Japanese Politics Updates – March 16, 2025

Thank you for tuning-in, fellow Japan Hands! Here is your weekly update on what transpired of keenest interest over this last week in Japanese politics (and the like). The live version is on Sunday mornings (Tokyo). Since not everyone can join here is a brief synopsis. Broadcasting on this rainy day not from the deck of sailing vessel Gryms, but instead from the back seat of my car so I can be closer (and drier!) to a viable WIFI signal… just for you:

• • The Yen closed at $/¥148.64, weakening just a tad from last week.

• • Prime Minister Ishiba’s leadership crisis

PM Ishiba is facing significant political turmoil and challenges within the LDP due to two self-inflicted mis-steps. The the most serious one occured just three days ago. 

• • • Voucher Scandal: Ishiba’s gifting of ¥100,000 vouchers ($670) to 15 first-term LDP lawmakers drew heavy criticism amid existing financial scandals. All recipients returned the vouchers, generating significant political damage.Budget Crisis: Delays and two historic amendments to the budget have exposed PM Ishiba’s vulnerability. Initially scheduled for passage on March 2, passage from the Lower House was delayed to March 5 and then faced even further disruptions in the Upper House.
      • Medical Co-payment Reversal: Strong opposition forced PM Ishiba to abandon plans to increase patients’ out-of-pocket expenses—a major setback undermining his authority.
      • Public Call for Resignation: an influential Upper House LDP member publicly demanded Ishiba step down—a stark indication of internal party fractures and eroding support.
    • • Ishiba’s future looks increasingly uncertain, with internal critics and external opposition seizing opportunities to weaken his position.

• • US-Japan Relations 

• • Trump’s Pressure Escalates as his second term impacts bilateral relations:

• • Former Ambassador to Portugal and Trump loyalist George Glass is expected to be confirmed as Ambassador to Japan soon. He espouses increased defense spending, and says he will push for higher contributions to US military costs, address Japan’s trade imbalances, and point-out Japan’s currency manipulation, his testimony reveals.

• • Tariff Standoff

• • Japan’s appeals in two separate instances this week, by two separate Ministers of State (in Canada & in D.C.), to ease US tariffs on steel and aluminum (25%) were rebuffed, with threats looming over automotive exports, too — a critical sector for Japan’s economy.

• • Currency Volatility

• • The yen fluctuated notably, strengtening and then weakening to $/¥148.64 amid economic uncertainties and looming tariff threats.

• • Anniversary of March 11 Tripple Disaster 

Japan commemorated 14 years since the devastating 2011 earthquake, tsunami, and Fukushima disaster.

• • Over 22,000 lives lost, 90% from drowning.

• • 27,000 locals remain displaced, with Tohoku’s recovery still incomplete.

• • Controversial plans to redistribute radioactive soil elsewhere throughout the region face significant public resistance, as expecte).

• • Promises of rural revitalization under Ishiba remain largely unfulfilled, highlighting persistent regional neglect and doubts about his leadership.

• • Rengo’s Wage Negotiations (Shunto)

Spring wage negotiations yielded (so far) a record 5.46% increase, highest since 1991:

• • Toyota will boost monthly salaries by ¥10,000 ($67). The company will also provide a substantial bonus package equivalent to ~7.6 months for this year!

• • Despite these future gains, household spending growth remains extremely sluggish. Estimates for the last three months of 2024 (2.8%) were revised down to 2.2%, sending the yen reeling mid-week. 

• • The Bank of Japan also reported growth of only 0.8% in January when it was predicted to be at 3.7%, dampening the broader economic outlook amid persistent inflation. This trend continues.

• • The Bank of Japan’s monthly two day meeting is this next week on Wednesday/Thursday: expect some pronouncements of importance.

• • Stockpiles of rice held by the Japanese government went on auction this week. They will now enter the stream of commerce quickly in order to counter the enormous price rise in this staple over the last 3 months.

Election Watch & Possible Instability: Double Election Speculation Grows

Speculation about a possible double election intensifies as Japan approaches the critical Upper House elections:

• • The LDP lacks a secure majority in the Lower House and faces a shaky coalition with Komeito. LDP’s precarious position in the Lower House and the potential loss of their slim Upper House majority (+18 / 248 while in the Lower House -13/465) could trigger demands for a double election.

• • Opposition parties, including Ishin-no-Kai but particularly Mr. Tamaki’s DPFP, sense vulnerability and are eager for a political rematch. Heated words are flying inside the Diet.

• • Results from the upcoming Tokyo Metropolitan elections will be closely watched as a critical indicator, occuring as they do mere weeks before the Upper House elections start. Opposition parties are packing candidates for challenging LDP-held seats. In the meantime, Komei-to has decided to run some candidates in formerly ‘secured’ LDP districts. All is in turmoil.

• • Common Nagatacho wisdom is that, if you need to change the PM, it is better for elections to execute this change immediately in order to put enough space inbetween the change-event (or attempt) and the election. In our current case, this means immediately after the Budget passes. The Upper House election is a mere three months away!

Osaka Expo 2025

Political and Diplomatic Stakes

Governor Yoshimura (also the head of Ishin-no-kai) struggles to boost ticket sales for Osaka Expo 2025, seeking crucial LDP support. Expo success, however, could significantly elevate Ishin-no-Kai’s political standing. Meanwhile, Tthe US delegation’s potential representation by VP J.D. Vance underscores diplomatic importance, shaping bilateral relations.

St. Patrick’s Day Celebrations

Notable cultural festivities, including Asia’s largest Irish parade in Omotesando, illustrate Japan’s global cultural engagement.

Shohei Ohtani & MLB Tokyo Opener

The Los Angeles Dodgers, featuring probably the greatest baseball player in history Ohtani, will open MLB season at Tokyo Dome against the Chicago Clubs, signifying strong U.S.-Japan cultural ties and sports diplomacy. The two NBA teams will play two exhibition games and two season games right here in Tokyo! 

Legislative Controversies

The surname law debate continues. There is sharp internal divisions within the LDP and between coalition partners regarding allowing married couples to chose separate surnames. This controversy and that of political contributions are rifting the LDP into separate camps.

Questions from the Audience Addressed Exclusively During the Briefing

• • PM Ishiba giving ¥100,000 gift-vouchers to 15 first-term LDP lawmakers—how does this impact the 2025 budget and the LDP/Komeito relationship with Ishin-no-Kai? Doesn’t this voucher-gifting infringe on the Political Funds Control Law?

• • The whole Western bloc is being reordered—from Eastern Europe to Canada to Japan. Do you think there’s an existing political leader in Japan able to handle this change? Or will someone new rise to meet this moment? If it’s someone unknown, what would that look like within Japan’s political system?

• • The Japanese frigate, stelth-type Mogami Class ‘Noshio’ is currently visiting Australia—what does this visit mean at this particular time?

• • Why does the Japanese government want to revive a military-industrial complex rather than developing another industry that doesn’t involve killing people?

• • How about giving everyone in Japan ¥100,000 as a handout instead? Wouldn’t that be more helpful for the economy?

• • Australia will buy stealth frigate technology from Japan—does this indicate that Japan is moving forward with its military export ambitions under the current geopolitical situation?

• • Why can’t Japan use more imagination to find alternative industries instead of focusing on weapons development and military spending?

• • Does Prime Minister Ishiba have any good advisors who could prevent him from making controversial decisions like gifting vouchers to lawmakers?

Final Thoughts: Japan at a Pivotal Moment

• • Ishiba’s leadership faces severe threats from within and outside the LDP; ready to snap.

• • Economic tensions with the US are escalating, casting a pall over Japan’s stability. You can increasingly sense it in everyday life, this uncomfortable lack of certainty.

• • With key elections looming, the possibility of significant political shifts is higher than ever.

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