Japan's new system to manage 36.8 million tourists
The formation of this 'control tower' addresses concerns raised by residents regarding the rapid increase in foreign visitors and residents, including issues of crime and disorderly conduct.
Policies concerning non-Japanese residents have emerged as a key issue in the upcoming national election, with the number of foreign nationals in Japan reaching a record 3.8 million last year.
Prime Minister Shigeru Ishiba's Liberal Democratic Party has proposed measures for 'orderly and harmonious coexistence,' including stricter requirements for foreign nationals obtaining driver's licenses and buying real estate.
Public unease over the influx of foreigners has boosted the popularity of the populist Sanseito party, which advocates a 'Japanese First' agenda, potentially jeopardising the ruling coalition's majority in the upper house election.
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In his videos, ultra-nationalist and anti-globalisation rhetoric sits alongside health and wellbeing tips and conspiracy theories about Covid vaccines. Many of his 400,000 followers pay extra to access 'the real truth' about 'the deep state' and the sinister elite forces that he says are ranged against him. His online success led to the founding in 2020 of Sanseito, which in English he calls the 'Do It Yourself Party'. Sanseito claims to have 80,000 members and a YouTube channel with 270,000 subscribers. It has gradually begun winning seats in local and now national elections. 'The Japanese voter is not apathetic, as some tend to believe. If anything, they are highly committed and passionate about their communities and country and are very concerned about the direction Japan is heading,' he told The Japan Times last week. In keeping with many parties on the populist Right, the prospect of electoral success has prompted him to tone down the extremes and broaden his pitch. Like Farage, he's now offering tax cuts and social spending aimed at the lower end of the socioeconomic ladder, while also emulating Trump's approach to immigration in a stance he calls 'Japanese First'. Japan keeps a relatively tight grip on immigration. Foreign-born residents still comprise just 3pc of the population, compared with 16pc in Britain. But the number has grown sharply since 2010, as Japan's ageing society demands more workers it cannot find at home. There are 3.8m foreign-born people living there, predominantly from China, Vietnam, Korea and the Philippines. Kamiya talks about putting curbs on arrivals and time limits on how long skilled migrants can stay. He also wants more policing of immigrants who leave their approved work sites and 'turn to criminal organisations'. Ishiba is now playing catch-up. This week the prime minister announced a new agency to coordinate measures across government that would clamp down on foreigners' ability to do anything from obtaining a driver's licence to buying a house. He said the new so-called 'control tower' was being launched because 'the public feels uneasy and cheated'. Market jitters However, it's Kamiya's campaign to slash taxes that is worrying markets. In a country where government debt is already more than 200pc of GDP, the lavish spending pledges have foreign investors worried that Japan is in danger of driving its public finances off a cliff. Japan's 20-year and 30-year bond yields were this week at their highest levels this century and the 40-year yield hit a record. Even the benchmark 10-year yield was at levels last seen in the 2008 to 2009 financial crisis. The election couldn't come at a worse time for Prime Minister Ishiba. On Friday, he hosted Scott Bessent, the US treasury secretary, in Tokyo with President Donald Trump seemingly ready to give up on a trade deal and hit Japan with 25pc tariffs. If Trump targets Japanese exports and borrowing costs stay high, it will become more difficult to keep the economy growing – the easiest way to pay for extravagant promises. Ishiba's Liberals are making the most parsimonious offer to voters: a 20,000 yen handout to every man, woman and child, costing 3.5 trillion yen, or 0.6pc of GDP. But as his party slips in the polls, expectations are growing that he and his coalition partner party Komeito might fall short of the 50 seats required to maintain his upper house majority. 'The specific worry investors have with this election is that the governing coalition is likely to lose ground and may lose its majority – so it may have to take on a smaller third party that may require as its price tax cuts,' says Duncan Wrigley, of Pantheon Macroeconomics. 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The two most likely contenders – the Japan Innovation Party (Ishin) and the Democratic Party for the People – are demanding tax cuts that would cost 0.8pc and 2.4pc of GDP, respectively. Older voters are sticking with the Liberals, but younger Japanese are flocking to these fiscally free-wheeling alternatives. If Ishiba performs particularly badly in Sunday's upper house election, he may have to step down. That would make it near impossible for Tokyo to pull off a trade deal with Trump and would lead to months more of uncertainty – and potentially a general election. The biggest beneficiary could be Kamiya. Sanseito has only two of the 248 seats in the upper house and three in the 465-seat lower house. The polls suggest Kamiya might this weekend add between seven and 14 to that total. Even if Ishiba clings on to office and also lands a trade deal with Trump, voters' disaffection is unlikely to ebb. The economy is slowing, while inflation and interest rates are sticky. The population is ageing, wage growth is flat and cynicism about mainstream politics is growing. That's fertile ground for Kamiya – but less cheering for foreign bondholders. For now, investors hope Japan will muddle on. 'I feel that Japan's fiscal risks are somewhat overstated,' says Mizuho's Nakajima. 'There is a longer-term risk, but it might be 10 or 20 years away. It is not as if Japan is on the brink of fiscal collapse today or tomorrow.'
