Japanese Politics Updates – August 3, 2025

Reporting from the deck of Gryms in Misaki Port, Episode #234 captured a pivotal week in Japan’s political, economic, and security landscape. With a typhoon, earthquake, and the Trump Tariff colliding with record-breaking heat and an LDP election defeat, Japan is stretched thin across every axis. This week’s Briefing unraveled the pressure points and dissected the fault lines shaping Japan’s immediate future.

Today’s Headlines

• The yen-dollar exchange rate and its political implications;
• Prime Minister Ishiba’s diplomatic engagements and strategic restraint;
• Moriyama’s possible resignation, Koizumi’s reemergence, and why Ishiba still remains for now;
• The economic impact of Trump’s 15% tariff, inflation trends, and stimulus speculation;
• Japan’s record-breaking heat, agricultural fallout, and looming typhoon risks;
• Expo 2025 Osaka: progress, country performance, and tourism outcomes;
• A submarine bribery scandal, NATO alignment, and Japan’s shifting military posture;
• Final court rulings in the Dentsu Olympic bid-rigging scandal and public reaction;
• A string of violent crimes and the evolving profile of criminal activity in Japan;
• Foreigners and crime: fact vs. perception, and the projected path to 10% foreign population by 2040;

The Yen: Stability or Stall?

The yen closed Friday at $/¥ 148.10, barely changed despite a week of economic and political upheaval. Markets appear to have priced in the Trump Tariff and the LDP’s electoral loss, signaling a wait-and-see posture. Intervention is unlikely unless the yen breaches $/¥ 150, but confidence is fragile. The BOJ remains cautious, while the Cabinet faces increasing scrutiny over economic drift.

Diplomacy: Regional Coordination Under Pressure

Last week, Prime Minister Ishiba met with Czech President Petr Pavel and received South Korean FM Cho Tae-yul, signaling quiet efforts to stabilize Japan’s position regionally. With the ASEAN climate-energy dialogue and India-Japan defense talks upcoming, Japan’s diplomatic machine continues but mostly without the Prime Minister himself traveling. Ishiba’s strategy is one of containment and control during domestic fragility.

Domestic Politics: Moriyama’s Exit and Ishiba’s Breathing Room

The LDP’s General Council Chair Moriyama Hiroshi declared a 10-day reflection period, effectively signaling his departure. As the #2 position in the party, his exit destabilizes internal control. Koizumi Shinjiro has been floated as a successor, but lacks factional depth and senior backing. For now, Ishiba remains not due to strength, but logistical necessity. The Diet is out of session, and August is packed with diplomatic duties: the African Development Summit, Hiroshima and Nagasaki memorials, and End-of-War ceremonies. The cost of removing Ishiba prematurely may exceed the benefit.

Economy: Tariff Shock and Rising Heat

The 15% Trump Tariff took effect, hitting exporters hard and igniting new inflation fears. The government is floating stimulus trial balloons and even a possible sales tax cut, but confidence is eroding. Meanwhile, Japan endured its hottest day in recorded history: 41.3°C. Crop yields, dairy feed, and fish logistics are disrupted. And typhoon season is only just beginning. The climate is now a central economic variable.

Expo 2025 Osaka: Showcase or Shortfall?

The Expo passed 5 million visitors, but remains short of pace to meet the 28 million target. Highlights include strong pavilions from Ireland and Poland. Visitors are coming mostly from South Korea, Taiwan, and India. Osaka is seeing a tourism bump, but the Expo risks becoming a cultural celebration rather than an economic pivot. Its trajectory will be determined in the next six weeks.

Defense & Security: Scandal, Expansion, and NATO Linkage

The submarine scandal involving Kawasaki Heavy and Maritime SDF officers has exposed procurement vulnerabilities. The Hardy Barracks Joint Task Force is now operational, marking a new level of U.S.–Japan tactical coordination. Defense Minister Gen Nakatani approved the first SDF pay hike in 14 years to reverse recruitment declines. Internationally, Japan has launched a NATO-Japan Defense Industry Dialogue and expressed interest in training Ukraine’s forces under NSATU. Although Japan is not abandoning pacifism it is retooling it under pressure.

Olympic Bid-Rigging: Dentsu Walks Away Lightly

The Tokyo High Court upheld Dentsu’s ¥300 million fine for its role in rigging Olympic bids. No jail time. No high-level resignations. Seven years after the scandal, public frustration lingers. By international standards, the penalty feels symbolic. Accountability remains elusive.

Crime: Violence, Executions, and Societal Stress

Three random stabbings dominated headlines. Though statistically rare, they inflame public anxiety. Japan remains one of the safest countries in the world, but cybercrime, fraud, and white-collar offenses are increasing. The execution of the ‘Twitter Killer’ reminded citizens of Japan’s capital punishment stance, while slow trials and corporate leniency contribute to a sense of systemic softness.

Foreigners & Crime: Perception vs. Reality

Crime by foreigners remains statistically low. Traffic incidents are up—linked to distractions and unfamiliarity more than recklessness. Still, the media’s focus intensifies public misgivings. A government study forecasts that by 2040, foreigners will comprise 10% of the national population. Governors are calling for multicultural integration planning. Japan’s economy in farming, fishing, and healthcare already depends on foreign labor. Another demographic shift is coming—and Japan must prepare.

Questions from the audience

• Will Japanese Prime Minister Ishiba be able to hold on past August?
• How will Japan’s political landscape respond to the Trump Tariff in the short term?
• · Has president Trump ordered the deployment of submarines near the northern part of Japan?
• Will the LDP team up with Ishin?
• What are the purposes of the African Development Summit? What is Japan looking to support?

Final Thought

The past week was more than a confluence of storms. It was a stress test of Japan’s institutional resilience. Leadership is being questioned. Systems are being stretched. And society is being forced to confront uncomfortable truths about power, preparedness, and population. Whether Japan bends or breaks depends on how it responds in the next 90 days. This clock is ticking.