J Update

The Liberal Democratic Party (LDP) and Japan Innovation Party (JIP) agreed on their   tax reform proposal for FY2026 . To attract the Democratic Party for the People (DPP), the leading parties not only raised threshold of income tax from 1.60 million yen of annual income to 1.78 million yen, but abolished automobile tax on purchasing a new car. The decision seems more to be implementing political agenda, than fixing problems in financial system of the government.   Raising threshold of income tax has been requested by the DPP for a year. “Increasing take-home pay” was a main slogan of the DPP in the Upper House election in July. The fact that the LDP had not implemented the promise to raise the threshold was the reason why the DPP did not accept an offer from LDP president Sanae Takaichi to form a coalition in October.   The LDP’s answer to DPP’s request had been that raising the threshold would be unreasonable in terms of reforming tax system. Takaichi dealt with the pro...

The Liberal Democratic Party (LDP) and Japan Innovation Party (JIP)   failed   in enacting the bill for reducing seats in the House of Representatives in the extraordinary session of the Diet, which was closed on December 17 th . Both parties agreed on postponing the issue to the ordinary session of next year. Although JIP regarded the issue as crucial for maintaining coalition with the LDP, it does not show any sign of breaking up the relationship. In the agreement for forming a coalition, the LDP and JIP promised to pass the bill to reduce seats in the Lower House in the extraordinary session in this fall. This issue was upheld by JIP, when it decided to build a coalition with the LDP, instead of promoting regulation on political donation from companies and organizations. It was likely that JIP brought the issue as a justification for not focusing on the donation issue.   JIP believed that seat reduction in Osaka Prefectural Assembly and Osaka City, which had been led b...

Bank of Japan (BOJ) decided, with a unanimous vote, to set a guideline for money market operations, which would encourage the collateralized overnight call rate to remain at around 0.75 percent, at its monetary policy meeting (MPM) on December 19 th . The rate marked the highest level since 1995. The bank recognized that the trend of wage hike would continue to 2026 with moderate economic growth.   “Japan’s economy has recovered moderately, although some weakness has been seen in part,” BOJ  described  in its document on the discussion in its MPM. The bank raised the interest rate for the first time since it set at 0.5 percent in January, 2025. The main reason for the interest hike was the bank’s optimistic view on further wage hike for next year.   “Corporate profits are expected to remain at high levels on the whole, even after taking into account the impact of tariff policies. In this situation, considering factors such as the stances of labor and management on th...

Public prosecutors   requested  life in prison to the defendant, Tetsuya Yamagami, who was charged with shooting former prime minister Shinzo Abe to death, at the trial in Nara District Court on December 18th. Concerning significance of eliminating politically important figure, there have been arguments for possibility of a death penalty, the prosecutors dropped that choice. Yamagami said nothing about request of the penalty.   Yamagami shot Abe to kill in an election campaign speech in Nara on July 8th, 2022. In the former trials, Yamagami explained that he decided to kill Abe after he realized that Abe had a close relationship with former Unification Church. Yamagami said that he had a strong sentiment against that religious organization, to which his mother donated a large amount of money to the extent his family had been collapsed.   In the fifteenth trial, which became the last one before the court would make a judgement on January 21st in 2026, the prosecutors ...

The Diet   closed   the extraordinary session on December 17 th . While Prime Minister Sanae Takaichi was successful in passing a supplementary budget bill, she failed in implementing the agreement between the Liberal Democratic Party (LDP) and Japan Innovation Party (JIP) to reduce the seat of House of Representatives. As JIP does not show any intention to leave the coalition with the LDP, Takaichi seems to be satisfied with the result of the session.   The 2025 extraordinary session started October 21 st , 17days after Takaichi was elected the LDP president, and she was elected the prime minister on the first day of the session. The LDP and JIP agreed on forming a coalition on October 20 and she achieved approval from those parties, despite departure of Komeito from the coalition with the LDP, which lasted 26 years. Although the LDP-JIP coalition is in short of a simple majority in the Upper House, it passed the line of majority in the Lower House by including three ind...

The House of Councillors   approved   Sanae Takaichi Cabinet’s FY2025 supplemental budget bill on December 16 th . The budget passed the Diet. While the budget focused on measures to help households, which have been suffering from price inflation, it included some policies which required imposing further tax. As doubts on efficiency of the budget for stimulating Japanese economy expand, credibility on financial balance of Japanese government is eroded by a great amount of issuance of governmental bonds.   The size of the budget has swollen to 18.3 trillion yen to help car users through gasoline tax cut, to support families with children through national subsidy which would be 20 thousand yen for each family, and to provide local governments with financial resources so that they can distribute vouchers or other kinds of coupons to the people. To promote those economic policies, the budget assumed issuing 11.6 trillion yen of additional Japanese governmental bonds (JGBs). ...

The Liberal Democratic Party (LDP) and Japan Innovation Party (JIP)   agreed   on removing restrictions on export of defense equipment, which has been categorized in five patterns, in their policy discussion on December 15 th . They reached that agreement in the context of revision in the three principles on transferring defense equipment, upheld by Prime Minister Sanae Takaichi. However, two parties still differ on how to regulate excessive exports to foreign countries. Former prime minister Eisaku Sato decided that Japan should refrain from exporting weapons in  three cases : export to the communist countries, to the countries to which exporting weapons are prohibited by resolution of the United Nations, and to the countries at a conflict.   It was Sato’s nephew, former prime minister Shinzo Abe, who reformed those principles into  three principles on transferring “defense equipment”  in 2014, which allowed Japan to export defense equipment to foreign cou...

Two lawmakers affiliated with Japan Innovation Party (JIP) have spent political fund for payment to cabaret club, where young girls serve drinks and have conversation with customers. It is not to be criticized that an adult individual goes to a club with women’s service with payment from his or her pocket money. However, JIP lawmakers spent political funds, which were made of tax payers’ money. This is what the politics of coalition partner of the Liberal Democratic Party (LDP) and Prime Minister Sanae Takaichi is about. Takemitsu Okushita is a member of House of Representatives with two terms, elected from Osaka 7 th  single-seat district. An organization for controlling political funds topped by him has  paid  36,300 yen for a cabaret club in Akasaka, Tokyo, and 57,200 yen for a “lounge”, another type of bar with service of girls, in Osaka between March and April, 2023. The organization also spent 33,000 to a pub with stage show in Roppongi, Tokyo, in October, 2023. ...

A joint investigation team of police, including the Metropolitan Police Department,   arrested  two people with Chinese nationality with suspicion of violating Prohibition of Unauthorized Computer Access Act and Financial Instruments and Exchange Act in late November. Those suspects are doubted as having raised price of stock they held by hijacking someone’s online brokerage account. There have been acknowledged by the police 9.3 thousands of cases, in which illegal trades were made, since January, 2025. It is estimated that 710 billion yen was exchanged with those illegal trades. It marked the first case of arresting hijackers in those cases this year, who have been degrading internet stock trade.   Those two Chinese are suspected that they, conspiring with someone, illegally accessed 10 accounts of 10 customers of security companies on March 17 th , 2025. The suspects ordered a large volume of buying or selling shares of a certain company, which was listed on Standard M...

Sanae Takaichi administration   considers  raising the threshold of income tax from current annual 160 million yen to 178 million yen. The level of threshold has been proposed by the Democratic Party for the People (DPP), arguing that it is the core issue for the party. Prime Minister Takaichi seems to have made the decision to approach the DPP for further stability of her administration. Income tax on every individual is imposed with rate of 5 to 45 percent, depending on volume of income. Then, certain deduction is applied to the income. 580 thousand yen is basically deducted from annual income. Another 650 thousand yen of deduction is applied to a salary worker. And the government introduced additional 370 thousand yen of special deduction for a salary worker in 2025. Total tax deduction is currently 1.6 million yen.   The current tax deduction system means that a worker who earns 1.6 million yen or less does not need to pay income tax. That is the system of threshold o...

The Governor of Hokkaido, Naomichi Suzuki,   announced  in a regular session of Hokkaido Prefectural Assembly that he would approve resumption of reactor #3 in Tomari Nuclear Power Plant in southwest coast of Hokkaido, facing the Japan Sea. The reactor clears all the conditions for the resumption by Suzuki’s approval, and it is supposed to restart as soon as 2027. It will be the first nuclear reactor in Hokkaido to restart since the severe accident in Fukushima Daiichi Nuclear Power Plant in 2011. Tomari Nuclear Power Plant is owned by Hokkaido Electric Power Company (HEPCO) and has three nuclear reactors. The reactor #3, with 912 thousand kilowatts of outlet power, started its operation in 2009, which is the newest among those three. Although those three reactors stopped after the accident in Fukushima, reactor #3 passed the examination for resumption in July, 2025.   Suzuki announced his position in late November that he would approve resumption of reactor #3, because t...

The FY2025 supplemental budget bill   passed   the House of Representative on December 11 th   and it was sent to the Upper House. The Democratic Party for the People (DPP), an opposition party that takes a stance relatively close to the leading parties, and former coalition partner of the Liberal Democratic Party, Komeito, voted for the bill. It is likely that the bill will be enacted within current session of the Diet, which is closing December 17 th . Prime Minister Sanae Takaichi, with her minority government, is making a major achievement to stabilize her administration. Since she was elected PM in early October, Takaichi has been reiterated her ambition to make a “strong economy” of Japan. Her first attempt for the agenda was  the supplemental budget  bill with size of 18.3 trillion yen, which included her economic stimulus plan. The budget includes financial support for payment of households in gas or electricity, routine investment on building infrastruc...

A major earthquake   hit   northern Japan in late night on December 8 th . Fifty or more people were injured and minor tsunami arrived on the Pacific coast of Hokkaido and northern Honshu islands. People evacuated from their damaged house or possible major tsunami. The government of Japan   issued  a “subsequent quake advisory” for the first time since it established this category of warning in 2022. People in the designated area need to be careful for next earthquake at least for a week.   The earthquake occurred at under the sea eastern offshore Aomori prefecture at 11:15 p.m. The depth of epicenter was 50 kilometers. Estimated magnitude was 7.5 and Japan Meteorological Agency (JMA) detected 6+ degree of quake in Aomori city and weaker quake in prefectures in Hokkaido, Aomori, Iwate, Miyagi or else. Tsunamis with a meter high or smaller arrived slong the Pacific coast of those area. JMA issued tsunami warning to those area and cancelled it seven hours later. ...

In their decisions over equality of value of one vote in the election of the Upper House in July, the courts are  divided between the opinions that the election was constitutional and unconstitutional. As sentences of unconstitutionality occupies the greater share of the courts, it is recognized that the parties in the House need to be serious for improving the election system by next election in 2028.   Two groups of lawyers filed 16 lawsuits to 14 high courts or their branches, arguing that 2025 July election of the Upper House had been unconstitutional, because the gap between urban and rural districts was too wide to implement requirement of the Constitution of Japan that guarantees every voters equality under the law. The high court is designated as the first court to decide this issue.   The greatest value of one vote was given to the voters in Fukui district in the election. One seat was allocated to 619 thousand voters in the district. On the other hand, 1.9 milli...

Minister of Defense Shinjiro Koizumi announced on December 7   that Chinese fighter jets aimed their radar at an aircraft of Japan Self-defense Force. Japan made a strong protest to China, as China disputed against it. While China’s motivation is not clear so far, it is recognized in Japan that this military activity of China may reflect China’s frustration with unusual comment of Japan’s Prime Minister Sanae Takaichi on Taiwan contingency at the Diet in early November. In an unusual midnight  press conference  at Ministry of Defense, on 2 a.m. of Sunday morning, Koizumi reported that JFDF F-15 fighter jet was exposed to radar shot by J-15 Chinese fighter jets twice in the afternoon of December 6. The aircrafts were flying over international waters southeast of the Okinawa Main Island. Chinese fighter jets were installed on an aircraft carrier, Liaoning, which was in an exercise at the area.   A fighter jet installs two kinds of radar in itself: fire-control radar an...

Ministry of Defense   started   landfill at east district offshore the Camp Schwab of United States Force in Henoko, Okinawa, on November 28 th . Although Governor of Okinawa firmly opposes construction of U.S. Force’s base in Henoko, which will be an alternative facility to Futenma Air Base, the government of Japan and the U.S. keep on building new base as the only choice for removing danger of Futenma Base located in urban area. The governor of Okinawa has an authority to approve building a military base in the prefecture. The landfill  was approved by former governor, Hirokazu Nakaima, in 2013. After Nakaima’s successor, Takeshi Onaga, withdrew the approval in 2015, the government of Japan sued Okinawan government, demanding confirmation that Onaga’s decision was invalid. The Supreme Court supported the argument of national government in 2016.   When national government realized that the seabed for landfilling was as soft as mayonnaise, it submitted revised plan f...

The Liberal Democratic Party (LDP) and Japan Innovation Party (JIP)   submitted   a bill for reducing seats in the House of Representatives to the Diet on December 5 th . The bill includes certain number of reductions in single-seat districts and proportional district with a clause of “automatic reduction” within a year. The opposition parties oppose the bill, criticizing it as very coercive. It is not sure that the bill will pass the Diet by the end of current session ending on December 17 th .   JIP has insisted on 10 percent reduction in the House that has 465 seats in total. While the party proposed that the reduction should be made only in proportional district with 176 seats, the idea faced firm opposition from opposition parties. Then, the LDP and JIP agreed on reducing 25 seats in single-seat districts out of 289 seats, and 20 seats in proportional district. Those reductions were included in the bill.   The most controversial part of the bill is a provision t...

Prime Minister Sanae Takaichi   established  the office in charge of revising special measures on taxation and subsidies in Cabinet Secretariat. Takaichi expects that the office will detect inefficiency of the national government, inspired by Department of Governmental Efficiency (DOGE) of the United States. However, it is skeptical that the organization, which members are basically bureaucrats, can steadily promote reform of current systems in the executive branch.   There are some loopholes in taxation system in Japan for political purposes. To support the people obtaining their own house, the national government applies income tax reduction for certain years to support payment for housing loans. To help companies with a plan of technological research and development or efforts for environmental efficiency, the government also reduces tax on those companies. Such benefits are called “special measures on taxation.” This system sometimes has troubles in transparency. ...