of the most likely candidates at the LDP to succeed Abe, while interestingly two newly appointed Cabinet members are not shy in announcing their willingness to participate in the LDP Presidential election next year.  One is Minister of Internal Affairs and Communications Seiko Noda.  She was the former Chairman of LDP’s Executive Council.  The other is Mr. Taro Kono, the new Foreign Minister.

Among the 19 Cabinet members, three graduated Harvard University (master’s degree) and one graduated Georgetown University (bachelor’s degree).

 

Cabinet Reshuffle Boosted Approval Rating By 6%

 

Yomiuri’s telephone survey conducted right after the announcement of the Cabinet reorganization revealed that Cabinet approval rating went up by 6% to 42% from the last time, which was conducted in early July.

Its disapproval rating went down by 4% to 48%.

The largest reason for disapproval of the Cabinet is the lack of trustworthiness of PM Abe due to the insufficient explanation at the Diet session of his personal involvement in the governmental approval of a new school as part of a private university, which is headed by PM Abe’s acquaintance.

LDP’s approval rating went up by 5% to 36%, while the approval rating of Democratic Party - the largest opposition party stayed at 6%.

Ms. Renho, President of Democratic Party announced last week her resignation as the party president.

If there were visible candidates to replace PM Abe either internally at LDP or externally at the opposition parties, the survey might have shown different results.

 

PM Abe Ordered Review Of NDPO

 

Right after the announcement of the reshuffle of his Cabinet, PM Abe ordered the new Defense Minister Onodera to review the present National Defense Program Outline covering Japan’s defense policy through 2024 to respond the recent North Korean and other North East Asian security environmental changes, Nikkei reported.

NDPO provides the base of the Mid-term Defense Plan that defines defense procurement plan.

Although the Japanese Self Defense Forces are equipped with ballistic missile defense capabilities like the Aegis destroyers and the Patriot System, North Korea’s demonstration of ICBM launching may present some more threat than originally expected.

As a case may be, the Aegis Ashore, an onshore version of the Aegis Combat System might need to be introduced, the media reported.

Besides, China’s recent provocative activity in the area of the south west region of Japan’s territorial air space and water might require some more defense capability to be built in that region.

 

Multi Nationals Upward Revisions of Fiscal 2017 Profit

 

Just like American multi-national corporations, Japanese MNCs are enjoying the enlarging demand of the foreign market.

According to Mitsubishi UFJ Morgan Stanley Security’s survey, around 8% of the Japanese major MNCs, which end their fiscal 2017 in March next year and had announced their first quarter results (April-June), would revise their profit forecast upward.

They are MNCs of auto, industrial robot, electric and communication infrastructure companies.

They answered that they have been experiencing much stronger global market response than originally expected.

There was a similar phenomenon four years ago, when many MNCs revised their profit forecast upward, but the main cause was unexpected depreciation of yen.

This time, the main cause is the unexpected growth of the global market demand.

 

More International Conventions To Be Invited

 

Nikkei reported that Japan Tourism Agency, METI, the Japan National Tourism Organization and 12 major cities like Yokohama and Fukuoka, which have large convention centers will collaborate with each other to proactively work on organizers of international conventions, exhibitions and scientific societies as well as large corporations to invite their events to those cities’ convention centers.

Their goal is to have 30% of Asian events in Japan by the year 2020 when the Tokyo Olympic Games are held.

 

Japan To Qualify Chinese Hospitals For Medical Tourism

 

Nikkei reported that Medical Excellence Japan(MEJ), a generally incorporated association led by the Japanese government, would deliberate and qualify hospitals in China.

The number of Chinese people visiting Japan to cure their serious disease is growing year by year, but so is the number of troubles caused by some malicious brokers, which pretend to represent Chinese hospitals side to dispatch their patients.

MEJ will check individual hospitals in China if they can disclose patients’ treatment historical record and if they can share with Japanese hospitals that treated their Chinese patients follow-up data continuously after their return to China.

Once they are qualified by MEJ, they do not require any brokers to send their patients directly to Japan.

The government of Japan recognizes medical tourism as part of tourism and positively promotes the flow of foreign visitors to Japan.