Latest news with #BasicPolicyonEconomicandFiscalManagementandReform
Yomiuri Shimbun
18-07-2025
- Business
- Yomiuri Shimbun
Japanese Businesses Expanding Space-Related Operations; Government Making Plans to Increase Public Support
An increasing number of companies in Japan are making efforts to strengthen their operations related to outer space. This striking trend includes automakers, banks and other businesses with no prior connections to space. Startups are also joining the field one after another. However, competition is increasingly fierce, and for now the United States and China are the frontrunners. Japanese companies in the field will not flourish without cooperation between the public and private sectors. New possibilities In June, Honda Motor Co. became the first private company in Japan to successfully launch and land a reusable small rocket. To do this, the company used technology it had cultivated for projects such as developing self-driving vehicles. Honda R&D Co., a subsidiary of the automaker, was in charge of research and development of the reusable rocket. In an address given in Tokyo on July 8, Honda R&D President Keiji Otsu said emphatically, 'Space is a place of new possibilities.' Major companies in such fields as telecommunications and financial services are enhancing their space-related operations, and a growing number of startups are entering the field. According to research by the Spacetide Foundation, a general incorporated entity for promotion of space development, the number of startups in the space development field in 2025 was 109, an increase of about 40% from three years ago. ¥260 trillion market With space being used more and more in fields such as national security and telecommunications, related industries are expected to grow rapidly. The global market size for space businesses is predicted to exceed ¥260 trillion in 2035, about triple what it was in 2023. According to the Cabinet Office, the number of rocket launches conducted by the United States in 2024 was 153, while China had 66, putting those two countries at the head of the pack for use of space-related technology. Japan conducted only five launches last year. Many of the American rocket launches were for commercial purposes, as more than half were made by Elon Musk's company SpaceX, which uses reusable rockets to minimize costs. Cost and speed vital One issue that Japanese companies face is the high cost of conducting rocket launches. Mitsubishi Heavy Industries Ltd. aims to bring the cost of launching a rocket down to about ¥5 billion — half what it has been up to now — with its new primary rocket model, the H3, which it developed in cooperation with the Japan Aerospace Exploration Agency. The government's Basic Policy on Economic and Fiscal Management and Reform, approved by the Cabinet in June, stipulates that the nation's space development policies should be enhanced. It sets a goal of boosting the size of the domestic market to ¥8 trillion in the first half of the 2030s, double what it was in 2020. A senior official of an economy-related government entity pointed out that victory in space development goes to whoever is fastest. Thus whether Japan wins or loses in this field will come down to the speed at which projects can be commercialized. Spacetide's Representative Director Masayasu Ishida said, 'Many countries all over the world, not just the major ones, are trying to cultivate space-related industries. It is essential also for Japan to stimulate demand and acquire human resources, technologies and investment.'
Japan Forward
18-06-2025
- Business
- Japan Forward
Promise of Growth Economy Must Come with Specific Targets
The most important duty of the Shigeru Ishiba Cabinet is to get the Japanese economy back on track. Achieving robust growth should be its top priority. But it faces strong headwinds. Daily living conditions are deteriorating due to rising prices. Meanwhile, there is widespread business uncertainty due to the Trump tariffs. In this climate, the Cabinet adopted the Basic Policy on Economic and Fiscal Management and Reform on June 13. Its centerpiece is a call for wage increases, which, more than anything else, are seen as the key to this growth strategy. One goal is to defuse calls from opposition parties and the general public for tax cuts, including for the consumption tax. Overtly, the plan advocates for policies to increase wages over tax-cutting measures. To create a self-sustaining economy led by private demand, a new push is needed that reinforces the momentum for wage increases. Momentum for this has begun spreading to small and medium-sized enterprises. However, it needs to reach the degree where the country finally enjoys an economy in which consumers are no longer at the mercy of rising prices. In other words, we should aim for a growth-type economy in which rising wages provide the spark for consumption. In turn, that will spur growing corporate earnings and investment. Customers at a Tokyo supermarket look at the price tags of fruit. Such a course is perfectly reasonable. But whether the hoped-for increases in take-home pay will materialize is another matter. The idea is to entrench wage increases of about 1% above the rate of inflation over a five-year period. However, there is a turbulent economic atmosphere at both home and abroad at this time. Therefore, it is uncertain whether the momentum for wage increases at smaller companies can be maintained. Of course, everything cannot just be left to the private sector. Among other things, the outline calls for price shifting and the optimization of transactions designed to improve corporate productivity. It also includes measures to support wage increases, such as an increase in official prices for services like medical and nursing care. Nevertheless, these ideas are not really new. If the national government does not establish specific targets that can lead to concrete results, the promised "growth economy" will disappoint. Another notable element in the government's Basic Policy is the form that fiscal policy will take. It is retreating from its previous vow to get the central and local governments' combined primary balance into the black during FY2026. Instead, it's only promising to achieve that goal "as soon as possible, sometime during FY2026 or 27." The change resulted from economic measures implemented in the autumn of 2024, which increased government spending. Of course, the government should not become so fixated on targets that it hesitates to spend when it is really needed. However, it must recognize that fiscal demand will grow if it is to maintain social security and strengthen defense capabilities. Therefore, the government should not neglect its efforts to achieve its avowed targets. We now find ourselves back in a world where interest rates matter. As a consequence, the environment is no longer very conducive to the issuance of government bonds. There is also a risk that interest rates will rise sharply if the market loses confidence in the Japanese government's fiscal management. A House of Councillors election set for this summer is fast approaching. Therefore, there is mounting pressure on the ruling and opposition parties to raise spending. The politics of the measures candidates push must therefore be kept firmly in mind. (Read the editorial i n Japanese .) Author: Editorial Board, The Sankei Shimbun
Yomiuri Shimbun
16-06-2025
- Business
- Yomiuri Shimbun
Basic Economic, Fiscal Policy: No Clear Strategy for Strengthening Economy
Prime Minister Shigeru Ishiba's Cabinet has compiled its first comprehensive growth strategy, but it is hard to see a path to strengthening the Japanese economy. The Cabinet should work out the details on concrete measures so that companies boost investment. The government has approved the Basic Policy on Economic and Fiscal Management and Reform, also known as the 'big-boned policy,' at a Cabinet meeting. Besides placing wage increases at the core of the growth strategy, the policy has for the first time set a numerical target of 'establishing a trend where real wages rise at about 1%,' in addition to a goal of higher nominal wages. However, one cannot help but feel that something is lacking. As soon as discussions got down to the details, the only policies that stood out were those that were rehashed from the previous administration of former Prime Minister Fumio Kishida. The government listed measures such as expanding investment in decarbonization and digitalization and support for artificial intelligence, cutting-edge semiconductors and emerging companies, but there was little that was new. Japan is attempting to shift from a cost-cutting economy that sells inexpensive products by keeping labor costs down to a growth-oriented economy where wages and investment both rise. However, wage increases have not kept pace with inflation, and real wages have been in a long decline, since the spring of 2022, so there has been a failure to achieve stable growth. Growth strategies have yet to produce tangible results. Households continue to struggle with high prices, and there is no sign Japan will be able to shed its sense of stagnation. Strategies for driving investment are likely key to strengthening the economy. Japanese firms' reserves have grown to about ¥600 trillion, which should be more than enough for investing. In its basic policy, the government sets new targets for domestic investment by the public and private sectors, hoping to grow the total to ¥135 trillion in fiscal 2030 and ¥200 trillion in fiscal 2040. The global economy is undergoing a period of major change, and it is time to formulate investment strategies. U.S. President Donald Trump's administration is moving ahead with protectionism through high tariffs, aiming to bring back manufacturing to the country, and this has put pressure on Japanese companies to rebuild their supply chains. How can Japan develop high-value-added factories in key industries such as the automotive and semiconductor and facilities such as data centers in a way that protects employment and leads to high growth? Close cooperation between the government and the private sector will be essential. In 2023, Japan's nominal gross domestic product fell behind Germany, making it the fourth largest economy in the world. Some predict that Japan will be overtaken by India in the not-so-distant future. The decline in national power has led to excessive weakening of the yen, reducing nominal GDP in dollar terms. The weak yen is also contributing to inflation, and causing the Japanese economy to stagnate. The nominal GDP is around ¥600 trillion at present, but the basic policy says that if the nation's economic growth continues to top 1% in real terms, 'a quadrillion-yen economy will come onto the horizon around 2040.' Unless the Ishiba administration revises its growth strategy, it will probably fail to achieve even this goal. (From The Yomiuri Shimbun, June 16, 2025)
Yomiuri Shimbun
14-06-2025
- Business
- Yomiuri Shimbun
Ishiba Cabinet Adopts Basic Policy Prioritizing Wage Hikes Over Tax Cuts; National Average Minimum Wage to Increase to ¥1,500 Later this Decade
The Yomiuri Shimbun Prime Minister Shigeru Ishiba speaks at a meeting held at the Prime Minister's Office on Friday. The Cabinet approved the Basic Policy on Economic and Fiscal Management and Reform on Friday. The basic policy states the government will 'pursue a policy of increasing wages over cutting taxes,' aiming to realize a growth-oriented economy through a real wage increase of about 1% per year. This marks the first time Prime Minister Shigeru Ishiba's Cabinet has adopted a basic policy, which outlines the future direction of the government's key policies. 'We'll aim to expand the overall economic pie and realize a growth-oriented economy in which people's wages and incomes continuously increase,' Ishiba said at a meeting of the Council on Economic and Fiscal Policy on Friday. As the House of Councillors election is set to be held this summer, calls for reducing consumption tax have been growing, mostly by opposition parties. In a move to apparently hold such calls in check, the Ishiba administration has emphasized its stance of placing importance on wage increases. In the draft version presented on June 6, the government's wording on wage increases and tax cuts was more direct. However, the wording is believed to have been toned down in consideration to ruling party lawmakers who called for tax cuts. In order to maintain growth amid a declining population, the government has decided it is necessary to realize a real wage increase of about 1% per year under stable price increases, thereby increasing private consumption and investment. The government also stated a policy of raising the national average minimum wage to ¥1,500 later this decade. Regarding rice prices, the government stressed its commitment to 'facilitating the distribution of rice, including government-stockpiled rice.' It also said it would work on developing a comprehensive approach that not only includes consumers but also producers and distributors. The basic policy also referred to reviewing a rice production policy, which effectively amounts to the reduction of rice paddy acreage. On achieving a surplus in the combined primary balance of the central and local governments, the target date has been moved back from fiscal 2025 to fiscal 2025-26. Regarding Japan's nominal gross domestic product, the government has set a target of about ¥1 quadrillion by around 2040. Ishiba said the target will be pursued while simultaneously trying to achieve the primary balance target. In addition to the basic policy, the Cabinet also approved Friday a revised version of its Action Plan for a New Form of Capitalism growth strategy, as well as its Regional Revitalization 2.0 basic initiative.
Yomiuri Shimbun
10-06-2025
- Politics
- Yomiuri Shimbun
Japan's Defense Ministry to Create Another Senior Vice Minister Post; Aims to Boost Emergency Response Capabilities
Yomiuri Shimbun file photo The Defense Ministry The Defense Ministry has decided to have two senior vice minister posts, according to several government and ruling-party sources. The move is aimed at bolstering the ministry's ability to respond swiftly to emergencies, such as natural disasters and North Korea's repeated ballistic missile launches. It will be written into the Basic Policy on Economic and Fiscal Management and Reform to be finalized later this month. Alongside the cabinet minister, the positions of senior vice minister and parliamentary secretary are the other two senior roles filled by political appointment. Many ministries, including the Internal Affairs and Communications Ministry and the Foreign Ministry, already operate with two senior vice ministers. At the Defense Ministry, either the minister or the senior vice minister is normally on standby in Tokyo in case crisis management is needed. In recent years, however, the security environment surrounding Japan has worsened and demand for Self-Defense Force disaster-relief operations has grown, increasing the burden of emergency response. After ironing out the details, the government plans to submit a bill to amend the National Government Organization Law, in which the number of senior vice ministers is stipulated, to the Diet.
