Japanese Politics Updates – April 6, 2025

Spring is finally here, but Mother Nature has a mind of her own—just as the rain started to fall in Katsuyama, so too did the tariffs drop in Washington. From weather to geopolitics, it’s all about storm management this week. Broadcasting once again from the deck of the good ship Gryms and anchored but not idle, we welcome you to your weekly dive into Japan’s ever-evolving political landscape.

Week in Brief

• • Japan’s Budget Passed on Monday: The largest-ever postwar budget at ¥115.2 trillion passed after rare constitutional amendments required a back-and-forth between houses.

• • Yen Strengthens: The yen rallied to 145.53 against the dollar on Friday, triggering speculation about possible government intervention.

• • Trump Tariffs Shock Allies: A sweeping 25% tariff on Japanese autos and 24% on goods caused alarm, prompting emergency responses from the government.

• • Abe Faction Leaders Return: the one-year ban is over for punished LDP figures (for participating in the slush-fund scandal) to now re-enter the political stage, complicating PM Ishiba’s leadership.

• • Global Instability: South Korea’s president impeached; meanwhile, the US and others see heightened political tensions as a consequence.

• • Election Season Looms: Upper House election scheduled for July 20; Tokyo gubernatorial vote also set for just the month earlier: June 22.

• • Supplemental Budget Already? Rumors swirl of additional spending despite the ink barely drying on this year’s record budget.

• • Expo Osaka Begins: Potential political and economic wins for Ishin no Kai—but also a liability if execution stumbles. Starts next week!

Budget Passes, But With Drama

Japan’s historic ¥115.2 trillion budget passed barely, after procedural back-and-forth, marking the first postwar instance of budget amendments forcing a return to the Lower House. The passage clears the way for legislative wrangling ahead of the Tokyo and Upper House elections.

Yen Movement Signals Market Unease

The yen’s rebound to 145.53 has not been seen since early 2023. While a weaker yen helps imports and tourism, it squeezes exporters and raises alarm in Nagatachō. With inflation surging and as 1,500 more products will experience price hikes this week, the Bank of Japan may be forced to act.

Trump’s Trade Blitz Rattles Tokyo

President Trump’s dramatic announcement of 25% auto tariffs and a 24% general tariff hit Japanese industry like a thunderclap and Japan joined a global lineup of countries blindsided by U.S. protectionism. The PM Ishiba’s administration immediately convened an emergency multi-party meeting to strategize a response. A forward-looking sitdown with the leaders of the various political parties was called on Friday, an extremely rare occurrence that highlights the emergency nature of the tariff announcements. Some kudos for the PM, some pointed criticism.

A Fragile Political Landscape

PM Ishiba faces internal and external fire: opposition parties criticize his slow reaction to Trump’s move, while LDP hardliners and returning Abe Faction members smell blood and are circling. Despite calls for his resignation, most pundits agree that PM Ishiba may remain for now. This is because his weak leadership benefits the opposition in the lead-up to elections.

Experimental Politics and the Path Forward

A new Fiscal Reform HQ under the LDP, led by Policy Chief Onodera, signals a push toward a supplemental budget and a gasoline tax cut. This shows a government trying to pivot quickly to boost public sentiment. Not surprisingly, with the economy continuing to sink, and elections looming, the LDP is looking for events that will help them gain favor with the public and draw more voters into the LDP-supporter pool. 

Expo 2025: Political Springboard or Pitfall?

Osaka’s Expo opens under the shadow of underwhelming ticket sales and construction delays. Ishin-no-Kai, whose power base is in Kansai, may rise or fall with the Expo’s success. PM Ishiba’s cool distance from the event speaks volumes but things could turn around. Things are still in-play and furious backroom negotiations continue. And at the same time, DPP seems to be increasing its coziness with the LDP, sending shivers up Ishin.

South Korea’s Political Earthquake

President Yoon’s impeachment by unanimous constitutional committee vote adds to a wave of global political instability. This could roll back recent gains in U.S.-Japan-Korea cooperation and shift Northeast Asian geopolitics again. 60 days is now required to seat his replacement.

Disgraced Leaders Return

11 suspended LDP members, most from the Abe Faction, are back. You might remember that as penance, they were removed from ANY leadership positions within the Party, the Administration, or inside the Diet. Their return re-ignites factional jostling and leadership calculations ahead of the Upper House vote. Meanwhile, Ishin and the Democratic Party for the People position themselves as viable alternatives to a weakening LDP-Komeito coalition.

Questions From the Audience answered exclusively during the briefing

• What should PM Ishiba say in his upcoming call to President Trump?
• Will successful negotiations with the Trump Administration help PM Ishiba keep his job?
• What does the formation of the new LDP Fiscal Reform HQ under LDP Policy Chief Itsunori Onodera signify
• How might Expo Osaka 2025 influence local and national political dynamics?