Weekly Briefing Synopsis — Episode #220 April 27, 2025
Quick Highlights
- Golden Week kickoff: Broadcasting from Habu Port, Oshima Island!
- Yen volatility: Closed Friday at ¥143.44; intraday low at ¥139.89.
- Core inflation: Surged to 3.4%, highest in two years.
- BoJ Meeting: Scheduled for April 30-May 1; major market anticipation.
- Trump Tariff Talks: Japan cautiously negotiating; skepticism high.
- Consumption Tax Debate: Strong Diet discussions to cut tax rates.
- Rice prices spike: 92% YoY; US rice imports increased; some from S.Korea too for the first time!
- Defense posture shift: SDF joins Philippines drills; constitutional issues resurface.
- Netherlands-Japan ties: 425 years of diplomatic relations celebrated.
- PM Ishiba’s struggles: Approval in high 20%; majority wants early exit.
- AI Development Bill: Passed Lower House, balancing promotion and regulation.
Main Briefing
Setting the Scene
Timothy Langley broadcasted live from Habu Port, nestled in Oshima’s collapsed volcanic caldera, to mark the start of Japan’s Golden Week. Despite traveling, the Weekly Briefing remains uninterrupted, reaching its 220th consecutive week.
Yen Market Watch
The yen fluctuated wildly this week: a midweek low of ¥139.89 before closing at ¥143.44 on Friday. Investors are anxious due to uncertainties in US-China relations and ongoing tariff talks. Market-watchers expect even sharper moves ahead of the critical Bank of Japan meeting.
Core Inflation Concerns
Japan’s core inflation clocked in at 3.4% — far above the BoJ’s 2% target. Food prices are soaring; rice, Japan’s staple food, is up 92% YoY. The BoJ’s April 30-May 1 meeting may hint at further tightening measures.
Trump Tariffs and the Ishiba Administration
Negotiations with the Trump Administration remain tense. The Japanese delegation’s meetings in DC, including a surprise encounter with President Trump, were mostly scoping exercises. A 90-day grace period is underway, but skepticism in Japan is high: 70% of the public doubts a successful outcome. The LDP not only expanded its negotiating team in preparation but is pursuing a supplementary budget to handle the expected negative aftermath. For example…
Consumption Tax Cut Debate
With economic pressure mounting, political momentum builds toward a temporary consumption tax reduction. Proposals include dropping food tax to zero percent and reducing gasoline taxes. However, fiscal conservatives warn against undercutting government revenues so soon after passing the largest budget in Japan’s history.
Rice Price Crisis and Imports
Rice prices have skyrocketed, forcing Japan to boost imports from the United States and, for the first time, South Korea. Although Korean rice imports are minimal (2 tons), the shift signals the government’s urgency in tackling food inflation.
Defense and Constitutional Issues
Japan’s Self-Defense Forces participated in large-scale exercises in the Philippines alongside the US and Australia, prompting constitutional debates about the limits of “self-defense.” Politicians like Sanae Takaichi are leveraging this environment to revive discussions on a constitutional amendment.
Japan-Netherlands Relations
Prime Minister Ishiba hosted Dutch Prime Minister Dick Schoof to celebrate 425 years of diplomatic relations — dating back to Dejima and the Dutch East India Company. The Netherlands remains Japan’s fourth-largest destination for outbound investment.
Prime Minister Ishiba’s Shaky Standing
PM Ishiba’s approval ratings lingers at the high 20% range. Roughly 60%of voters want him to step down before the next election. Yet, alternatives remain unconvincing, keeping Ishiba in place — for now. Trump tariff talks will carry significant weight.
AI Development Law Advances
The Diet passed a bill promoting AI innovation while imposing strict regulations on personal information protection and copyright infringement. The Ishiba government seeks to accelerate Japan’s AI competitiveness, while minimizing misuse risks.
Questions from the Audience Answered Exclusively during the Briefing
- How much American rice does Japan import annually?
- Will tariffs push Japan toward a military-industrial strategy?
- Are bureaucrats sensitive to public opinion on Self-Defense Forces expansion?
- Is there room for reciprocal strategic investment between Japan and the US (e.g., tech, LNG cars)?
- What is Ishin’s strategy regarding joining a coalition government?
- How many Japanese politicians are traveling abroad during Golden Week?
- Could AI development in Japan catch up despite language barriers?
- Why isn’t a major reshuffle happening before the Upper House election?
Thank you for following the 220th Weekly Briefing!
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