Japanese Politics Updates – December 29, 2024

Hello and welcome to the 203rd episode of Japanese Politics One-on-One! Here are the latest developments in Japanese politics:

• Yen at 157.87. Pressure is on Bank of Japan Governor Ueda to try and keep inflation down.
• The Health Ministry reports a huge surge in influenza cases nationwide.
• Osama Suzuki, CEO of Suzuki Motors, dies at 94 years old.
• Suicides and bankruptcies are up, a sign of long term economic woes.
• Party responsible for the DMM crypto hack identified by US and Japanese agencies: a N. Korea hacker group.
• JAL also suffered from what-is-reported-to-be a cybersecurity breach: maybe, maybe not.

Extraordinary Diet Session: Balancing Reforms, Budgets, and Political Shifts

The Japanese Diet this week concluded its Extraordinary 27-day Session, convened by the Cabinet for a limited purpose. This session followed the Lower House election, the reappointment of Prime Minister Ishiba, and discussions on passing a Supplementary Budget aimed at injecting funds into the economy. Here’s an overview of the key events and outcomes:

Key Legislative Developments:

Supplementary Budget: A 13.9 trillion yen ($91 billion) supplementary budget passed to stimulate economic stimulation. Funds will enter the economy before the fiscal year ends in March 2025.

Political Funding Reforms: Debates centered around banning unreported political activity funds, often seen as slush funds. While the opposition pushed for transparency, the ruling coalition (LDP and Komeito) resisted significant changes. They reached a compromise to revisit corporate and group donation issues in the next upcoming Session.

Tax-Free Income Threshold: The Democratic Party for the People (DPFP) campaigned to raise the tax-free income threshold from ¥1.03 million yen to ¥1.78 million yen. The coalition agreed to a smaller increase (¥1.21~1.23 million yen) with a commitment to address further changes later, again in the upcoming Session.

Opposition Party Bargains: Ishin-no-Kai pushed for free secondary and university education, which was deferred for future discussion in the, yes… upcoming Session.

The Constitutional Democratic Party secured additional funding for earthquake recovery in the Noto Peninsula.

Political Dynamics:

LDP’s Waning Power: For the first time in decades, the ruling coalition lacks a majority, forcing reliance on opposition parties. This shift has interjected more negotiation and compromise in the legislative processes. It is a sign of things to come. It is distinctly different from the past where the LDP/Komeito just called the shots.

Factional Tensions: Ethical issues surrounding unreported funds have implicated multiple lawmakers. While the Diet Ethics Committees continue to investigate, public prosecutors suddenly dropped charges against 65 politicians and their aides, citing insufficient evidence. This decision has drawn criticism. No surprise there.

Defense and Budget Highlights:

2025 Budget Proposal: The Cabinet approved a record 115.5 trillion yen ($735 billion) budget, reflecting increases in defense and social welfare spending. 

Defense Spending: 8.6 trillion yen includes allocations for long-range missiles, a satellite-constellation, the next-generation fighter project with Italy and the UK, and improvements for self-defense forces.

Regional Revitalization: 20 trillion yen support rural development, a priority for PM Ishiba.

Funding Challenges: To finance the budget, the Government will issue new government bonds covering nearly 25% of expenditures, raising concerns about fiscal sustainability (again).

This session highlighted Japan’s shifting political landscape, increasing demands for transparency, and ongoing efforts to address economic and social challenges.

Akie Abe visits President-Elect Trump at Mar-a-Lago

Akie Abe, the wife of former Prime Minister Shinzo Abe (RIP), visited Mar-a-Lago last week to meet with U.S. president-elect Trump. The two had dinner on Sunday night, during which they exchanged gifts and engaged in a cordial conversation. Akie Abe delivered a message to Japanese political figure Shigeru Ishiba, conveying the president-elect’s interest in meeting him.

Ishiba had previously attempted to arrange a meeting with the president-elect during the G20 summit in Brazil, but the plans fell through. With Japan’s National Diet set to convene on January 20 and the president-elect’s inauguration scheduled for January 24, the window for such a meeting is narrow. Speculation suggests that Ishiba may aim to meet with the president-elect before the inauguration.

A visit by Japan’s prime minister to Florida early in the new year is anticipated, but details remain unconfirmed. Further updates are expected as plans evolve.

Political Turmoil in South Korea

In South Korea, political turmoil is unfolding, with significant implications for its alliance with Japan and the United States, particularly given the critical nature of their trilateral relationship. President Yoon was impeached on December 3, leading the Prime Minister to temporarily assume presidential duties. However, as Acting President, he was also impeached just days later, further destabilizing the government.

The impeachment votes, held in South Korea’s single-house National Assembly of 300 members, were overseen by the Assembly Speaker. Out of 192 votes cast, all came from members of the opposition party, while others abstained. This intense political strife, highlighted by physical altercations in the Assembly, now moves to the Constitutional Court for review. The process could take up to 90 days to resolve.

The situation has left many South Koreans frustrated and angry with their government, as the uncertainty threatens to overshadow domestic and international priorities during this critical time.

Influenza cases surge

Influenza cases have spiked in Japan, with 1.6 million people seeking medical attention in clinics nationwide just last week alone. All 47 prefectures are experiencing a surge, with the highest incidences reported in Kyushu, particularly in Oita, Kagoshima, and Saga. A second wave is emerging in Chiba, Fukuoka, Aichi, and Yamanashi.

As New Year approaches, the situation may worsen due to clinic closures, limiting access to care. People are advised to take precautions, stay warm, and maintain hygiene to mitigate the spread of the virus.

Questions from the Audience Answered Exclusively During the Brieifng 

• In his interview with Yomiuri, Ishiba hinted at the possibility of dissolving the Lower House if there were a no-confidence motion proposed in the upcoming Session. This of course would precipitate a combined Upper and Lower House election. What is going on here… is this a threat to make Lower House Members reluctant to support a no-confidence motion or is there something else going on?
• Until the next session begins where will politicians go and what will they be doing, what should we pay attention to?
• What are the main goals for the proposed Amendment of the Immigration Control Act?
• Do you have any insights on Japan’s pension reforms and how it could change the way that trillions of yen are invested?