Photo : The Japan Times

Japan to conduct Air defence drill with Germany, France and Spain

East Asia & The Pacific Reader | 28 June 2024, Wednesday | Vol.1 No. 117
Japanese yen reaches an all-time low compared to the dollar
On 27 June, Japan’s yen hit the lowest value compared to the dollar since 1986. In a press conference the Japanese Finance Minister, Shunichi Suzuki told the reporters that “Japan will take appropriate actions to defend its currency.” He added that “Sudden one-sided moves are not desirable. We are strongly concerned about its impact on the economy and will analyze the background to this move with a high sense of urgency.” The Japanese yen has reached 160.87 per dollar, the lowest compared to the exchange rates in the past. The yen traded at 160.45 per dollar in the mid-morning dealings in Tokyo. (Yoshiaki Nohara,” Japan’s Finance Minister Repeats Warnings After Yen Hits Lowest Since 1986,” Bloomberg, 27 June 2024)

East Asia & The Pacific Reader | 26 June 2024, Wednesday | Vol.1 No. 117
Japan to conduct Air defence drill with Germany, France and Spain
On 25 June, over 30 military aircraft from Germany, France, and Spain will conduct joint exercises with Japan's Air Self-Defense Force in July, marking their first trilateral air force deployment to the Indo-Pacific. This initiative is part of the Pacific Skies deployment and aims to enhance tactical skills and foster mutual understanding among participating nations. Japanese Defense Minister Minoru Kihara emphasised that these exercises: “not only improve the Self-Defense Forces' tactical skills but also deepen cooperation with other countries and help realize a free and open Indo-Pacific region.” The drills highlight growing defence ties between Japan and European partners driven by shared economic and security concerns. European nations are intensifying their engagement in the Indo-Pacific and recognising the region's strategic importance for global stability. These collaborations reflect a broader trend of aligning strategic interests between Japan and European countries, as both seek to address mounting challenges to the international order. (Gabriel Dominguez, “Japan to hold fighter jet drills with Germany, France, Spain in July,” The Japan Times, 25 June 2024)

East Asia & The Pacific Reader | 25 June 2024, Tuesday | Vol.1 No. 116
Japan sanctions global firms and Indian companies for aiding Russia
On 24 June, Japan imposed sanctions on multiple international companies, including a Bengaluru-based Indian tech firm, for allegedly assisting Russia in evading economic sanctions. The Japanese Foreign Ministry announced asset freezes and export bans against at least 10 companies from India, China, Kazakhstan, Uzbekistan, and the United Arab Emirates. These measures implemented under Japan's Foreign Exchange and Foreign Trade Act align with Prime Minister Fumio Kishida's recent statement at the G7 summit in Italy. Kishida had declared Japan's intention to sanction entities helping Russia evade economic restrictions. The move is part of a broader effort by Japan and its G7 allies to maintain pressure on Russia following its invasion of Ukraine. This action expands Japan's existing sanctions against Russian companies, reinforcing the international community's stance against the evasion of punitive measures. (“Japan sanctions Bengaluru-based tech firm for ‘helping’ Russia evade trade restrictions,” The Indian Express, 24 June 2024)

East Asia & The Pacific Reader | 21 June 2024, Friday | Vol.1 No. 113
Japan and New Zealand approve security agreement to exchange classified information 
On 20 June, Japanese Prime Minister Fumio Kishida and his New Zealand counterpart Christopher Luxon reached a substantive accord on an information security agreement, allowing for the sharing of classified data between their nations. The leaders, meeting in Tokyo, also agreed to advance discussions on a bilateral acquisition and cross-servicing agreement to facilitate military supply exchanges. Kishida expressed his expectation for enhanced security and defence ties, while Luxon emphasised collaboration on regional issues. Both leaders acknowledged the importance of communication with Australia and South Korea in promoting a free and open Indo-Pacific. The prime ministers agreed to cooperate on an upcoming Pacific island countries summit hosted by Japan. Additionally, Luxon announced two significant business developments where New Zealand's Fabrum will supply Toyota with its liquid hydrogen storage system, and Japan's Obayashi will acquire a 50 per cent stake in Eastland Generation for approximately NZD 500 million to support renewable energy operations. (Jiji, “Kishida and Luxon affirm information security pact,” The Japan Times, 20 June 2024)

East Asia & The Pacific Reader | 20 June 2024, Thursday | Vol.1 No. 112
Japanese companies oppose tariffs on Chinese imports, reports Reuters survey 
On 20 June, a Reuters survey revealed that most Japanese companies see no need for their government to impose tariffs on Chinese imports, similar to the US action. 61 per cent of respondents said there was no necessity for such measures, with 53 per cent stating that China's excessive production capacity had little to no impact on their business. One manager cautioned: “It could lead to an escalation in measures and countermeasures against each other and economic conditions will get worse.” Furthermore, only seven per cent of companies believed that Japanese Prime Minister Fumio Kishida's pledge to have wages consistently rise faster than inflation was attainable. Half deemed the goal unattainable, while 43 per cent found it difficult to assess. The survey also showed scepticism towards the government's tax relief measures aimed at stimulating consumer spending, with 69 per cent viewing them as having little or no effect. (Kiyoshi Takenaka, “Most Japanese firms see no need to follow U.S. with tariffs on China,” The Japan Times, 20 June 2024)

East Asia & The Pacific Reader | 15 June 2024, Saturday | Vol.1 No. 108
Japan to cut down purchase of Japanese Government Bonds to stabilize interest rate
On 15 June, The Bank of Japan (BOJ) announced its reduction in purchasing Japanese Government Bonds (JGB) to allow the market to lead in establishing interest rates by reducing the central bank’s control of long-term rates. However, the yen dropped after the announcement, jumping from 157 yen to USD to 158.25 yen to USD, close to levels not observed since the 1980s. The traders assumed the lack of concrete announcement added to risk in the market. The BOJ Gov. Kazup Ueda stated in a news conference: “The scale of reduction will likely be significant, but we would like to make a plan with a specific amount and pace while collecting views from market participants.” After ending its negative-rate policy in March, the central bank raised rates for the first time since 2007 with it rising to a 13-year high of 01.1 per cent. The BOJ remains committed to purchasing JGBs at the same pace to prevent rapid increases in interest rates. However, the BOJ’s decision may not turn the tide in the currency markets given rates elsewhere. The halt in some car shipments will likely result in a negative impact on the yen. The US Federal Reserve expects just one cut this year which will not likely reduce the gap as much as expected and the yen will continue to remain under pressure. Ueda stressed wanting to give more freedom to the market to lead the interest rates rather than focusing on the yen’s decline. (Kazuaki Nagata, “Bank of Japan’s slow-walk on bond buying reduction rattles market,” The Japan Times, 14 June 2024)

East Asia & The Pacific Reader | 13 June 2024, Thursday | Vol.1 No. 106
Japan vows to increase women’s participation, reports The Japan Times
On 12 June, The Japan Times reported  World Economic Forum ranked Japan 118 out of 146 countries in gender equality in 2024. Significant improvements were noted in the subindex of political empowerment. In 2023 a Switzerland-based international organisation, Global Gender Gap, ranked Japan 125. According to the 2024 report, Japan was on the 113 ranks compared to 138 last year. The share of women in legislative, senior official, and management roles increased by 1.7 per cent from 2023. According to the report: “Japan’s gender disparity in senior roles remains significant with five out of six leadership roles occupied by men.” According to the Global Gender Gap Index 2024, Japan has ranked the lowest compared to all the other G7 states and has fared poorly compared to several other Asian countries. In a briefing on 12 June, Chief Cabinet Secretary Yoshima Hayashi vowed to continue promoting women’s participation. (Francis Tang, “Japan makes gains in political empowerment in gender equality report,” The Japan Times, 12 June 2024)

East Asia & The Pacific Reader | 12 June 2024, Wednesday | Vol.1 No. 105
“Unjust Claims,” says the South Korean Foreign Ministry made by Japan over maritime survey 
On 12 June, Japan’s protest over South Korea’s routine maritime survey was rejected by the South Korean foreign ministry. Japan accuses South Korea of illegitimate maritime activity near the East Sea islands of Dokdo. However, South Korea takes a firm stance in this matter stating that it is an “unjust claim” by Japan as Dokdo has always been part of the South Korean territory following international law. A ministry official stated: “Japan's unjust claim over Dokdo, which is our inherent territory, will be met with a resolute response.” Japan has been including Dokdo as part of its territory in school textbooks and policy statements. This has given rise to longstanding conflict between the two states in the region of Dokdo. Previous to this, Japan had filed a complaint regarding the maritime surveys through diplomatic channels. (“Korea dismisses Japan's protest over maritime survey near Dokdo,” TheKoreaTimes, 12 June 2024)

East Asia & The Pacific Reader | 11 June 2024, Tuesday | Vol.1 No. 104
“We can be friends with the US and Japan, but why do we have to be hostile to China?” says KMT leader to President Lai
On 10 June, the parliamentary leader of the Kuomintang Party (KMT), Fu Kin-chi, advised the President of Taiwan Lai Ching-te to carefully look into Taiwan-China relations. Fu said: “We can be friends with the US and Japan, but why do we have to be hostile to China? Lai has embraced a wrong logic by picking a fight with our bread and butter.” Fu has spoken amid a political battle between the KMT’s opposition allies and Lai’s Democratic Progressive Party (DPP), over the legislation that would give the parliament sweeping powers. This legislation and some other special acts would give the opposition vast sums of money to invest in their constituencies. This sparked criticisms among the people and lawyers across. Several US diplomats have also criticized the acts. The DPP leaders have said that the KMT is colluding with China to disrupt the Lai government. (Thompson Chau, “Taiwan KMT bigwig Fu warns Lai not to 'pick fight' with China”, Nikkei Asia, 10 June 2024)

East Asia & The Pacific Reader | 10 June 2024, Monday | Vol.1 No. 103
Japanese authorities initiate surveys for the unclaimed bodies and remains of elderly people
On 09 June, Japan’s Welfare Ministry plans to begin the first fact-finding survey this summer regarding the unclaimed bodies of the elderly living alone. The Number of elderly people living alone is increasing in the country. According to the White paper presented by the Ministry, the rate of elderly people living alone has increased. The rate of elderly women living alone was 22.1 per cent, and the rate of elderly men living alone was 15 per cent. The ministry will conduct hearings with municipalities’ responses to unclaimed bodies and remains. The ministry will conduct hearings with municipalities and experts with the aim of identifying key issues and a list of model cases. (Jiji, “Japan to conduct first survey on unclaimed bodies”, The Japan Times, 09 June 2024)

East Asia & The Pacific Reader | 07 June 2024, Friday | Vol.1 No. 101
LDP passes the political funding bill in the lower house
On 06 June, the bill regarding political funding in Japan cleared the lower house after a series of debates. The ruling Liberal Democratic Party in Japan received support from Komeito-the partner in the ruling coalition and the Nippon Ishin no Kai, amid widespread resistance. The bill will now move to the upper house of the parliament for a final vote by 23 June. Takashi Yamashita said: “Our proposal aims to prevent further wrongdoing while safeguarding people’s political freedom and transparency in political funding.” The bill has been through several changes and amendments but the final version is a fruit of last-minute deals and compromises made by the LDP. The bill sets out a requirement for the politicians to issue confirmation letters to their treasures to attest to the accuracy of their political fund's reports. If the report is found inaccurate, the treasurer will be found guilty and the lawmakers will face a penalty of up to USD 3,200 along with a potential suspension from office. (Gabriele Ninivaggi, “LDP's political funding bill clears Lower House,” The Japan Times, 06 June 2024)

East Asia & The Pacific Reader | 06 June 2024, Thursday | Vol.1 No. 100
Birth rates in Japan hit an all-time low in 2023
On 05 June, the Health Ministry of Japan reported the birthrate has hit an all-time low of 1.20 in 2023. The latest figure is 0.06 points down from the 2022 record and the lowest since 1947. The birth rate has continuously declined since more women start a family later in life. The average age at which a woman gives birth is 31 as per the 2023 data compared to 25.7 in 1975. The data also indicated that the overall population will continue to decline in the future. Overall, the population fell by 848,659 people in 2023. In a news conference, Chief Cabinet Secretary, Yoshimasa Hayashi said: “The nation’s depopulation trend was in a critical phase. The next six years is our last chance to change the depopulation trend.” He also added that the government is taking measures including increasing income for the younger generations and support for households with young children. (Kanako Takahara, “Japan’s birth rate hit new low in 2023,”  The Japan Times, 05 June 2024)

East Asia & The Pacific Reader | 05 June 2024, Wednesday | Vol.1 No. 99
Japan plan to form legislation for next-generation chip production
On 05 June, the Japanese government plans to pass legislation supporting the manufacturing of the next-generation chips used in artificial intelligence and electric vehicles. The document is to come out in June, calling for the government to consider legal measures necessary for mass production, likely with an eye towards the domestic player -Rapidus. Some people think that having a legal basis for guaranteed fiscal support will make it easier to attract investment over the long term. Japan controlled a majority of the global semiconductor market in the 1980s. Later the market share dropped to single digits, and large-scale domestic manufacturing of leading-edge chips is seen as a way to boost its growth potential, and essential to economic security, as a crucial resource for key industries. The government also looks to set up a regional reskilling program in cooperation with the private sector and academia. The draft touches on the impact of the weak Yen which the previous plan did not. It noted that the: “softness of the currency is a risk factor for consumer spending, warning that attention must be paid to the impact on household buying power through higher import prices.” (“Japan eyes legislative support for next-gen chip production,” Nikki Asia, 05 June 2024)

East Asia & The Pacific Reader | 04 June 2024, Tuesday | Vol.1 No. 98
Japanese Prime Minister refutes plans for a snap election
On 04 June, Prime Minister Fumio Kishida said he is not planning to dissolve the parliament for a snap election during the current session of the parliament. On being asked Kishida said: “As I have always said, I am now concentrating on political reforms and other issues that can’t be postponed, I am thinking of nothing else but achieving results in those areas.” His cabinet has gotten record-low approval ratings as the Liberal Democratic Party grapples with a recent political funds scandal within itself. Recent election losses have pushed the ruling bloc lawmakers to oppose any attempt to call for elections before the end of the parliament session. The LDP and the main opposition party, the Constitutional Democratic Party of Japan agreed to hold a Q&A session in the lower house’s political reform special committee on 05 June. Kishida will also attend this. (Jiji, “Kishida says he won't call a snap election before parliament closes,” The Japan Times, 04 June 2024)