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Japanese Politics Updates – January 7, 2024

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This is the synopsis of the weekly Japanese politics updates, Japanese Politics One-on-One”, Episode #152 (45 minutes w/ 70-minute Q&A). As a sign-of-appreciation (if you have any), Like, Comment, Share.

This week's significant events in Japan

  • Our condolences go to those affected by and suffering from the major 7.4M earthquake on the Noto Peninsula. This will leave a long-lasting impact just as the region was building up a tourism base for visiting foreigners. Currently, ~100 people have died and hundreds have sustained injuries. Lifeline services are cut and more damage is to be discovered as first-responders arrive throughout the devastated region. More than 1200 earthquakes registered since the big one on Monday afternoon. Prime Minister Kishida, the Chief Cabinet Secretary Hayashi were immediately on TV providing updates. The Governor of Ishikawa personally appeared at the Prime Minister’s office the next morning to assist in guiding relief and rescue from the capital.
  • The JAL crash with the Coast Guard plane at Haneda Airport in Tokyo on Tuesday evening dominated the news this week. 379 people on the packed JAL plane miraculously escaped serious injury. At the same time, 5 of the 6 individuals on the Coast Guard plane unfortunately perished. Our thoughts and prayers go out to them and their families. They were on a mission to ferry supplies to the earthquake-stricken area.

Ongoing political funds scandal

  • As anticipated, even in light of the New Year’s break, the Office of Public Prosecutor has been busy. Yasutoshi Nishimura (60 yo, 7x, LH Kobe, Abe), until 10 days ago METI Minister, underwent questioning Thursday… the last of the heavy-hitters within the Abe Faction to be singled-out last week. Nishimura succeeded Hirokazu Matsuno (60 yo, 8x, LH Chiba, Abe) as the Abe Faction Secretary General (10/21 ~ 09/22) when Matsuno became Chief Cabinet Secretary for PM Kishida (and thus presumably in-line for this #2 powerful position eventually?). It turns out that this Abe Faction position seems to be key to Prosecutors. (Remember: Matsuno was the first to be fired by Kishida when this story first broke). Does not portend well. I expect two different, lower-level Diet Member arrests to be announced today/tomorrow. We will continue following these developments in the upcoming Japanese Politics updates.
  • Similarly, on Thursday/Friday Prosecutors questioned Hakubun Shimomura (69 y0, 9x, LH Tokyo, Abe), former Education Minister under Abe, initially main Faction leader until ousted by his remaining 5 ‘colleagues’ (due, it was said, to his Unification Church connections). Shimomura is a particularly interesting figure here since he truly has an ax to grind. One cannot help wondering how this obscure Professor in Kobe was able to come-up so surgically with a criminal-complaint about the kick-back scheme without some inside help.
  • On Friday, investigators also questioned Toshihiro Nikai (84 yo, 13x, LH Wakayama, Nikai), though he is in bad health. Leading the 5th largest LDP faction (38 Members) though spotlighted by the Prosecutors indicates his deeper involvement likely during the many years he was Secretary General of the LDP under Abe. One suspects lots of skeletons in lots of closets during that tumultuous period.
  • Sankei Newspaper is at the vanguard of suggesting now that it appears that former PM Yoshiro Mori (retired: 87 yo, 10x, LH Ishikawa, Abe) was behind this entire scheme from the beginning. Evidence is building on this theory (Sankei Newspaper was Mori’s first job after graduating Waseda). In any event, he has retired from politics, was considered unscrupulous for decades (Recruit Scandal, 2020 Olympics Chairman, etc.), lives in assisted housing, and therefore a convenient figure to throw under the LDP bus. This theme will build-up in coming days.
  • There is a 5-year Statute of Limitations on tax fraud so the damages and the investigation are somewhat capped. Most acknowledge this has been on-going for at least 10 years, though. But in any event, the Prosecutors are motivated for their own reasons, somewhat egged-on by PM Kishida who seeks distance from them by offering something juicier, somewhat self-propelled due to their own animosity towards former PM Abe. For example, Kishida arranged to start the 2024 Diet Session on the last day feasible-for-his-purposes, 01/26… thereby giving them the maximum amount of time before parliamentary immunity for Members of the Diet kicks-in… for 150 days.
  • Seiwa-kai (Abe Faction) and Shisui-kai (Nikai Faction) have been the main investigative focus so far, but the scope and breadth are just so massive. Simply consider the number of Prosecutors necessary: among the 6 Factions that make-up the LDP (259/465 LH + 118/248 UH: 377/713 total Members), 99 belong to the Abe Faction (#1), 38 belong to the Nikai Faction (#5). And there are THREE OTHER FACTIONS not getting the same degree of ‘affection’. Prosecutors from across the nation have been flown-in to Tokyo for this. Five factions have been identified as violators, with Abe Faction in the lead by far, likely as the initiator of the scheme in the first place. Toshihiro Nikai as the Secretary General of the LDP throughout the entire Abe Administration, also perennially criticized for questionable morals, is an attractive target.

Opposition parties to collaborate in the upcoming Diet session

  • Before the year closed out, the Parliamentary Affairs Chiefs of the 5 major opposition parties (CDP, Ishin, DPP, JCP, Reiwa) agreed to collaborate in the upcoming Diet Session. This  somewhat guarantees that there will be fireworks. The central purpose of the winter Diet Session is passing the Budget, which MUST be done by the last day of March. Considering the late Diet start, the lingering Unification Church hangover, the largest national budget under consideration (and importantly the defense budget, not to mention the unaddressed issue of “how are we going to pay for this again?”), and now this Kickback Scandal, the Kishida Administration will truly have its hands full: only ~2 months 1/26 ~ 3/31. Lots can happen.

External affairs

  • The Supreme Court of S. Korea upholds a lower court decision determining Hitachi Zosen & Mitsubishi Heavy Industries liable for payments to forced-labor during the colonial period. This fight has been ongoing for many years. The holding now says these companies cannot enjoy the kind of sovereign immunity nor ‘it was dealt with under the treaty of peace’ arguments available to the nation of Japan. This will once again inflame Japan-S. Korean relations and make the tender job of ruling the country that much more difficult for President Suk Yeol Yoon. Other Japanese entities will be pursued and more law suits are anticipated. A regrettable situation all around.
  • Korean opposition leader Lee Jae Myung suffered a knife attack this week by a man who lunged successfully at Lee, slicing through his neck. Lee lost to Yoon in a very tight race to become President two years ago. Consequently, the upcoming April parliamentary elections are critical to the country. The trilateral relationship with Japan/S. Korea/USA is of such looming importance that this incident indicates there will be several layers to the unfolding conflict. Lee is recuperating.
  • Separately, N. Korea fired 200 artillery rounds into the sea facing (though not violating) S. Korea’s EEZ. This was in a protest to the provocations it perceives from significant US/S. Korea joint military exercises ongoing now (and following months of increased animosity). S. Korea fired more than 400 artillery rounds in response, though not breaching their neighbor’s EEZ. This escalation is inching-up every week without any cooling.
  • It became clear this week that armaments used by the Russians in Ukraine, particularly artillery and missiles, emanate from N. Korea, probably irritating China but helping N. Korea with their satellite and ICBM delivery technology (from Russia).
  • In a surprising development, N. Korea supreme leader Kim Jung Un sent condolences to PM Kishida for the suffering triggered by the New Year’s Day earthquake in Ishikawa. Though the PM received numerous similar messages from other global leaders, this is a first from Kim to any PM since PM Koizumi.

Price increases in 2023

  • In our Japanese politics updates throughout the year, we have reported this but this week the Consumer Affairs Agency reported that, collectively in 2023, thirty-thousand food items increased in prices: 27% higher than in 2022. Initially, you might remember that this began in February with price increases directed mainly at frozen items, but overall impacting 5,000 items. Then in April, another wave of 5,000 items, these including mostly egg-based foods. October saw another wave of ~5,000. In just the November/December timeframe, amazingly 140,000 items increased in price. This is one of the reasons the CPI far exceeds any increases gained in salaries throughout the year. It is a singular objective of PM Kishida to force Corporate Japan to increase wages significantly (because the LDP’s 10-year drive to maintain inflation at 2% has been so far a failure). This move on wages will naturally impact the inflation rate (and possibly not generate the hoped-for effect!). However, Kishida is in an increasingly tight spot with fewer and fewer voters appreciating anything he has done economically, even though he receives high marks diplomatically and, to a lesser degree, geopolitically.

Automobile industry news

  • In a shocking development, the government has shut-down Daihatsu Motors from all production as it investigates the last 10 years of submitted data on airbag safety. This is astounding as Daihatsu is basically the Toyota Motor Company arm responsible for small car production. With 6 plants throughout the nation, 9,000 employees, 8,000 supplier-companies, completely shutting-down production is an extreme punishment, indicating a vengeance being felt by the government for the doctored document scheme. Daihatsu produced 830,000 units in 2023, accounting for ~4% of Toyota sales globally. The shutdown will likely continue until the end of January at least. Since automobile and auto parts in Japan are the undisputed cornerstone of the economy (see my YouTube video “Current State of Japan’s Automotive Industry”, December 2023, 26 minutes at @langleyesquire), one wonders how deeply and lengthy this will be allowed to stand. One senses there must be something else going on in the background.

Questions Poised during the 152nd session of Japanese Politics One-on-One

  • I remember during the triple-disaster of 3/11, the GOJ reaction was slow and uncoordinated. I also saw what happened in New Orleans when the hurricane disaster struck there, and the coordinated reaction from FEMA. Shouldn’t the GOJ use hovercraft and accept the offers-of-assistance pouring in from other countries particularly in the first few days? Couldn’t more have been done? Will PM Kishida approval rate rise or fall as a result? And by the way, how come we have not received an updated poll on public-sentiment these last 2 weeks?
  • I am curious about your take on the Prosecutors’ focus on Nishimura. Can you explain in more detail his involvement and prominence? Why did they choose to approach him last? And you mentioned two individuals in the Diet who will be arrested (did you say today?!?): Who?
  • I hope you don’t mind but these condolences from N. Korea leader Kim: I don’t trust him or his country and I place no weight on it. How do you think Japan should respond? I think it is a ploy. What is your view? Through what channels did it come to the PM?
  • I am curious about “after Kishida”: do you think the next administration will utilize public funds to achieve some of the lofty goals PM Kishida has touted (but has not quite identified how it will all be paid for), or perhaps take the step Kishida has avoided by increasing taxes, or coming up with some other method to secure LDP longevity?
  • One needs to look at the quiet and subterranean tactics being employed by the government to enhance the tax base (without actually revealing there is a ‘tax increase’). For example, the tax deduction for medicines and healthcare, quietly removed at the end of 2023, or this new rule on issuing receipts with individualized numbers to certify compliance (and thereby capturing the cash-based underground economy, Freeters, handymen journeyers, etc.). There is a LOT going on under everyone’s radar and, to make matters worse, there does not seem to be a reputable public service vehicle (like the Press or Twitter or an active blog-space) that is attempting to reveal or educate the public.
  • Getting back to Daihatsu. If you don’t mind, how come this scandal with Daihatsu gets so little press but Big Motors is STILL in the news? Also, almost every day, there are new stories on the filthy tricks they have been playing on consumers. Why the distinction? I would like your take on this.
  • Toyota Motors is pursuing this ‘digital city’ concept. Can you delve into this a bit?Auto-technology seems to be transitioning not just from internal-combustion to electric-vehicle, but the entire lexicon of the automobile industry is in transition, too. Toyota c is converting their former production site on the Mt. Fuji foothills into a living digital city, involving dozens of high-end Japanese companies. What is your take on this?