Dominos to fall? | This Week in Japanese Politics
The kickback scandal induces the retirement of a major figure, the budget passes, and the US and Japan prepare a major announcement for April.
Ahead of the punishments for Liberal Democratic Party (LDP) figures implicated in the kickback scandal Prime Minister Kishida Fumio will announce next week, senior LDP lawmaker and faction boss Nikai Toshihiro said he would not seek reelection. The opposition parties continue to seek closer coordination, with some difficulty, and the Tokyo-15 by-election takes shape. The upper house passed the FY2024 budget – the second-largest budget ever – and the Kishida and his finance minister expressed their concerns about the yen, which reached a forty-four-year low against the dollar. Plus: questions about Kishida’s foreign policies.
Politics
Nikai Toshihiro, the faction boss and former LDP secretary-general who was an important pillar of the second Abe administration, announced on Monday, 25 March that he would not run in the next general election. The move preempts punishment he would likely receive from the LDP for his role in the party’s kickback scandal as the head of one of the factions implicated in the scandal. He may still receive a lesser punishment, but Nikai’s move frees Kishida to focus on the Abe faction’s leaders.
Ahead of a decision regarding punishments – which will likely be handed down next week and could be more severe than previously anticipated – Kishida confirmed this week that he and other senior party leaders have been questioning Abe faction leaders about the kickback scheme in closed-door interviews. In those interviews, one politician suggested that former prime minister and Abe faction boss Mori Yoshirō was involved in the decision to restart the kickback scheme in 2022, leading to renewed calls from opposition to summon Mori for questioning – and prompting Kishida to concede that it may be necessary to do so. LDP leaders are concerned, however, that calling Mori could be a lose-lose situation. If Mori does not reveal new information, the opposition could press for more hearings; if he does, it could lead prosecutors to seek additional indictments. Nevertheless, Kishida met with LDP secretary-general Motegi Toshimitsu and LDP vice president Asō Tarō on Friday, 29 March to discuss the punishment question.
There are still questions as to whether the prime minister will punish himself in some capacity. Kishida, asked about this in the Diet, said there is no precedent for a party leader punishing himself and that while his faction may have engaged in sloppy accounting, it did not distribute funds under the table to its members.
On 29 March the Democratic Party for the People (DPFP) submitted its own “trigger clause” bill to the upper house after talks with the Constitutional Democratic Party (CDP) as well as with the Ishin no Kai failed to produce a compromise. Izumi Kenta and Tamaki Yūichirō, leaders of the CDP and the DPFP had met on 25 March to discuss policy cooperation between their parties, including the lifting of the freeze on the gasoline tax “trigger clause,” a priority for the DPFP. Nevertheless, the opposition parties have continued to draw closer together in the wake of the LDP’s scandal, with limitations (see next item).
Ishin no Kai held its convention in Kyoto on Sunday, 24 March, where party leader Baba Nobuyuki announced that the party’s goal in the next general election will be to break the ruling coalition’s majority. The party, however, is in an uncomfortable position, reports Asahi, still vying with the CDP to become the largest opposition party, coordinating with the CDP and other opposition parties to attack the government over the kickback scandal, and flirting with the LDP as a possible coalition partner, particularly if Ishin’s fortunes sour. The setbacks and delays in the preparations for Expo 2025 in Osaka have taken the air out of what looked like a gathering boom last year.
In the 28 April by-election in the Tokyo-15 district, Tokyo Governor Koike Yuriko’s Tokyoites First Party (TFP) is preparing to nominate author and journalist Ototake Hirotada for the race, signaling an attempt by the governor’s local party to reenter national politics. The LDP, which has been unable to select a candidate and was reportedly at one point considering backing Koike herself for the seat, is debating whether to back Ototake, who ran an unsuccessful independent campaign for an upper house seat in Tokyo in 2022. The CDP, meanwhile, is preparing to nominate Sakai Natsumi, a thirty-seven-year-old midwife who previously ran and lost a campaign for mayor of Tokyo’s Koto Ward in December. The Japanese Communist Party (JCP) is considering withdrawing its candidate and supporting Sakai, but the field could still be crowded between Ototake, Sakai, and candidates from Ishin no Kai, the populist Sanseitō, and two independents.
With Nikai’s retirement, there is now debate over who should run for his seat in Wakayama prefecture. The difficulty is that the prefecture’s three seats are being reduced to two, further scrambling the outlook within the prefecture. Although Nikai has two sons in politics, at his press conference announcing his retirement he did not anoint a successor but said that his constituents should decide.
In a speech in Tokyo on Wednesday, 27 March, Kōmeitō leader Yamaguchi Natsuo again warned Kishida against calling a snap election when the government has not done enough to restore public trust in the ruling coalition He also warned against a calling a snap election to the coincide with upper house elections (and Tokyo assembly elections) in 2025, saying that doing so would spread his party’s resources too thinly. Kishida ruled out a snap election in parliamentary deliberations Thursday, but speculation that he could call a snap election as early as April remains rife.
With the passage of the budget (see below), the ordinary session of the Diet moves into its second half. The prime minister indicated that political reform legislation will be a major priority for the remainder of the legislative session.
Economics
The House of Councillors approved the FY2024 budget on Thursday, 28 March. The budget, totaling JPY 112.57tn (USD 744bn), is the second largest ever, JPY 1.80tn (USD 11.9bn) less than last year’s budget. Social security spending is roughly a third of the total; debt serving costs are expected to increase by JPY 1.76tn (USD 11.6bn) to JPY 27.9tn (USD 184.3bn). New debt issuance over the next year is expected to be JPY 29tn (USD 191.6bn). Social security spending and debt service constitute 57% of the total budget.
In his press conference marking the budget’s passage, Kishida used his opening remarks to celebrate his administration’s progress in combating deflation and boosting wages but stressed that his government has a “historic chance” to defeat deflation once and for all. Through his government’s incomes policies, he said, Japan can move from a cost-cutting economic system to a new growth-centered system.
At the press conference, Kishida was asked whether he felt that intervention to halt the yen’s decline – on Wednesday, 27 March, the yen fell to JPY 152 to the dollar, its lowest level since July 1990 – and while Kishida was careful not to speak specifically about the government’s plan, he communicated the government’s concerns about excessive movement in the exchange rate and said the government would not rule out any tool as it seeks an appropriate response. Finance Minister Suzuki Shunichi delivered a similar message at his press conference on Friday, 29 March, stating that the problem is not the level – “there is not a specific line of defense,” he said – but the movement. He suggested that part of the problem is speculative activity at odds with fundamentals.
In February employment data released by the Ministry of Internal Affairs and Communications on Friday, 29 March, unemployment rose 0.2% month-over-month to 2.6%, the first increase in unemployment since July 2023.
Foreign and security policy
The US and Japan are reportedly preparing to announce a significant change to the alliance’s command structure during the Kishida-Biden summit in April, giving more operational command functions to US Forces Japan (USFJ), enabling the US commander in Japan to engage in more operational planning with counterparts in Japan’s Self-Defense Forces (SDF). Asahi reports that there are some questions about what this change could mean for the Kishida government’s desire to retain independent command of Japanese forces in the event of a crisis.
In his press conference Thursday, Kishida stressed that his government would continue to pursue talks with North Korea, notwithstanding comments from Kim Yo Jong, sister of North Korean leader Kim Jong Un, that talks are impossible as long as Japan is focused on the abductee issue and nuclear weapons. Earlier in the week, Chief Cabinet Secretary Hayashi Yoshimasa rejected a statement from North Korean Kim Yo Jong that the abductee issue was already resolved.
Also in his press conference, Kishida was asked how his government was thinking about the “Moshi-tora” (i.e., the “if Trump returns”) question. The prime minister naturally ducked the question and said that regardless of election circumstances, it is necessary to clearly communicate to the world the importance of the US-Japan alliance.
Foreign Minister Kamikawa Yōko met with Philippe Lazzarini, Commissioner-General of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), in Tokyo on 28 March. The two discussed reform plans for the organization, as the Japanese government prepares to resume its contributions to UNRWA in April.
Further reading
The Nikkei Shimbun considers whether the “Aoki rule” – which says that an incumbent prime minister is in danger when the combined approval rating of the government and the ruling party falls below 50% – is still relevant.
Yamaguchi Hirohide, a former deputy governor of the Bank of Japan under Governor Shirakawa Masaaki, says in an interview with the Mainichi Shimbun that the Ueda BOJ has revealed the limits of monetary policy.
In its series on historic opinion polls, Asahi Shimbun looks at the “booms” enjoyed by new parties.
A study commissioned by the Yomiuri Shimbun warned that Japanese could be more vulnerable to online disinformation than people in other countries.
At FT Alphaville, Aiden Reiter considers the role that demographics have played and will play in Japan’s growth and price environment.
The right-wing tabloid Yūkan Fuji published a pessimistic account of Kishida’s foreign policy, noting that the drift in Kishida’s foreign policy could be due to the fact that although Kishida was foreign minister under Abe, “Abe was his own foreign minister.”
Meanwhile, the right-wing monthly Seiron published a short article criticizing what it views as Kishida’s empty promises on constitutional revision and taking issue with Kishida’s language in his LDP convention address, in which he characterized Japan as a “small country in the Far East” (instead of describing Japan as a global great power).
The Tokyo Shimbun has a lengthy essay on the current political environment that notes that if Kishida truly uproots the factions, it could lead to a stronger LDP president and prime minister.
In case you missed it, I wrote about what two polls last weekend revealed about Kishida’s approval ratings.
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