Japanese Politics Updates – July 6, 2025

Weekly Briefing Synopsis – Episode #230
Broadcast: Sunday, July 6, 2025
Location: Anchored off Ishiki Beach, Hayama

Good morning from just offshore Hayama, where Gryms is gently anchored off Ishiki Beach — a scenic and unusually calm setting for this week’s political update. The Emperor’s summer villa looms behind the beach huts and sunbathers ashore. Despite an embarrassing lapse in my report on the yen, the rest of the briefing delivered sharp, forward-looking analysis of Japan’s domestic and geopolitical climate. We examined strategic dilemmas within the ruling coalition, stalled tariff negotiations, scattered high-level diplomatic activity, and mounting pressure surrounding the upcoming elections. The tone was sober, analytic, and at times blunt — befitting the moment.

Summary Highlights

• Yen narrative corrected – Contrary to last week’s report, the yen did not breach the ¥160 level two weeks ago. The Friday rate was not a dramatic strengthening. In fact, the currency held steadier than reported. Full clarification below.

• Diplomatic Calendar – Ireland’s PM Micheál Martin visited Tokyo on July 2, to dine with the PM over cyber, green energy and regional security, but also to open the new Ireland House (Embassy, Ambassador’s Residence, trade & investment offices) in Yotsuya. US Secretary of State Rubio’s visit was cancelled as was the 2+2 — a clear sign that Washington’s attention is fixed elsewhere. Tokyo missed an opening.

• Ishiba’s Agenda – Wage hikes, Expo 2025, and a campaign kickoff in Kobe. The unpopular ¥20,000 cash handout hit Ishiba’s approval ratings hard — now ~34%.

• Upper House Campaign – Officially launched on Thursday. Sanseito is running nationwide and gaining momentum. LDP/Komeito aiming for 50 seats may be overly optimistic. Bunshun predicts coalition losses.

• South Korea’s Rightward Shift – A new conservative government could bolster trilateral defense coordination with Japan and the U.S., and put additional pressure on China.

• Tariff Deadline: July 9 – Trump says “No extension.” Tariffs on autos and rice loom large. Quiet diplomacy by Minister Akazawa continues — outcome uncertain.

• Rice Crisis – Domestic rice prices are up 70% YoY. Tokyo reverses course to increase supply. U.S. pressure to open markets continues. Ishiba says he will not bend on autos or rice.

• Japan-U.S. Defense Intimacy – Strategic joint planning intensifies, especially in southwestern Japan. Yet, all major visits — Rubio, Vance, 2+2 — were cancelled or postponed.

• Imperial Diplomacy – The Emperor and Empress visited Okinawa and Mongolia, bringing grace and a moral counterweight to a hyper-partisan Diet.

• Opposition Still Fragmented – CDP, DDP, and Ishin are flailing. Sanseito’s rise is real. If Bunshun’s numbers are right, LDP could lose Upper House control.

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Full Commentary

Yen Volatility Correction

Contrary to my report last week, the yen 2 weeks ago did not break the ¥160 barrier — not even close. The actual closing rate as of Friday, July 4 was ¥144.47 to the dollar. That’s well within the normal bounds of market volatility, especially in a week shaped by strong U.S. labor data and anxiety over tariffs.

The error was mine, and I want to own it. I incorrectly suggested a dramatic, ¥10 swing — something historically rare and typically associated with major crises. In fact, the movement was closer to ¥2–3. We are not in crisis territory. But if the yen settles in the ¥150–153 range, expect closed-door conversations about coordinated intervention. My bad: I will be more careful going forward. 

Election Timing Still in Play

The LDP remains split. With PM Ishiba’s ratings softening, the appetite for a snap election has waned significantly, almost disappeared. Post-election rumblings are growing louder. If losses are steep, a leadership challenge may follow. But this is Japan — never count out the status quo, i.e., do nothing.

Ishiba’s Silent Strength

Despite declining support, PM Ishiba remains a potent figure — especially with rural and security-focused voters, and he handled the rice issue fairly well. He’s low-profile but stable. If push comes to shove, PM Ishiba is still seen as The Fallback.

South Korea’s Shift and Regional Posturing

The new progressive government in Seoul signals possible defense alignment with Japan and the U.S. This could impact joint missile defense, joint exercises, base coordination and inevitably relations with N.Korea. Tokyo is cautiously watching. Beijing is watching closely, too. Ditto for N.Korea, as you would expect.

Tariff Diplomacy and Domestic Vulnerability

The July 9 deadline is critical. Tokyo is navigating intense U.S. pressure while trying to limit economic fallout at home. Behind the scenes, Japanese negotiators are lobbying industry and think tanks in Washington and the mass media back home. It’s not just economics — it’s a credibility test for Japan as a global partner. It does not look like this will go Japan’s way, though.

Imperial Diplomacy as Soft Power

The Emperor and Empress visited Okinawa two weeks ago on the 80th memorial of the fall of Okinawa. This week is Mongolia. This trip underscores history and humanity at a moment of political gridlock in Nagatacho. Their presence provided a powerful contrast to the Diet’s theatrics. The Mongolia visit is a first by the Imperial family, so it carried particular weight given the painful WWII-era legacy.

Not well-known or discussed, more than half a million Japanese soldiers were abandoned in Manchuria, Korea and Mongolia (where Japan had been for 30+ years). The Soviet Union was in invasion-mode for Hokkaido, and all the captives were moved to Mongolia for years of slave labor. No Peace Treaty was ever signed (even today), and thus no end of hostilities. As a consequence, soldier repatriation took years, all the while 15 ~20% of the soldiers were dying due to stavation, disease, overwork. Mongolia benefitted from this as did the Soviet Union. One can perhaps understand the remaining bitterness and pain from that sad period of history. But that is precisely why the Emperor and the Empress visited… a trip 3 years in the planning.

Opposition: Fragmented and Drifting

Despite weak LDP numbers, the opposition remains unable to unite: CDP is splintered, Ishin-no-kai has not seized the Expo spotlight, DPP is adrift, Sanseito, however, is gaining — fielding candidates nationwide. Bunshun’s prediction that the ruling coalition may fail to secure 50 of the 125 seats is beginning to have a plausible feel to it.

Final Thoughts

This week’s developments revealed a Japan buffeted by global pressures but also strangely inert. The yen is shaky but not collapsing. Tariffs loom but remain uncertain. The election is heating up — but enthusiasm is low: pins and needles. Through it all, the Imperial family reminded us of continuity and dignity. If the LDP does stumble at the polls, it may not be the opposition that rises — but the narrative of a system in quiet disarray. We’ll be watching closely and reporting to you weekly.