J Update

Embracing a serious concern on extreme devaluation of Japanese yen, financial authorities in both governments of Japan and the United States made coordinated intervention in currency market. Both governments announced on August 3 rd  that they made intervention of purchasing Japanese yen, causing steep rise of yen’s value in foreign exchange. It is still unclear whether this urgent action will bring stability in a string of yen’s depreciation.   Minister of Finance, Satsuki Katayama, issued a  statement  that announced coordinated intervention by Japanese Ministry of Finance and U.S. Department of Treasury of purchasing Japanese yen on July 31 st  in EST of the U.S. “This joint action was taken pursuant to the U.S.-Japan Finance Ministers’ Joint Statement issued in September 2025 and countered excessive volatility and disorderly movements in the Japanese yen in recent months,” said Katayama in the statement. The statement stressed that both governments would not...

A week has passed since a magnitude 7.1 earthquake hit Kumamoto and other cities around. The earthquake caused thousands of evacuees, who are suffering from high heat in midsummer. The people who are vulnerable to disaster, including aged or handicapped people, need helping hands to survive. It is expected that the government of Japan takes appropriate measures for evacuees to spend comfortable life as much as possible. At the time of 6 p.m. on August 3 rd , 38 people  have died  with the earthquake, including an aged woman who died in her car while she was evacuating, 98 were injured, and 8,262 have evacuated, being unable to return their home. 12,276 houses and buildings were damaged, out of which 700 were totally broken down. 45,280 houses lost water supply. 155 shelters using schools or other public facilities were established in Kumamoto prefecture.   The evacuees are forced to have uneasy life in shelters without air conditioner, kitchen or bathroom in a good condit...

Encouraged by xenophobic sentiment growing among Japanese people, the government of Japan   is setting  stricter standards for foreigners to obtain license of permanent residence. New standards will include higher income which is equivalent to ordinary Japanese citizens. They also require more contribution to national interest of Japan than ever. It reflects political tendency that a party upholding strict regulation on immigrants attracts public attention.   The Liberal Democratic Party and Japan Innovation Party  agreed  for forming a leading coalition last October on enhancement of measures against illegal activities of foreigners. In the Lower House election in February 2026, ultraconservative Sanseito showed upsurge with  policies  for stricter regulation against foreigners, including limitation on acceptance of foreign people by reviewing labor system. Conservative parties are competing each other over regulation on foreigners to attract voters w...

The great earthquake in Kumamoto on July 28 th  paralyzed manufacturing around Kumamoto area. Kumamoto is known as concentration of semiconductor industry. A lot of factories for producing semiconductor and related goods suffered from the earthquake with suspension of their operation. It is not clear how much the earthquake affected businesses in Kumamoto and Kyushu area.   This earthquake in Kumamoto  imposed  great damage on various industries. It has blown away Aeon Mall Kumamoto, which is one of the greatest shopping malls in Kyushu region. Leak of gas after the earthquake is supposed to have caused a major explosion in the building. Three chimneys in Yatsushiro Factory of Japan Paper fell down with the quake. The factory was producing papers for books and newspapers. The chimneys had been the symbol of landscape of Yatsushiro city.   Having many facilities for semiconductor and related industries, Kyushu is dubbed as “silicon island.” Kumamoto is the center...

Immediately after she announced her plan to reduce consumption tax rate for foods from 8 percent to 1, Prime Minister Sanae Takaichi faced strong dispute of lawmakers in the Liberal Democratic Party. The criticisms targeted lack of perspective for fiscal resource of the tax cut and difficulty of resumption of current tax rate two years later. It is possible that the frustration with Takaichi’s unilateral handlings of policies will erode her political basis in the ruling party.   Consumption tax cut was firstly advocated by opposition parties as the policy for the Lower House election in February, which was abruptly decided by Takaichi. To compete with rival parties, Takaichi suddenly included the consumption tax cut for foods in LDP’s campaign platform. Having achieved victory in the election, Takaichi launched a multi-partisan council to discuss the tax cut. Although the council could not reach a consensus, Takaichi decided on July 30 th  to introduce the tax cut in April 202...

Prime Minister Sanae Takaichi   announced  her idea to the Liberal Democratic Party to introduce temporary consumption tax rate for foods at 1 percent for two years starting from next April. Although she had received a report from the National Council on Social Security, Takaichi decided to ignore opinion of the opposition parties that was against consumption tax cut. Takaichi believes that her policy will work to mitigate impacts of price inflation, but it has many problems.   Consumption tax cut was in Takaichi’s policy platform for February Lower House election. It was designed as a measure for the period before the government would introduce refundable tax credit. Although Takaichi hoped to receive a report from the national council that would recommend consumption tax cut to 1 percent, the opposition parties did not agree with the consumption tax cut, supporting direct subsidies for households. The council wrapped up its report with options of both consumption tax cu...

Central Minimum Wages Council reached   a deal  on the average of minimum wage for workers in Japan in 2026 at 1,176 yen per hour, which rose by 55 yen (4.9 percent) from the previous year. Although the government of Japan has a target for minimum wage at 1,500 yen, the gain toward it gets smaller, reflecting recent slowdown of consumers price hike. It is likely that momentum for wage hike can be declining in Sanae Takaichi administration. Every prefecture sets its own minimum wage in the fall, which indicates the lowest limit of hourly wage for an employee. A minimum wage is determined based on consideration of workers’ quality of life, average salary of ordinary people and solvency of companies. Central Minimum Wages Council decides a guideline for minimum wage hike in advance to local prefectural councils start discussion.   Last year, the central council presented 1,118 yen per hour for average of minimum wage, which marked 63 yen (6.0 percent) of increase from the pr...

Major quake hit Kumamoto again. An earthquake with degree 7 of seismic intensity shook Kumamoto and other cities on July 28 th , causing a number of deaths and injuries. A lot of families had to evacuate broken houses in extremely hot and humid summer days and nights. Although major earthquake was anticipated by some experts, it was not easy to be ready for natural disaster.   The earthquake occurred on 4:27 p.m. with 7.1-magnitude. Seismic center was 16 kilometers underground of Kumamoto city, Kumamoto. It was  reported  that 12 died, 6 are in cardiac arrest and 4 are missed at the time of 9 p.m. on July 29 th . Nearly 10 thousand people  evacuated  and over 50 thousand houses lost water service. Blackout spread to over 40 thousand houses.   Unknown number of the people are captured under broken houses and ambulances keep on sending injured people to the hospitals which do not have sufficient capacity for caring them. Nuclear Regulation Authority announced...

Having Diet session gotten through, Prime Minister Sanae Takaichi held an ordinary   press conference  at Prime Minister’s Official Residence on July 27. She expressed no regret on her few appearances to Diet discussions. She also hoped to accelerate in implementing coalition agreement with Japan Innovation Party which pushed its own agenda in the Diet. Leaving measures to deal with price inflation behind, Takaichi looks to reshuffling her cabinet and party leaders.   After passing annual budget bill every year, it is usual for the prime minister to join intensive discussions on major topics in the Committee on Budget of both chambers. Takaichi’s predecessor, Shigeru Ishiba,  attended  the intensive discussions for 90 hours in 2025. Takaichi spent only 29 hours for the discussion this year. Her reluctancy on answering questions of opposition parties in the Diet is outstanding.   Takaichi seems to find less value in Diet discussion. To promote reduction of L...

Despite land-sliding victory in the Lower House election in February, the ruling Liberal Democratic Party (LDP) failed in proposing constitutional amendment in the special session of the Diet, which closed on July 25 th . Parties are so sharply opposed each other over unilateral procedure of some important bills that they could not afford to have enough discussion over constitution. All they could do was a trivial amendment of voting system for constitutional referendum.   In the Lower House election in February, the LDP obtained two-third majority. Prime Minister Sanae Takaichi expressed her strong expectation for constitutional amendment in LDP National Convention held in April, saying “The time has come.”   The Constitution of Japan  demands  two-third majority of each chamber of the Diet to propose an amendment and simple majority in the referendum afterward. It is theoretically possible for the LDP to unilaterally make a proposal for amendment in the Lower House...

Minister of Defense, Shinjiro Koizumi, announced that Chinese destroyer made live-fire drills in Japan’s economic exclusive zone (EEZ) around Okinotorishima Island in the Pacific Ocean. While Japan revealed that China and Russia were enhancing their military cooperation, China argued that Okinontorishima was not an island but a rock. After Prime Minister Sanae Takaichi took seat last October, security tension between Japan and China has been getting high. Koizumi introduced the information during his visit to London for observing an air show on July 21 st . “We confirmed the exercise of shooting with machinegun and made a proposal to China through a diplomatic route, concerning possible danger for vessels in the area,”  said  Koizumi in his press conference.   According to the information, Japan Maritime Self-defense Force confirmed two Chinese destroyers with missiles, one Chinese supply ship and one frigate of Russian Navy at the point of 330 kilometers southwest of Oki...

After intensive negotiation beyond the aisle, the Upper House of the Diet   approved   Backup Capital Act on July 24 th . The law was enacted. The leading coalition was successful in securing majority with a slight margin, supported by some opposition or independent lawmakers. The bill has strongly been pushed by Japan Innovation Party (JIP), the coalition partner of the Liberal Democratic Party (LDP). Prime Minister Sanae Takaichi promoted the bill to keep JIP in the leading coalition.   The Backup Capital Act is to build a local government that has function of national capital, in case Tokyo loses its control with natural disaster or other occasion. It also aims at constructing economic centers in the context of decentralization of Japanese businesses. A candidate for backup capital needs to have certain amount of population, accumulation of business sectors and branches of national government, as well as agreement of coordination between prefectural government and city...

Minister for Foreign Affairs Toshimitsu Motegi had a short conversation with Chinese Foreign Minister Wang Yi in the backdrop of ASEAN-related meetings in Manila, the Philippines. It was the first opportunity for foreign ministers of both countries to have a contact, since diplomatic relations of both governments were exacerbated with Japanese Prime Minister Sanae Takaichi’s speech on security of Taiwan last November. Although details of the conversation have not been disclosed, it is still unlikely for both countries to immediately improve their relationship through diplomatic breakthrough.   Without acknowledging sensitivity on the issue for China, Takaichi stated that armed attack on Taiwan could construct a survival threatening situation, in which Japan can be involved with use of armed force. China firmly protested Takaichi’s comment, introducing regulation on Chinese citizens to travel Japan or restriction of exporting dual-use products. Although Takaichi insisted that she wo...

Prime Minister Sanae Takaichi submitted a statement of her secretary on her defamation scandal to the chairman of Committee on Budget of the House or Representatives on July 22 nd . Takaichi explained that she had not been involved in posting slander on her contenders in presidential election of the Liberal Democratic Party (LDP) last October. However, the statement indicates that her secretary had some contacts with a technician who created video of defamation, although he argues that he does not remember the details. Opposition parties are not satisfied with the statement.   Weekly Bunshun  magazine  reported  in April that Takaichi’s campaign for LDP presidential election distributed videos of defamation on Shinjiro Koizumi and Yoshimasa Hayashi through social networking service, which was made with consultation between her secretary Takeshi Kinoshita and internet technician Ken Matsui. It was also doubted that Kinoshita was involved in Matsui’s delivery of crypto...

Sanae Takaichi Cabinet officially authorized   Basic Policy on Economic and Fiscal Management and Reform (Thick-boned Plan) 2026   on July 21 st . Following Takaichi’s firm conviction for building a strong economy, the plan focuses on active investment on businesses, leaving fiscal discipline behind. It is not clear, however, whether the markets will place fundamental trust in this economic policy of Takaichi government.   The plan is annual guideline of the Cabinet for important economic policies and formulation of annual budget. Former prime minister, Jun-ichiro Koizumi, started publishing the plan in 2001, which was discussed in Council on Economic and Fiscal Policy. The plan has been directing economic policy of every administration, reflecting basic idea of the prime minister.   Since she took office last October, Prime Minister Takaichi has been insisting on promoting investment for crisis management and growth. Takaichi recognizes that a longtime slowdown of J...

Insistence of Prime Minister Sanae Takaichi on patrilinear succession to the throne of the Emperor has taken its toll. In the polls conducted by news organizations, approval rate for Takaichi Cabinet obviously declined right after revised Imperial House Law (IHL) passed the Diet. Although she tries to pass some other bills in the Diet during extra term of current session, there is no predictable event in this summer or fall, by which she can regain popularity from general voters.   Takaichi government passed revised IHL on July 17 th  with approval of the ruling Liberal Democratic Party (LDP), Japan Innovation Party (JIP) and some other opposition parties. The law enables female members of the Imperial House to stay after marriage and adoption of male in the male line of former imperial families. It gives the offspring of adopted male a status of succeeding to the throne and denied imperial membership of spouse and children of female members staying in the family.   In th...

Sanae Takaichi Cabinet revised Japan’s   AI Basic Plan  to enhance risk management of artificial intelligence. While it proposes strengthening systems of the government, including formulating a guideline for using AI or regulating legislation, the revised plan does not offer any specific measure on how to deal with cyber attacks. It is not easy for the government of Japan to establish “AI sovereignty” against foreign countries.   The government firstly issued AI Basic Plan in December 2025. It was overwhelmingly focused on how to promote AI technology in Japan. Takaichi  promised  to “make Japan the world’s best country to develop and use AI” in her policy speech to the Diet in October 2025. She simply believed that promotion of AI would accelerate economic growth through active investment on it. AI was mainly considered as one of the tools for implementing her economic policies.   Development of AI Mythos by Anthropic significantly changed the situation of...