Japanese Politics One-on-One #227

Hello again Japan Hands — reporting this week from inside the cabin of the good ship Gryms, now docked and a bit damp under a raging storm topside. Today’s update is packed with major developments: international diplomacy, tariff negotiations, rising rice tensions, and the final countdown to potential political upheaval. Let’s dive in before the news cycle sweeps it all away:

In this Update:

· Yen briefly strengthens to ¥144.11 amid Middle East tensions and safe-haven flows;

· PM Ishiba holds summits with Lithuania and Guatemala, and calls Trump ahead of his departure today for G7;

· Tariff negotiations heat up; Akazawa heads to Washington as Trump signals possible delay;

· BOJ and U.S. Fed prepare major policy announcements this week;

· Rice prices and stockpile releases dominate domestic agenda under Minister Koizumi;

· Double election decision looms as Diet session closes this week;

· Tokyo Metropolitan Election campaign officially underway with 295 candidates for 127 seats;

· Expo Osaka enters second month, but faces logistical bottlenecks and political visibility.

Yen and Economic Tensions
The yen closed Friday at ¥144.11, up slightly amid Middle East conflict. A 10% oil price surge and international uncertainty prompted temporary currency flows into safe havens. Meanwhile, the BOJ meets unusually early this month (Tuesday), and the U.S. Fed follows with a key rate announcement on Wednesday. Both meetings could sharply affect the yen-dollar balance.

PM’s Diplomatic Sprint and G7 Build-up
PM Ishiba had summits with Lithuania and Guatemala, and spoke with Trump on Thursday about tariffs and meeting at the G7 summit in Canada. Trade chief Akazawa departed for D.C. the same day to continue negotiations. A July 9 deadline looms for Trump-era tariffs to resume — unless a breakthrough is reached beforehand.

Domestic Agenda and Rising Rice Politics
Koizumi’s appointment as Agriculture Minister continues to pay political dividends. Stockpile releases have lowered rice prices after inflation pushed them 198% year-on-year. Koizumi’s rapid action is helping to recast the LDP’s image ahead of elections.

Structural Goals: Income and GDP Growth
PM Ishiba announced ambitious structural goals: ¥1,000 trillion nominal GDP by 2040 and a 50% rise in average income. That implies sustained 3% growth — far above Japan’s post-bubble trend. Policies include tax incentives for wage hikes, support for women, and increased skilled immigration. Very bold.

Countdown to Double Election
This week is make-or-break. If the opposition submits a no-confidence motion before the Diet session ends (Friday), it could trigger a Lower House dissolution and double election. Ishiba hinted he would preemptively dissolve the House if challenged — but there’s no consensus among opposition parties. Watch this space.

Tokyo Metro Elections Begin
The 9-day campaign started Friday with 295 candidates vying for 127 seats across 42 districts. Noise is high: one campaign car per candidate means bullhorns blaring through neighborhoods. This is the most crowded race since 1989 and could signal voter mood ahead of the national contest.

Expo Osaka and Diplomatic Traffic
Now in its second month, the Expo is seeing heavy foreign leader traffic — and logistical strain. Leaders from countries with pavilions are visiting Japan, further loading Ishiba’s already full schedule. Rumors swirl that Trump or VP Vance may attend in July, boosting LDP visibility.

Q&A Highlights

· How does the finalized merger between US Steel and Nippon Steel impact tariffs on Japanese steel?

· Could Japan’s large U.S. bond holdings be used as leverage in trade talks?

· Will Trump extend the July 9 tariff deadline for Japan and allies?

· What’s the likelihood of a double election this summer?

· Has Japan resumed oil purchases from Russia? How was that achieved? What are the implications?

· What was the real purpose of Akie Abe’s visit to Moscow and meeting with Putin?

We’re truly at a political crossroad: this week the Diet closes, the G7 summit, and the final moments of the Tokyo campaign, the ongoing Tariff talks. These could shape Japan’s political landscape for the rest of the year. All eyes are now on tariffs, diplomacy, rice, and whether Ishiba dare call a double election. The stakes are high, and the LDP is betting big. Let’s see if it pays off.

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