Japan General Discussion

[jaichind]

http://www.bloomberg.com/news/2014-10-23/abe-minister-says-aide-spent-funds-in-bondage-bar-reports-say.html

The newly appointed industry minister Yoichi Miyazawa which replaced Yuko Obuchi who herself quit after a few days due to another scandal admitted that his underlings had spent office cash at a S&M sex bar.  What is funny about this in addition to the scandal aspects of this is aristocratic nature of these appointments. Yoichi Miyazawa is the nephew of a former PM and Yuko Obuchi is the daughter of a former PM.  Oh yeah, Shinzō Abe is the grandson a PM as well while we are at it. 

On the other hand I really doubt any of these scandals will lead to Shinzō Abe's departure.  What took him down last time was not the scandals per say but scandals PLUS DPJ led alliance taking over the upper house.  Once the scandals hit, the DPJ was justified in blocking everything that the Shinzō Abe regime was doing on the principle that these scandals proved that Shinzō Abe lost the right to rule.  Such a situation is not in place today with the opposition parties still nowhere in terms of being able to join forces and challenge LDP.  Unless LDP sees a danger of losing the next round of elections, Shinzō Abe is safe.

[jaichind]

More news on Yoichi Miyazawa, who only took the job a few days ago when predecessor Yuko Obuchi stepped down.  It appears that he has a stake in the operator of the Fukushima nuclear plant that he oversees.  This extra awkward since it is his job to convince the public that it is safe to restart the plant  which has the side affect of increasing the value of his shares.  To be fair the amount in question is only a few thousands dollars.  The complaint seems to be that he should have just sold this stake when he was given this job. 

Anyway, I do think it is critical that these nuclear plants do start up as soon as possible.  I was on a business trip to Tokyo in Aug this and I the comment I made to myself was "why is the AC here so bad or non-existent."  Then I realized it is because of the bad power situation. 

[jaichind]

Yoichi Miyazawa's response to the most recent scandal where he has found to hold stock in the company whose cleanup of the devastated Fukushima nuclear plant he would oversee is quite funny.

“Honestly, I thought it was my duty as a politician to possess them,” Mr. Miyazawa said, according to Kyodo News, saying that ownership of the shares had allowed him to keep an eye on the company’s efforts to clean up after the 2011 nuclear accident.

Imagine if the US secretary of Defense would say something like "but I thought it was my duty as a politician to own shares in Lockheed Martin, that way I can keep a eye on that contractors work delivering weapons orders from the Defense Department"

[jaichind]

Bank of Japan decided late last week to expand on the QE program sending world stocks higher along with the Japanese market as well as sending the JPY to record lows.  I guess this will have the short term effect of giving the impression that Abeonomics is going somewhere but the weaker JPY will see price for consumers rise even while their income stagnate.  I guess the Bank of Japan and Abe are hoping that the profits this QE shot spurs might make its way to pay increases.  If not the political impact on Abe on the medium run will be quite negative.

[jaichind]

UPDATE1: Abe may dissolve lower house for Dec. election: sources+
TOKYO, Nov. 11 Kyodo
(EDS: ADDING ABE'S QUOTES, DETAILS)
Prime Minister Shinzo Abe is considering dissolving the lower house and calling a snap election by the end of this year as he faces a tough decision on a planned consumption tax hike, government and ruling party sources said Tuesday.
"The prime minister is considering various options, and one of them is a House of Representatives election by the end of the year," a government source said.
A senior official of Abe's Liberal Democratic party said the premier "may dissolve (the lower house) as early as Nov. 19," two days after he returns from a summit of the Group of 20 countries in Australia, the last leg of his ongoing three-nation tour.
If the lower house is dissolved, official campaigning for a general election is expected to start Dec. 2 or Dec. 9, with voting set for Dec. 14 or Dec. 21, according to the sources.
But Abe remained mum on the possibility of dissolving the lower house.
"I haven't decided anything about the timing of the dissolution," Abe said at a press conference Tuesday in Beijing after attending a summit of the Asia-Pacific Economic Cooperation forum.
"I've heard that speculation-based media reports are spreading in Japan," Abe said. "I haven't mentioned the dissolution even once."
Earlier Tuesday, however, Natsuo Yamaguchi, head of the LDP's junior coalition partner Komeito, said in Tokyo he will prepare his party "for a year-end election scenario."
Abe is expected to meet with Yamaguchi and other ruling party executives shortly after his return from the overseas trip to discuss what course of action to take for the lower house.
Abe may also listen to what Yamaguchi says about consumption tax policy.
Some have said Abe should decide after the election on whether to go ahead with raising the tax rate to 10 percent from the current 8 percent as stipulated by a law.
The tax increase is aimed at covering swelling social security costs for Japan's graying population. The country's public debt is equivalent to more than 200 percent of gross domestic product.
The Abe government has said it will make a final decision after assessing preliminary and revised GDP data for the July-September period, due out next Monday and Dec. 8, respectively.
In the wake of the April 1 tax hike from 5 percent to 8 percent, the Japanese economy contracted an annualized real 7.1 percent in the April-June period, its worst setback since the first quarter of 2009.

[jaichind]

Abe is gambling with this... he might win more seats... or he might loose seats.

Normally when you gamble, you loose.

I suspect he will lose.  What he is saying is "I am going to delay the consumption tax which might lead to bad results and make me unpopular, so I am going to have an election now to lock that in so when the bad results come it is too late for you to try to punish me." What is going in his favor is that the JIP (fusion of JRP and the Unity party which is a Your Party splinter), DPJ, and various other center-left parties (PLP, SDP etc etc) are all disunited and not ready for a campaign.  On the other had sending the signal that Abeconomics is not working and wanting an election now might prompt de fact anti-LDP tactical voting and as a result LDP-NKP does not well as expected (still winning a majority of course.)  This time LDP-NKP does not have viable YP to pull int anti-LDP-NKP center-right voters.  These voters might end up voting DPJ to oppose LDP. This is the main risk of this election for Abe.

[jaichind]

Latest NHK poll.  Abe approval  44-38.  Support for parties

LDP   36.6
NKP    2.2

DPJ    7.9
JIP     1.2 (this is the Hashimoto Party)
JCP    3.5
PFG   0.2  (this is  Ishihara Party)
PLP    0.0
SDP   0.7

I suspect LDP-NKP will get around 38-42 in the party list vote which would be similar to 2012.  But in the FPTP vote there will be more anti-LDP-NKP tactical voting leading to a smaller majority than 2012.

[jaichind]

Of course Abe could be very effective in communicating why an election is necessary without making him look like a someone that is trying to lock in some result knowing that things will blow up in the future.  If so it will be an LDP-NKP sweep.

[jaichind]

The trend over the last few months has been the center-right opposition parties had to start choosing between being pro-LDP or anti-LDP.  This is the case for both YP and JRP.  First YP had a split where anti-LDP faction formed the Unity Party (UP.)  Then JRP wanted to merge with UP and that is when the pro-LDP faction in RJP which is Ishihara  (his own son is in the LDP) split to create Party for Future Generations (PFG) (really funny because almost everyone in this party is pretty much over the age of 70.)  JRP then merged with UP to form Japan Innovation Party (JIP).  Now, what remains of YP want to merge with DPJ.  I am almost certain that the pro-LDP faction of what remains of YP will bolt from this (namely Watanabe who formed YP in the first place.)  If the DPJ-YP does merge or form an alliance I am sure Watanabe and his faction will split from YP and merge with PFG.

Yes, there is talk of DPJ and JIP merging which seems unlikely.  An series of tactical alliance seems possible to stop the LDP-NKP onslaught. I think PFG which is really just a new version of the old  Sunrise Party led by Ishihara really is just an extreme right wing version of LDP and rope in 1%-2% of the vote if that much.

[jaichind]

http://www.washingtonpost.com/world/in-blow-for-tokyo-and-washington-okinawa-elects-anti-base-governor/2014/11/16/eeade0e6-829f-4e32-991a-26826a2450be_story.html

"In blow for Tokyo and Washington, Okinawa elects anti-base governor"

This is a severe blow to Abe's government as the new governor will veto the US base moving plans and Abe will have to either overrule him (looks bad) or try to convince him to go along or look very bad in front of the Americans. 

[jaichind]

Post election polls

Kyodo poll.  Approval of Abe Cabinet 46.9%/45.3%. 62.8% of surveyed don’t think Japan economy will improve on Abenomics. 55% do not support Abe's security policies.

[jaichind]

In a widely-watched test of strength, Prime Minister Shinzo Abe’s candidate for the governorship of Saga Prefecture lost to the candidate promoted by Japan Agriculture (JA), the organization of Japan’s farm cooperatives. The key issue for us is whether this makes it more difficult for Abe to go along with the liberalization measures on farm imports that are indispensable to security an agreement with the US on market access for the Trans-Pacific Partnership (TPP) free trade agreement.

In the gubernatorial election in Saga prefecture in western Japan on Sunday, Abe and the LDP put up Keisuke Hiwatashi, a supporter Abe’s efforts to reform the JA-Zenchu system. JA-Zenchu responded by putting up its candidate, Yoshinori Yamaguchi, a conservative former official of the Ministry of Agriculture (MAFF). There were two other candidates. Yamaguchi beat Hiwatashi 182,795 to 143,720 in the voting in Saga, a prefecture on the southwestern main island of Kyushu with a population of about 800,000 people.

Ironically, one of the reasons why LDP was defeated was due to low turnout where the very well organized JA was able to defeat the official LDP candidate.  Back in December one of the main reasons for the LDP-KP landslide was due to low turnout.  This will have an impact on TPP reforms that Abe was hoping to push forward.

While Abe won an overwhelming victory in the December Lower House elections, he has to worry about local elections coming up this April and the Upper House election coming up in July 2016. While the rural vote and JA-Zenchu did not have an outsized role in the LDP’s fortunes in the Lower House election it will have more leverage in the local elections. Moreover, it will have more leverage in the Upper House elections, where 29 mostly-rural single-seat prefectures usually tip the balance to one party or another. Since Abe needs overwhelming majority in both Houses to push his security-related agenda, including setting the stage of eventual Constitutional revision.

According to Jiji Press, an LDP lawmaker backed by farmers warned that the fight over JA-Zenchu reform would certainly affect the series of local elections in April as well as next year's election for the Upper House. Whether that is an accurate assessment or a JA-Zenchu boast in the wake of the Saga victory remains to be seen.

[jaichind]

http://www.japantimes.co.jp/news/2015/05/17/national/politics-diplomacy/osaka-referendum-rejects-merger-plan-possibly-ending-hashimotos-political-career/

Osaka referendum rejects merger plan, possibly ending Hashimoto’s political career.  It was defeated 49.6 vs 50.4.

Too bad.  I actually have learned to like Hashimoto at lot more.  Of course it has more to do with the libertarian turn of JIP after its merger with a faction of YP.

This is good news for DPJ as this means it will continue to dominate the opposition space.

[jaichind]

There is a new political force which got created as a part of the 2014 lower house elections.  It is
日本を元気にする会 or The Assembly to Energize Japan.  It is the rump YP that did not join DPJ or JIP but continued after the dissolution of YP.  It is led by 松田公太 (Kota Matsuda) who was a member of YP who has a business background.  This party has some some strength in the Upper House and is an advocate for limited government.

[jaichind]

There is another YP remnant party, 神奈川みんなの改革, or Kanagawa Your Party of Reform (there seems to be no official English translation) which is a regional party based in Kanagawa.  It is led by 浅尾慶一郎 (Keiichiro Asao), who was the last leader of YP.  He took over leadership of YP after Watanabe stepped down and it was his disagreement with Watanabe over the future of YP during the 2014 election campaign (he was for an alignment with DPJ while Watanabe was for an alignment with LDP.)  It turns out Watanabe lost re-election while Asao won re-election in 2014.  Anyway, he now leads this Kanagawa regional party and he is joined by an former YP member of the Upper House from Kanagawa so this party has 2 MPs in the Japanese Diet.

In the most recent prefecture election for Kanagawa, 神奈川みんなの改革 only won 1 seat out of 105.

[jaichind]

It seems JIP leader Kenji Eda will also resign over the defeat of the Osaka referendum defeat even thought this entire effort is really run by Hashimoto.    Most likely  Yorihisa Matsuno will take over.   Matsuno was a DPJ MP that defected to JRP in 2012.  He holds center-right views and was close to DPJ PM Yukio Hatoyama.  Yukio Hatoyama fall from power within the DPJ was one of the mains reasons why Matsuno went over to JRP.

[jaichind]

That doesn't seem too bad at all, considering. What does 'center-right' mean in a current-JIP context?

Matsuno seems to take a more revisionist position on the Yasukuni Shrine issue, tougher on the North Korean issue, and opposed to naturalized citizens participation in Japanese politics.   Overall I like  Kenji Eda better mostly because Kenji takes an unambiguous line on the role of free markets and the need for regulatory and labor market reform.   

[jaichind]

JIP elections Yorihisa Matsuno as leader.  Most likely Matsuno will move JIP toward a closer alliance with DPJ in opposition to LDP.  Kenji tended to position the JIP equidistant between DPJ and LDP.

[jaichind]

What is interesting about the Osaka referendum are the strange alliances it created.  It actually was

{Osaka Restoration Association + JIP + National LDP + National KP}

vs

{Osaka LDP + Osaka DPJ + Osaka JCP + Osaka KP (kinda) }

JIP is really the merger of JRP and a YP splinter.  JRP was really the national version of Osaka Restoration Association and to keep its Osaka local identify Osaka Restoration Association never joined JRP or JIP.

The Osaka branch of LDP DPJ and JCP are all bitterly opposed to Osaka Restoration Association.  Many of the leaders in Osaka Restoration Association are LDP rebels but the vote based on Osaka Restoration Association is more from DPJ than LDP.  This has led to both LDP and DPJ being opposed to Osaka Restoration Association.  The National KP actually has good relations with Osaka Restoration Association with the Osaka KP somewhat lukewarm.  The national KP supported calling the referendum but then the Osaka KP did come out lukewarm against it and the Osaka KP did not really campaign against it.

The national LDP led by Abe was really hoping that Hashimoto wins the referendum to enhance his power within the JIP over the pro-DPJ faction within the JIP.  Abe was hoping that after the 2016 Upper House elections he can construct a 2/3 majority around LDP, pro-revisionist former YP, JIP and DPJ members.  For that to take place the leadership of the JIP must not be pro-DPJ or else alliance dynamics of a DPJ-JIP alliance will dictate that such support will not be forthcoming.  Ergo it was critical that Hashimoto enhances his power in JIP.   As for KP, It was really the national KP since it was part of the Abe cabinet that came in to pressure the Osaka KP to at least support holding the referendum while many of the Osaka KP was against it leading to a neutral position during the vote.  What is also interesting and funny is that the Osaka LDP, DPJ, and JCP formed an unlikely united front to campaign against the Osaka merger idea.  

Now that the referendum failed and Matsuno in charge of JIP, chances are that there will be a DPJ-JIP alliances and perhaps a merger.  Of course  Osaka Restoration Association will not be part of this and will continue as a separate party.  Even when Hashimoto retires from politics like he said later this year, the  Osaka Restoration Association will need his legacy to continue to get votes.  So there is no way that  Osaka Restoration Association will enter into an alliance with DPJ let alone join it.  I can see next year  Osaka Restoration Association and JIP split completely into two truly separate parties.  Osaka KP's relationship with its national party is damaged as well as Osaka LDP's relationship with Abe.  I am not even sure Hashimoto is really gone.  He will retire from Osaka politics but can I see Abe bring him in as a LDP candidate at the national level in the future.  Of course if he runs as LDP in Osaka it would lead to a civil war in Osaka LDP with Osaka LDP revolting against Abe.   2016 Osaka politics will be fun.

For Abe it is back to the drawing board on how to construct a 2/3 revisionist majority in the Upper House.

[jaichind]

I doubt that drawing board will much avail him. Most of the Japanese people just don't seem particularly thrilled with revisionism. It's unfortunately not the fringe position it used to be, but I doubt it's in and of itself nearly as much of a winning issue as Abe seems to hope it is.

I actually think that Abe believes this is the right thing to do even if it loses him and the LDP votes.  Most previous LDP politicians of various strips might believe in this to different degrees but was mostly about using it to corner the nationalist single issue vote to augment their various clientelist voting blocs but was never really pay the political, be it internal or international, costs of actually carrying out.  Abe is different I think.  He is about getting it done even if it cost him political capital. 

[jaichind]

More interesting facts about the Osaka Referendum.  Turnout was almost 67% compared to 47% turnout in the December Lower House elections.  The zones that had the highest turnout also were the most opposed to the Osaka restructure plan.  The zones that had a No majority tended to have turnout of around 69% and the zones that had a Yes majority tended to have a turnout of around 65%.  This means that the political apathy of Osaka and most likely of all of Japan is more of function of distrusts of political parties and less about political issues as a whole.  And when there is something to vote against they will turnout. 

[jaichind]

Japan's parliament enacts law lowering voting age from 20 to 18.  DPJ used to push this thinking that the youth tends to vote center-Left.  Recently LDP is pushing it on the premise that the youth might be becoming more conservative.  Either way, no one seems to want to oppose this, not even the DPJ.  It is also an attempt to counterbalance the growing domination of the elderly during elections.  For example, during the Osaka Referendum, all age groups voted for the proposed change except for the 70+ age bracket.  But that was enough to defeat the proposal. 

[jaichind]

Latest Asahi poll has the Abe cabinet approval rating at 39/37.  53/29 are against the various security bills that the Abe want the pass.  Various other polls last couple of weeks has Abe approval around low to mid 40s.  The bump Abe got from his trip to USA is gone and dropping. 

It seems the most recent drop is mostly driven by the security bills debate.  It seems that the Abe cabinet is by historical terms fairly popular but any policy that the Abe cabinet seems to push is always falls in popularity.  The Abe cabinet is more popular than any of its policies. This seems to be driven by the lack of alternatives to LDP-KP as well as the fact that the Abe cabinet is seem to be trying to fix the economic problem.  Ergo any policy that the Abe cabinet seems to push that is no economic in nature is less popular and gets less popular as time goes on.

[jaichind]

Abe has pledged to pass the bills that allow Japan to defend other countries in the current session of parliament, which has been extended through September.  The opposition claims this violates the Constitution.    A Kyodo News survey has support/oppose of these bills at 28/59.  I wonder what the LDP level of support will be in the polls after pass this this law over the opposition of a ever larger majority in the public.

[jaichind]

On Thursday, at a meeting of nearly 40 lawmakers from Abe's LDP, participants called for restrictions on media that oppose the government's bills.  "If you want to punish the media, the best way is to cut their income from advertisement," an LDP lawmaker told the closed meeting, the Asahi Shimbun newspaper said, quoting participants.  The unnamed lawmaker and others also called on the nation's biggest business lobby, Keidanren, to help financially pressure media that were criticizing the bills, the daily added.  When Abe was confronted with this he did indicate that freedom of press must be respected.  I guess the hawkish wing of LDP must feel the pressure of the dovish wing over the public opinion polls and the view of the hawks is that this is mostly a function of media coverage.