Japan heads to polls in key test for PM Ishiba
Japan's Prime Minister Shigeru Ishiba, leader of the Liberal Democratic Party (LDP), raises his fist from atop the campaigning bus on the last day of campaigning for the July 20 upper house election, in Tokyo, Japan July 19, 2025. REUTERS/Manami Yamada
TOKYO - Japanese voters could unleash political turmoil as they head to the polls on Sunday in a tightly contested upper house election, with rising prices and immigration concerns threatening to weaken Prime Minister Shigeru Ishiba's grip on power.
Opinion polls suggest Ishiba's Liberal Democratic Party and coalition partner Komeito may fall short of the 50 seats needed to retain control of the 248-seat upper house of parliament in an election where half the seats are up for grabs.
The polls show smaller opposition parties pushing for tax cuts and increased public spending are set to gain, among them the right-wing Sanseito, which vows to curb immigration, oppose foreign capital inflows and reverse gender equality moves.
A poor showing by the coalition could shake investor confidence in the world's fourth-largest economy and disrupt critical trade talks with the United States, analysts said.
Ishiba may have to choose between making way for a new LDP leader or scrambling to secure the backing of some opposition parties with policy compromises, said Rintaro Nishimura, an associate at the Asia Group in Japan.
"Each scenario requires the LDP and Komeito to make certain concessions, and will be challenging, as any potential partner has leverage in the negotiations."
After the election Japan faces a deadline of August 1 to strike a trade deal with the United States or face punishing tariffs in its largest export market.
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Such import levies could squeeze the economy and further pressure the government to give financial relief to households already reeling from inflation, such as a doubling of rice prices since last year.
With an eye on a jittery government bond market, the LDP has called for fiscal restraint, rejecting opposition calls for major tax cuts and welfare spending to soften the blow.
Ishiba's administration lost its majority in the more powerful lower house in October.
As the LDP's worst showing in 15 years, the outcome roiled financial markets and left the prime minister vulnerable to no-confidence motions that could topple his administration and trigger a fresh general election.
Ruled by the LDP for most of the post-war period, Japan has so far largely avoided the social division and fracturing of politics seen in other industrialised democracies.
Voting ends at 8 p.m. (1100 GMT), when media are expected to project results based on exit polls. REUTERS
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Straits Times
6 hours ago
- Straits Times
Japan ditches historical rice curbs, with PM Ishiba's fate at stake
Sign up now: Get ST's newsletters delivered to your inbox The government's involvement in managing rice supply made for a tight demand-supply gap incapable of absorbing sudden upticks in demand. TOKYO – In a break from a decades-old policy, the Japanese government will encourage farmers to disregard a de facto cap on rice production and boost cultivation of the food staple, a step that could win support from the agriculture sector and soothe consumers' frustration over soaring living costs. 'We will shift our policy to increase rice production, so that we will be capable of responding to changes in demand and supply flexibly and comprehensively,' said Prime Minister Shigeru Ishiba in a ministerial-level meeting on Aug 5 that focused on securing a stable supply of rice. The move may give Mr Ishiba another mission that justifies staying in power – ignoring calls to step down after the ruling coalition's poor showing in an Upper House election in July. It could also spotlight agriculture minister Shinjiro Koizumi, who has been touted as a potential future prime minister, as Mr Ishiba's fate hangs in the balance. As part of the initiative, the government will also work to ensure rice paddies are passed on to future generations and urge farmers to seize export opportunities, Mr Ishiba said. Rice exports rose 22.6 per cent in the first half of 2025, as surging interest in Japanese cuisine led to an increase in the number of Japanese restaurants overseas. 'We will devote our efforts to drive a drastic expansion of exports to levels where we will be undeterred by even the new tariff measures imposed by the US,' said Mr Ishiba. Top stories Swipe. Select. Stay informed. Singapore 'She had a whole life ahead of her': Boyfriend mourns Yishun fatal crash victim Singapore Beauty industry consumers hit by 464% rise in prepayment losses in first half of 2025 Singapore Doctor hounds ex-girlfriend, threatens to share her intimate photos, abducts her from public street Singapore 13 taken to hospital after accident involving SBS buses, car in Tampines Singapore New cargo handling centre at Changi Airport reduces processing time; test bed for future T5 ops Singapore 60 lactation pods to be set up in public spaces by Q1 2026 for breastfeeding mothers Life Urinary issues: Enlarged prostate affects half of men in their 50s and up Singapore Elderly man charged after he allegedly molested, performed sex act on 'vulnerable' man The shift in policy may be welcomed by farmers, some of whom have bristled at being whipsawed by pressures to limit rice production as well as by government intervention in rice prices. Currently, the government provides subsidies meant to encourage farmers to limit rice cultivation by switching to other crops. The system keeps a floor under rice prices. The government's involvement in managing rice supply made for a tight demand-supply gap incapable of absorbing sudden upticks in demand. Increasing production indicates a shift in that policy, and could help avoid the kind of sudden steep rise in rice prices seen in the past year. Whether a new approach will have broader appeal to a public that punished the ruling Liberal Democratic Party and its partner Komeito in July's election isn't clear. Anger over persistent growth in living costs was a key factor in the outcome, which left the ruling coalition without a majority in either house of Parliament. Mr Ishiba still faces pressure from within the party to stand down after that dismal showing. The party is set to discuss the results of the election and the prime minister's fate at a plenary meeting on Aug 8. Despite the calls for his head, Mr Ishiba has maintained he will hang on to his post to see his policies through, including the implementation of the US trade deal. A poll conducted over the weekend by broadcaster JNN showed that 46 per cent of respondents thought a loss of faith in the LDP was the cause of their election loss, while 20 per cent thought the defeat was caused by Mr Ishiba's government, suggesting that respondents were disillusioned with the party but not necessarily Mr Ishiba himself. The same poll showed that while 43 per cent thought Mr Ishiba should quit, 47 per cent did not think he should. Over the past couple of years, rice has become a symbol of how inflation is weighing on household expenses as real wages fail to keep pace with soaring costs. The nation's key inflation gauge reached 3.3 per cent in June, led by surging food prices. While rice prices doubled from a year earlier in the spring, the gains have moderated somewhat since the government channelled emergency stockpiles into the market. The new approach signals a shift from the government's decade-long involvement in managing rice supply to ensure prices didn't drop and farmers stayed in business. The policy was initially implemented in the 70s to manage oversupply. It has since been officially phased out, but the government still intervenes. In addition to the incentives to grow crops other than rice, the government provides a 'target' rice supply that many farmers comply with, effectively capping rice production. BLOOMBERG
Asia News Network
10 hours ago
- Asia News Network
Japan PM Ishiba states negative view on issuing written Japan-US agreement on tariffs
August 5, 2025 TOKYO – Prime Minister Shigeru Ishiba expressed a negative view about issuing a written agreement between Japan and the United States regarding U.S. tariffs during Diet deliberations on Monday. Attendees of the House of Representatives Budget Committee, including the prime minister, held intensive discussions on issues such as Japan-U.S. tariff negotiations. While having a negative stance on a written agreement, Ishiba stressed his willingness to devote himself to lowering tariffs on automobiles, which were not mentioned in an executive order by U.S. President Donald Trump. Regarding measures against high prices, Ishiba indicated his intention to hold discussions between the ruling and opposition parties. During the deliberations, Constitutional Democratic Party of Japan President Yoshihiko Noda expressed concerns about the absence of a written agreement, saying, 'The Trump administration might interpret it broadly, and Japan could continue to be ripped off.' In response, Ishiba said, 'I am most concerned that creating a document will delay the reduction of tariffs.' He then vowed to focus on reducing the tariffs steadily. Economic revitalization minister Ryosei Akazawa, Japan's chief tariff negotiator, made similar remarks in the Diet deliberations. 'We will urge the United States to take prompt measures to ensure the steady implementation of the agreement,' he said. When Yuichiro Tamaki, leader of the Democratic Party for the People, asked Ishiba how long he would stay in office, the prime minister said: 'We must see whether businesses will suffer any disadvantages as a result of the Japan-U.S. agreement. So I can't say for certain how long that will be.' The deliberations then shifted to measures to combat prolonged high prices. Noda suggested talks between the ruling and opposition parties on the introduction of income-tax cuts combined with cash payouts. Ishiba agreed to hold discussions and said, 'I would like to find an opportunity to discuss social security as well.' On corporate and group donations to political parties, Noda called for discussions to find common ground based on a proposal put together by Komeito and the DPFP. Ishiba was positive about the idea saying, 'It is very meaningful for the leaders of the first and second parties [the LDP and the CDPJ] to discuss this issue.' The ruling and opposition parties have agreed to abolish the provisional gasoline tax by the end of the year, and their talks on the matter have begun. 'The government will do everything it can to achieve this steadily and promptly,' Ishiba said in response to a question from LDP member Takashi Yamashita. Meanwhile, Ishiba said it was important for him to release comments expressing his view on World War II for the 80th anniversary of the war's end this year in order 'not to allow memories of the war to erode.'
Business Times
14 hours ago
- Business Times
Some in Bank of Japan saw scope to hike rates if trade friction eases, June minutes show
[TOKYO] Some Bank of Japan policymakers saw scope to resume interest rate increases once trade friction caused by US tariffs eased, minutes of the bank's June meeting showed, a sign Tokyo's recent trade deal with Washington cleared a key hurdle for more hikes. At the June meeting, many members said the central bank must keep interest rates steady due to downside risks to the economy from US tariffs, the minutes showed on Tuesday. But they also saw inflation overshooting expectations, with some warning that recent rises in food costs could affect public perceptions on future inflation, the minutes showed. 'Given high uncertainties, the BOJ would likely pause rate hikes for the time being. But it also must respond flexibly and nimbly, and return to a rate-hike phase depending on US policy developments,' one member was quoted as saying. Another member said the BOJ might need to raise rates decisively even when uncertainty remained high, given the fact inflation remained higher than expected. 'As wages had been solid and prices had been slightly higher than expected, the Bank would likely shift away from the current wait-and-see approach and consider resuming rate hikes, if trade friction de-escalates,' a few members were quoted as saying. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The remarks highlight the board's growing attention to upside inflation risks, which led the BOJ to signal its readiness to keep raising rates even as US tariffs clouded the economic outlook. At the June 16-17 meeting, the BOJ kept interest rates steady at 0.5 per cent and decided to decelerate the pace of its balance sheet drawdown next year, signalling its preference to move cautiously in removing remnants of its massive stimulus. The impact of US tariffs was the focus of debate at the June meeting, which was held before Japan clinched a trade deal with the US in July and won cuts to hefty tariffs. While one member cautioned that it would take some time to gauge the impact of US tariffs on corporate earnings, some said the hit to growth from the higher levy could be smaller than initially expected, the minutes of the June meeting showed. Japanese companies appear to have shed their long-held view that wages and prices must be kept low, one member said, adding the focus would be whether firms would keep hiking pay even if their profits are squeezed by US tariffs. 'I'm paying attention to the fact we're seeing home-made inflation emerge, as seen in rising wages driven by labour shortages,' another member was quoted as saying. In deciding on next year's bond taper plan, some in the board also saw the need to scrutinise the desirable size of the BOJ's balance sheet in the long run, the minutes showed. While one member said it was desirable for the BOJ to eventually reduce monthly bond buying to zero, another said a cut to around 1 trillion yen (S$8.8 billion) would suffice, the minutes said. The central bank is currently tapering bond buying so that monthly purchases slow to around 3 trillion yen by March 2026. In an extended taper plan decided in June, the BOJ expects monthly purchases fall to around 2 trillion yen by March 2027. The BOJ kept interest rates steady at a subsequent meeting on July 30-31. But it revised up its inflation forecasts and offered a less gloomy outlook on the economy, keeping alive the possibility of a resumption in rate hikes this year. REUTERS
