The Wages of Spring | This Week in Japanese Politics
Wage talks deliver a win for Kishida, but the kickback scandal continues and the LDP’s right wing mobilizes. Plus: tensions surrounding US military activities in Okinawa.
The Upper House’s Deliberative Council on Political Ethics held its own hearing on the kickback scandal, which remains a drag on Prime Minister Kishida Fumio’s support. Snap election talk is, nevertheless, growing, particularly after employers largely met organized labor’s demands in the spring wage negotiations – which will also strongly influence the Bank of Japan’s decision-making in the coming weeks. Meanwhile, the LDP and Kōmeitō reach an agreement on arms exports and Japanese government officials are facing public dissatisfaction in Okinawa over US military activities. Plus: President Joe Biden’s opposition to Nippon Steel’s bid for US Steel could make things awkward when Kishida visits in April.
Politics
The House of Councillors’ Deliberative Council on Political Ethics met on Thursday, 14 March, with testimony from former LDP upper house secretary-general Sekō Hiroshige the main attraction. In the hearing, Sekō denied having any knowledge of the origins of the system or the decision to restart the kickback scheme following Abe Shinzō’s assassination in July 2022.
There are few hints as to how Prime Minister Kishida Fumio intends to punish the 82 LDP members who failed to report the kickbacks they received from their factions. The consensus is that faction leaders should bear more of the responsibility, but, since the ranks of faction leaders includes Kishida himself, it is by no means a straightforward solution. The LDP’s rules include a range of options, but finding the appropriate punishments for different party members is incredibly fraught, not least because too lenient a punishment could invite public criticism (including from LDP supporters) and too harsh a punishment could increase discord within the parliamentary party. NHK’s latest poll found that 75% of respondents say that lawmakers connected with the kickback schemes should be punished.
The NHK poll found that the public is generally dissatisfied with how Kishida and the LDP have handled the scandal. 84% think that the LDP has entirely (50%) or somewhat (34%) failed to discharge its responsibility to explain its wrongdoing in the lower house ethics council hearings. The public was divided on Kishida’s appearance, with 47% (18% strongly/29% somewhat) disapproving and 45% (5% strongly, 40% somewhat) approving of his testimony. The LDP’s support dipped below 30% for only the second time since December 2012, to 28.6% -- but the other time it fell below 30% was in December 2023. However, support for both the CDP and Ishin no Kai remains in the single digits.
The Liberal Democratic Party (LDP) and Constitutional Democratic Party (CDP) agreed that Shimomura Hakubun, a veteran of the Abe faction’s secretariat, will testify before the House of Representatives political ethics council on 18 March to clear up some of the questions about the faction’s fundraising practices. The Liberal Democratic Party (LDP) was less than eager for him to testify. Constitutional Democratic Party (CDP) leader Izumi Kenta accused the LDP of “hiding” Shimomura.
Kōno Tarō, eyeing another bid for the LDP’s leadership, has been quietly criticizing the delay in dispensing punishments to Abe faction lawmakers and other party members for their transgressions. But he may be struggling to satisfy the clashing interests of his two patrons, his faction boss Asō Tarō and his fellow Kanagawan Suga Yoshihide. In trying to line up the support of the former and his colleagues in the faction, he may be prompting the latter to take a more distant approach.
Kōmeitō officials weighed in on the outlook for a snap election, suggesting that an autumn snap election, following the LDP’s leadership election (from which a new leader might emerge), could be optimal, although they did not rule out the possibility of a snap election following the end of the ordinary session of the Diet in June. But Kōmeitō leader Yamaguchi Natsuo wants no snap election until the LDP has made some progress in restoring public trust. Opposition parties are nevertheless bracing for a snap election during the first half of the year.
Ishin no Kai, however, continues to view the next general election as an opportunity for the party to supplant the CDP as the leading opposition party even as it aims to break the ruling coalition’s majority. It remains to be seen whether Ishin can pursue this strategy without simply dividing the non-LDP vote and enabling the ruling coalition to prevail again. The two opposition parties are, however, discussing a joint proposal for political reform.
In a television appearance on 13 March, Takaichi Sanae, the right-wing lawmaker who ran a surprisingly strong campaign in the 2021 LDP leadership election, reiterated her intention to run in this year’s leadership contest.
Beyond Takaichi’s own efforts, conservative lawmakers in the LDP have begun forming parliamentary leagues addressing a variety of issues with the aim of defending Abe’s policy legacy and organizing conservatives in the LDP leadership election, a sign that in the – perhaps temporary – absence of factions, this year’s leadership election could be dominated by other organizations and affiliations.
Kishida strongly condemned LDP members who hired strippers to perform following a meeting of the Kinki regional bloc of the party’s youth division, calling it entirely at odds with his cabinet’s values.
The Sapporo High Court upheld a lower court ruling that laws against recognizing same-sex marriage are unconstitutional, violating Article 14 and Article 24 of the Constitution. The ruling will in all likelihood be appealed to the Supreme Court, but, in the meantime, may make the question of same-sex marriage a more salient political issue in a year that will feature an LDP leadership election and possibly a general election. Kishida was asked about the decision in the Diet on 15 March, where he reiterated the government’s position that the Constitution does not anticipate marriages in which the partners are the same sex, and that the absence of a law allowing same-sex marriage is not unconstitutional.
Economics
The first round of replies from employers in the 2024 shuntō, the spring wage negotiations between large employers and unions, were delivered on Wednesday, 13 March. More than 80% of employers accepted the full wage increase demanded by their unions; the average request was a 5.85% increase. Some employers exceeded union demands. The results could influence the timing of a Bank of Japan (BOJ) decision to end its negative interest rate policy (see below) and are an indispensable political victory for the prime minister. That said, the impact of the wage increases will depend on the extent to which employers increase base pay, which benefit workers across the board and tend to boost consumption more than seniority-linked increases.1
Kishida met with business and labor leaders on 13 March, where he expressed his satisfaction with the results of negotiations and indicated that he wanted to accelerate the pace of minimum wage increases. The Kishida government’s incomes policies have built upon the Abe government’s interventions in wage-setting, since, in addition to convening the tripartite council to apply pressure, the government has expanded both the carrots and sticks used to secure wage increases. In the case of the former, it is offering more tax relief in exchange for pay increases; in the case of the latter, it has deployed the Fair Trade Commission (FTC) to crack down on big business underpaying subcontractors, enabling the latter to raise wages as well. It has also used official price-setting – for medical services, public works pay scales, shipping rates, etc. – to increase pressure on employers to raise incomes. It may not be clear until later this year whether these policies will truly raise real household incomes.
Immediately following the wage announcements, reports emerged that the BOJ has begun preparing for ending its negative interest rate policy. Jiji Press suggests that the bank could be considering a broader change, including the end of yield curve control, although it is unclear what the timeline for the latter change would be. There is reason to think that BOJ Governor Ueda Kazuo will still move cautiously. In a Nikkei survey of 28 BOJ watchers conducted earlier in March, before the results of the shuntō, only eight predicted that the BOJ would announce a policy change this month.
Finance Minister Suzuki Shunichi, in his press conference following a cabinet meeting on Friday, 15 March, echoed other officials and said that while Japan is not currently in deflation, he cannot say that there is no prospect of backsliding.
Foreign and security policy
The LDP and Kōmeitō announced on 15 March that they had reached an agreement on relaxing arms export rules. The final agreement reflects the results of talks between Kishida and Kōmeitō leader Yamaguchi Natsuo on 12 March, in which the two leaders effectively agreed that a formal cabinet decision would be necessary before the next-generation fighter developed jointly by Japan, the United Kingdom, and Italy could be exported to third countries. The coalition agreement is limited to the joint fighter; exports can only go to countries with which Japan has existing agreements regarding the transfer of defense equipment; and exports will not be permitted to countries where combat is taking place. Both parties will now have to approve the agreement, after which it will submitted to the cabinet for approval.
US President Joe Biden directly expressed his opposition to Nippon Steel’s bid for US Steel, as he bids for the support of United Steelworkers, who have voiced their concerns about the sale of the Pennsylvania-headquartered US Steel to a foreign company. Biden took this stance even as Japan has become the largest provider of foreign-direct investment to the US, US Steel has no contracts with the US Department of Defense, and the Biden administration has stressed the importance of closer ties with allies. It also comes weeks before Prime Minister Kishida will arrive in the US on a state visit, though there is little that his government can say publicly regarding the sale.
The USS Rafael Peralta, an Arleigh Burke-class destroyer, made a stop at the civilian port of Ishigaki in Okinawa prefecture, the first such stop by this class of warship in the prefecture, notwithstanding efforts by the Foreign Ministry and US Forces Japan (USFJ) to discourage the use of Okinawa’s civilian ports in peacetime. The stop was greeted by protestors and official complaints.
Meanwhile, USFJ resumed V-22 Osprey flights in Japan on Thursday, 14 March. Osprey flights had been halted worldwide in December 2023 following the crash of an Osprey flying from Marine Corps Air Station Iwakuni to Kadena Air Force Base in Okinawa. Okinawa Governor Tamaki Denny criticized the decision to restart Osprey flights, citing the lack of transparency regarding the cause of the crash. Defense Minister Kihara Minoru, announcing the decision on 9 March, cited the quality of the investigation on the cause of the crash but added that the report could not be made public; Kihara nevertheless expressed a desire to “carefully explain” the decision to local communities.
Akane Tomoko, a former public prosecutor and a judge at the International Criminal Court (ICC) since 2018, was elected to a three-year term as the ICC’s president, making her the first Japanese president of the court.
Further reading
A Nikkei Shimbun article suggests that the Japanese political system has transitioned from the “one strong, many weak” system of the Abe years to the “one despised, many weak” system in the wake of the kickback scandal, and identifies structural reasons for the opposition’s struggles.
The Mainichi Shimbun discusses how the kickback scandal has led some to call for a taxpayers boycott, arguing that if politicians can avoid reporting income and not paying taxes on it, they should do so too.
A note in the Sankei Shimbun discusses Donald Trump’s use of “madman theory” to conceal his reluctance to wage war, at least on behalf of allies – something that Abe Shinzō feared.
In the Financial Times, Kana Inagaki and Robin Harding discuss what could happen after the BOJ ends negative interest rates.
The Nikkei Shimbun also published an explainer on what ending negative interest rates could mean for Japanese households.
The Asahi Shimbun looks back at the history of its polling on foreign laborers in Japan.
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