Japanese Politics Updates – May 25, 2025

Weekly Briefing Episode #224
Broadcast Date: May 25, 2025
Location: Aboard Gryms, Katsuyama Port

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Opening Highlights:

• Episode #224 is broadcast from the inside cabin of Gryms, thanks to new equipment donated by Captain Evan Burkosky.
• The yen strengthened over the week to close at ¥142.58, reacting to macroeconomic news and speculation about Fed interest-rate cuts.
• Prime Minister Ishiba remained in Tokyo all last week, hosting dignitaries visiting Japan for Expo-related events… same this upcoming week, too.
• A series of high-level diplomatic meetings, a Cabinet resignation, and an expanding defense industry are among today’s highlights.

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Main Issues This Week

1. Diplomatic Visits and Expo Activity 

Japan’s hosting of the World Expo continues to attract an impressive lineup of foreign leaders. Last week alone saw visits (none of which were State Visits) from:

• King Frederik X of Denmark;
• President Alexander Van der Bellen of Austria;
• President Tomas Sulyok of Hungary;
• President Santiago Peña of Paraguay;
• King Willem-Alexander of the Netherlands (who dined with the Emperor);
• Prime Minister Milojko Spajić of Montenegro (arriving Sunday).

These visits reflect Japan’s strategic use of the Expo as a diplomatic magnet. Despite none being official State Visits, they featured significant exchanges, high-foluting hospitality and trade/commerce communications with attending businessmen delegations.

2. US-Japan Tariff Negotiations and G7 Finance Ministers Meeting

• Chief tariff negotiator Ryosei Akazawa departed yesterday for Washington to continue talks on the Trump tariffs. I anticipate these will drag-on until the end of the pause: July 9.
• Treasury Secretary Scott Besset met with Finance Minister Kato in Alberta at the G7 finance ministers and central bankers’ meeting, but he will be unavailable while Minister Akazawa is in D.C. this Memorial week (Monday is a National Holiday in America).
• President Trump and Prime Minister Ishiba held a 40-minute phone call to tee up their planned meeting at the G7 summit in June, discuss US Steel, and lay some ground for Minister Akazawa’s trip. This call was at the President’s initiation.

3. Defense Expansion and DSEI Japan 2025

• Japan hosted its largest-ever defense industry showcase, DSEI Japan 2025, out in Makuhari.
• Over 14,000 visitors attended, including 500 VIPs and 167 Japanese companies (double the previous number).
• The event signals Japan’s accelerating pivot into the defense export market, with key technologies for drones, missiles, and co-produced fighter jets on display.
• Langley Esquire published 10 days ago a policy analysis on Japan’s evolving military-industrial complex, includes Article 9 implications. Please see: https://langleyesquire.com/japan-pursues-a-military-industrial-policy/

4. Domestic Political Developments

• Agriculture Minister Taku Eto resigned after a tone-deaf remark about rice prices and availability (which he has no trouble with) which triggered immediate public outcry.
• Kōizumi Shinjirō replaced him, drawing attention to his rising political profile.
• The Tokyo Metropolitan Assembly election (June 22) will be a major bellwether ahead of the Upper House race, and this cannot be viewed in the absence of the Koizumi appointment and the approaching UH elections.
• 280 candidates are vying for 127 seats; a fiercely contested race is expected. This is the largest number of candidates in history, so distinctly something is afoot.

5. Pension Reform and Legislative Tensions

• Pension reform legislation has cleared the LDP Policy Board and entered Diet deliberations.
• With only ~20 working days left in the session, the opposition CDP is threatening a no-confidence motion if its demands are not addressed.
• Speculation is growing that the LDP may seek a coalition with the Democratic Party for the People (DPFP) after the summer election, as it currently lacks a functioning Lower House majority.
• Langley Esquire published just days ago the following policy-analysis in fact. Please see: https://langleyesquire.com/fiscal-reform-and-the-consumption-tax-showdown/

6. Looming Leadership Change?

• It is anticipated that the LDP may switch Presidency after the Upper House election.
• A year-long LDP ban imposed upon those Members who were implicated in the skimming-scandal has ended. Now, these Seiwakai faction members may re-enter the fray when there is a race for LDP President (which they were excluded from in the last round when Ishiba won eventually).
• Potential leadership contenders include Shinjiro Kōizumi, Sanai Takaichi, Taro Kono, maybe even Yasutoshi Nishimura, even Koichi Hagiura!

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Q&A Highlights:

• WHO Withdrawal: with the US expected to leave the World Health Organization, what do you think: will Japan follow the US lead, especially under pressure from Health Minister Robert Kennedy Jr.’s “Make America Healthy Again” campaign?
• Nippon Steel/US Steel Deal: Trump endorsed it as a “partnership,” not an acquisition. Seen as part of broader Japan-US industrial collaboration. Any insight you can share?
• Oil Security: Japan imports nearly all its oil but has investments in LNG fields (e.g., Sakhalin) and is targeting 30% self-sufficiency by 2035. How can Japan further establish self-sufficiency in energy, particularly in petroleum?
• Defense vs. Civil Liberties: Concerns raised over Article 9 erosion and whether Japan’s rearmament could endanger their citizen’s civil rights. Most citizens support the Peace Constitution and, although worry about regional threats, similarly worry about US insistence on 2% and maybe even 3% GDP devoted to military expenditures, the expanding push for exporting military equiptment, the tremendous surge of other countries’ militaries (Britian, France, Australia, Italy, Philippines, etc.) forming joint maneuvers with Japan’s SDF.
• Article 9 Amendment: The LDP is committed to revising Article 9. This could restore a more prominent symbolic role for the Emperor, echoing pre-war traditions and launch a tremendous and deep shift in the world’s 3rd (4th, now?) largest economy.

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Final Thoughts

DSEI Japan 2025 was a milestone, showcasing Japan’s growing confidence and technological depth in the defense sector. The timing – with tariff talks intensifying, pension reform on a knife’s edge, and political leadership in flux – reflects a nation balancing global ambition with domestic fragility.