Japanese Politics Updates – September 27, 2026

Good day from the home office. I am off the boat for the first time in a long stretch. We did last week’s briefing on Gryms and Typhoon Dwan hit Monday afternoon, a roller coaster the boat came through. Japan is being hammered again. Sudigay, number 26 of the season, is on Okinawa now and will skirt Kumamoto and the southern islands before it tests Kanto around Wednesday or Thursday. August put up ten typhoons, the first time in sixty years, and the year’s count has already gone past anything since 1994.

PM Takaichi left the next morning for New York, three days on the ground, and was home Thursday into a two-day working week. She got thirty-five minutes with President Trump before she spoke last at the United Nations. This is the sequence Tokyo wanted before President Xi sat down in Washington. An extraordinary Diet, session 222, opens October 5th and runs sixty-nine days into early December. That session has to carry the 45-seat cut promised to Ishin, the food-tax cut, and the outline of next year’s budget.

New York, Then Xi

President Trump spoke first on Monday. PM Takaichi spoke last. Between those two turns they sat for about thirty-five minutes. In a meeting with this president you do not always get through your list, and she did not. There is no new number for defense spending. The 3.5 percent figure Ambassador Glass used to float, and that Washington has been walking around Europe, was not even a topic. Neither was the $550 billion Japan has said it will put into the United States. What did come up was the yen, host-nation support, and U.S. sanctions that reach Tomoko Akane, a Japanese judge at the International Criminal Court.

On Friday she put it on the record that President Trump had told her the yen is undervalued and a U.S. trade problem. Finance Minister Satsuki Katayama had a call the same day with Treasury Secretary Scott Bessent and they both said as much. PM Takaichi then eased it back a notch for the domestic audience and talked about responsible fiscal expansion. Although that is not a reversal of what Katayama and Bessent said, it is the sentence she has to say at home while the two finance shops work the currency.

Her UN speech marked seventy years of Japanese membership and asked that the enemy-states clause in the Charter be revised. She did not name the United States. The pattern is the same as the one she used in Hanoi earlier this year. Japan will defend a rules-based order, including courts Washington is presently sanctioning, and it will work with regional partners without picking a public fight with its ally. She is not going to withdraw the November remark that a fight over Taiwan would be an existential threat to Japan. Beijing still says that sentence has to come out.

The next day Xi got the Andrews Air Force Base reception, a toast to the wartime U.S.–China alliance and the Flying Tigers, and three days of state ceremony. She was not on a state visit. She was there to speak at the UN and needed a corridor. Tokyo’s private read is simple enough. Ceremony for the peer. A corridor for the ally. The ledger she carried home is still open: the yen, the ICC, host-nation support, defense dollars, and the investment pact.

Mongolia’s prime minister is in Tokyo for three days on his first official trip abroad, under the special strategic partnership, with the 55th anniversary of the relationship due next year. Foreign Minister Toshimitsu Motegi was with her in New York and also sat a Japan–South Korea–United States foreign ministers’ meeting on rare earths.

Defense Minister Shinjiro Koizumi had another one-on-one with Defense Secretary Pete Hegseth on next year’s defense budget and host-nation support. Nuclear-powered submarines are now inside that conversation, a fleet and a lot of money that has not been walked through the Japanese public. A former foreign minister left today for four days in Beijing on the old Kōno trade-association channel, because the official track is frozen and the sitting prime minister will not get an invitation. APEC is in Sichuan in November. Her own next published trip is Budapest on October 22nd and 23rd. Until then she is in Tokyo, teeing up the Diet.

The Yen After a Verbal Squeeze

Monday through Wednesday were national holidays. The Tokyo market opened Thursday around 157, printed 156, and closed Friday at 157.3. There was no intervention. Bessent, Katayama, and the prime minister did it with their voices, and on the day it jumped the yen was the strongest of the G10. Officials on both sides of the Pacific are treating 160 as a tripwire. Between October and late November the working range is roughly 154 to 161, with the gravity still toward 160. Washington would rather see it closer to 150.

Tokyo and Washington already bought yen together this summer, the first coordination since 1998, when the rate stood at 166. The Ministry of Finance spent a record ¥15.4 trillion in August. They will not, on present form, let it run past 160 or 161. So long as U.S. yields can outrun Japanese government bonds the carry still pays. Intervention can stop a panic. This is not a panic. It does leave Bank of Japan Governor Kazuo Ueda a little outside the room. His voice does not carry the way it did when the two finance ministries were not talking this directly.

Session 222: Seats, Tax, and Hours

In the session just closed, PM Takaichi sat about thirty-two hours to take questions, typically in the Budget Committee, sometimes in the House of Representatives. Shinzo Abe sat about seventy. Shigeru Ishiba sat about ninety-one. That is not likely to change in Session 222. She calls it an efficient use of her time. The opposition calls it a shell game. They want her in the chair for the food-tax cut and they will treat her absence as another line of attack.

The draft still takes food from 8 percent to 1 percent for two years from April 2027. The hole is still ¥10 trillion over two years. She has said it will not be deficit bonds. She has not said, in a way that survives contact with a committee room, where the money comes from. That gives a fractured opposition something it can hammer collectively, and it gives Yoshimasa Hayashi a microphone on the road.

The 45-seat cut in the Lower House is the other half of last summer’s price to Ishin. It is all coming off the proportional list. The LDP will lose at least ten chairs. Komeito stands to lose something like 40 or 50 percent of its seats, which is why Ishin has been pushing the bill for two years. The LDP promised to get it done in this session now that Ishin is inside the cabinet. Even in the Lower House that is not a free vote. Members who are about to lose their seats will not all put their hands up. If the Upper House sends it back, a two-thirds override in the Lower House is the fallback. The coalition can probably muster that. It still has to get the bill that far.

She has written responsible fiscal expansion into the 2027 budget request. The ministries have taken that as an invitation. The Ministry of Finance is already asking how the bridge bonds get repaid. Requests aimed at AI, semiconductors, economic security, and defense are running hot. Defense talk that used to stop at 2 percent of GDP over five years is now in the 3.5 percent range, even if that number did not come up in New York.

Ishin Inside, and the First Scandal

Hiroshi Nakatsuka sits in the special-mission chair for regulatory and administrative reform. Five of the roughly twenty-two sub-cabinet posts went to Ishin. Osaka Governor Hirofumi Yoshimura called the arrangement historic, and it is. Osaka voters are less impressed. They liked Ishin as a counterweight to the LDP. A couple of recent local races already showed them walking away from a party that is no longer running against Tokyo.

The first scandal of the new cabinet is also Ishin’s. Nakatsuka received a suspended sentence in a bid-rigging case that the Supreme Court let stand. He calls the ruling wrongful. An aide is now alleging Obayashi money around a waste-plant contract. He denies it. PM Takaichi ran her due diligence on the names and still put him first when she read the list. In her first cabinet nothing of this size surfaced. This one arrived with the photograph. Whether it costs him the chair, and whether that slows the 45-seat bill, is an October question.

The Centrist Reform Alliance is a thing of the past. What remains is a two-member Democratic Reform grouping trying to keep the office open so the subsidy does not die. Yuichiro Tamaki’s Democratic Party for the People is now the largest opposition force, still in the low twenties. Over Silver Week Tamaki was in Ukraine while PM Takaichi was sitting with President Zelenskyy in New York, and Sanseito’s Sohei Kamiya was in Berlin talking to the AfD. The lane to the right of the LDP is trying to internationalize itself just as the LDP absorbs Ishin. There is an appetite for that flavor. The cost of bringing Ishin inside is that Ishin’s scandals are now government scandals.

Hayashi on the Road

Hayashi is not in the cabinet and does not intend to sit for one. In the last LDP presidential runoff he beat PM Takaichi among Diet members. She beat him among the rank and file. He wants the next twelve months to close that gap and is already talking about a forty-seven-prefecture tour. About a hundred first-year LDP members have no factional home, and they are the people a man of his posture can court. It will not be Takayuki Kobayashi or Koizumi or Motegi who comes at her from inside the cabinet. It will be Hayashi, and we do not yet know whether anyone else steps out of a ministry to join him. That race will define more of this year as spring comes into view. She is LDP president through 2027, and those two jobs are not the same thing.

Southwest Islands

Two weeks after Genta Koja took Okinawa, Koizumi is talking more openly about the southwest-island shift. Civilian airports and ports have already been designated for the Self-Defense Forces and the Coast Guard in peacetime. The Naha-based 15th Brigade is due to become a division in March 2027. Yonaguni is slated for electronic-warfare and medium-range SAM units, on the order of 2,300 to 3,900 personnel, by fiscal 2030. Beijing calls it a war footing. Tokyo’s line is that the chain has to be strong enough to protect the people who live on it. A share of Okinawa would still rather keep the peace constitution and not be the first island in a fight. That argument lost the governorship. Futenma-to-Henoko is still the test of whether the calendar actually moves.

Four North Korean sailors went in the water off the Oki Islands the week before last. The Japan Coast Guard pulled three out and recovered the fourth. Within forty-eight hours Tokyo sent them back by helicopter to the freighter that had been towing the boat, with no embassy, no concession, and no diplomatic channel to work. Two athletes on the North Korean team at the Asian Games have asked to stay. That is a different kind of problem, and it will be treated carefully.

Historical Frame

Tuesday is the 54th anniversary of the Japan–China Joint Communiqué. On September 29, 1972, Kakuei Tanaka and Premier Zhou Enlai signed it in the Great Hall of the People. Tanaka had been in office twelve days. Japan recognized Beijing as the sole legal government of China, recorded its understanding and respect for Beijing’s stand on Taiwan, waived reparations, and cut Taipei loose. The wager was that Japan could not organize a postwar Asia without a relationship with the government that actually sat in Beijing, and that this diplomacy could be separated from the U.S. security guarantee.

Fifty-four years later a former foreign minister is in Beijing on a trade-association ticket because the sitting prime minister cannot go. She needs an invitation, and she is not going to get one while the November sentence stands. The sitting American president has just toasted the wartime U.S.–China alliance against the country Tanaka was trying to step out from under. The 1972 Taiwan formula is the formula Beijing now says she has violated. The 1972 separation of diplomacy from the alliance is the separation Tokyo is trying to run again, with a weaker yen, a more demanding Washington, and a China that is no longer asking to be let in.

In Closing

The week runs a new typhoon, an intelligence council that meets for the first time, and eight days to the opening of session 222. October’s Diet will ask whether a cut that leaves a ¥10 trillion hole can pass a chamber the coalition does not control, and whether a 45-seat promise to Ishin can survive the members who have to lose those seats. Nakatsuka is the first scandal of a cabinet that is ten days old. Hayashi is on the road. The Upper House is still the problem.

She got the sequence she wanted in New York and not much of a number to bring home. Xi got the ceremony. The yen moved a full point on voices alone and closed Friday at 157.3, with 160 still the line both finance ministries are watching. Whether that line holds through the first week of the Diet is the market question. Whether PM Takaichi shows up to be peppered for the tax cut and the seat cut is the political one. Typhoon Sudigay is supposed to test Kanto midweek.

Thank you to everyone who joined and sent questions. We will be back next Sunday morning, October 4, 2026, at 8:20 a.m. JST.

— Timothy Langley