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Japan Today
2 days ago
- Business
- Japan Today
Rice prices are Japan's hot political issue, on and off the farm
By Kyoko HASEGAWA All is calm at Satoshi Yamazaki's rice farm, with its freshly planted rows of vivid-green seedlings, but a row over the cost of the staple in Japan is threatening to deal the government a blow at the ballot box. Shortages of the grain caused by a supply chain snarl-up have seen prices almost double in a year, fuelling frustration over inflation -- and voters could let their anger be known in upper house elections due next month. To help ease the pain for consumers and restaurants, the government started tapping emergency stockpiles in March, having only previously done so during disasters. Yamazaki, who grows about 10 percent of his rice organically using ducks to eat pests, said he understands high prices are "troubling" for ordinary people. But he stressed that thin profits are a concern for many of those who produce it. "There's a gap between shop prices and what farmers sell rice for to traders and the like," he told AFP in the northern Niigata region. "Not all the money paid at shops becomes our income," said Yamazaki, a 42-year-old father of seven. A mosaic of factors lies behind the shortages, including an intensely hot and dry summer two years ago that damaged harvests nationwide. Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say. The issue was made worse by panic-buying last year prompted by a government warning about a potential "megaquake" that did not strike. Meanwhile, the rising price of imported food has boosted the popularity of domestic rice, while record numbers of tourists are also blamed for a spike in consumption. Farm minister Shinjiro Koizumi has pledged to cut prices quicker by selling stockpiled rice directly to retailers -- attracting long queues to some shops. It appears to be working: the average retail price has edged down for a second week to 4,223 yen for five kilograms, down from a high of 4,285 yen in May. That hasn't stopped opposition politicians -- with an eye on the elections -- and online critics branding the reserve rice "old", with some likening it to animal feed. But analysts also blame Japan's decades-old policy of cutting rice-farming land. The policy was introduced to support prices that were being hit by falling demand brought about by changes in the Japanese diet. Under the 1971 policy, farmers were told to reduce the amount of space used to grow the grain in favor of other crops. That saw the amount of land used for rice paddies -- not including for livestock feed -- plunge below 1.4 million hectares in 2024, from a peak of 3.3 million hectares in 1960. While the policy was officially abolished in 2018, it has continued in a form of incentives pushing farmers towards other commodities like soybeans. Adding to the crisis is Japan's aging population. Many rice farmers are old and their children have no interest in taking over. Eighty percent of rice farmers are part-time with less than two hectares of fields but they account for only 20 percent of production, said agronomy expert Kazunuki Oizumi, professor emeritus of Miyagi University. Their main revenue comes from other jobs or pensions, he added. Toru Wakui, chairman of a large-scale farm in the northern Akita region who has for decades fought against the acreage reduction, said Japan should "seek an increase in rice production and exports to foreign markets". "If you only think about the domestic market while increasing output, of course prices will fall," he told AFP. "We need to look for markets abroad." "The 55 years of acreage reduction destroyed Japan's agriculture," said Wakui, 76, who urged Koizumi in a letter last month to "declare an expansion in rice production". He also said Japan should consider a scheme to help young people start agriculture businesses without the burden of initial investment in fields and machinery, by involving other sectors including banks and trading companies. Public support for Prime Minister Shigeru Ishiba's government has tumbled to its lowest level since he took office in October, which local media say was partly caused by the surge in inflation and soaring rice costs. He has told parliament that increasing production is "an option" to temper prices, but said food security and the livelihood of producers was also important. For the farmer Yamazaki, "wanting cheap rice with high quality" is a pipe dream. "We farmers are a little baffled by the limelight that suddenly shifted to us," he said. "But I think it's a good opportunity for the public to think about how rice is produced." © 2025 AFP
Japan Today
13-05-2025
- Automotive
- Japan Today
Nissan posts ¥670.9 bil annual net loss
Like many peers, Nissan is finding it difficult to compete against Chinese electric vehicle brands By Kyoko HASEGAWA and Tomohiro OSAKI Nissan Motor Co posted an annual net loss of 670.9 billion yen ($4.5 billion) on Tuesday while saying it plans to cut 15 percent of its global workforce and warning about the possible impact of U.S. tariffs. The heavily indebted carmaker, whose mooted merger with Honda collapsed this year, is engaged in an expensive business restructuring plan. "Nissan must prioritize self-improvement with greater urgency and speed," CEO Ivan Espinosa told reporters. "The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging." Its worst ever full-year net loss was 684 billion yen in 1999-2000, during a crisis that birthed its rocky partnership with French automaker Renault. On Tuesday, Nissan did not issue a net profit forecast for the 2025-26 financial year, only saying that it expects to see sales of 12.5 trillion yen. "The uncertain nature of U.S. tariff measures makes it difficult for us to rationally estimate our full-year forecast for operating profit and net profit, and therefore we have left those figures unspecified," Espinosa said. Nissan's shares closed three percent higher Tuesday after reports, later confirmed by the company, that it planned to slash a total of 20,000 jobs worldwide. "We wouldn't be doing this if it was not necessary to survive," Espinosa said of the cuts. Nissan, as part of recovery efforts, also said it would "consolidate its vehicle production plants from 17 to 10 by fiscal year 2027". "In China, we will strengthen our market performance by unleashing multiple new-energy vehicles," it added. Like many peers, Nissan is finding it difficult to compete against Chinese electric vehicle brands. A merger with Japanese rival Honda had been seen as a potential lifeline but talks collapsed in February when the latter proposed making Nissan a subsidiary. Espinosa said Tuesday that Nissan remained "open to collaborating with multiple partners", including Honda. Nissan has faced numerous speed bumps in recent years -- including the 2018 arrest of former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box. The automaker, whose shares have tanked nearly 40 percent over the past year, appointed Espinosa CEO in March. Ratings agencies have downgraded the firm to junk, with Moody's citing its "weak profitability" and "ageing model portfolio". And this month Nissan shelved plans, only recently agreed, to build a $1 billion battery plant in southern Japan owing to the tough "business environment". Of Japan's major automakers, Nissan is likely to be the most severely impacted by U.S. President Donald Trump's 25 percent tariff on imported vehicles, Bloomberg Intelligence analyst Tatsuo Yoshida told AFP ahead of Tuesday's earnings report. Its clientele has historically been more price-sensitive than that of its rivals, he said. So the company "can't pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units", he added. © 2025 AFP
Japan Today
01-05-2025
- Business
- Japan Today
Tariffs prompt Bank of Japan to lower growth forecasts
By Kyoko HASEGAWA The Bank of Japan revised down its growth forecasts and held interest rates steady on Thursday, warning that trade tariffs are fuelling global economic uncertainty. Since taking office in January, U.S. President Donald Trump has embarked on a hardball campaign to rectify what he says are unfair trade imbalances. His administration has imposed hefty levies on trading partners and imports including steel and automobiles. "The introduction of wide-ranging tariffs is expected to impact global trade activity," Japan's central bank said, without mentioning the United States directly. "Heightened uncertainties regarding policies including tariffs are likely to have a large impact on business and household sentiment around the world and on the global financial and capital markets." The BOJ said it now expects Japan's gross domestic product (GDP) to rise 0.5 percent in fiscal 2025, which started in April -- down from its previous estimate of 1.1 percent. In fiscal 2026, it expects GDP in the world's fourth largest economy to expand 0.7 percent, down from 1.0 percent previously forecast. "Japan's economic growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors," the bank said. However, "factors such as accommodative financial conditions are expected to provide support" and "thereafter, Japan's economic growth rate is likely to rise". The BoJ's decision to stand pat on interest rates -- holding them at around 0.5 percent -- following a two-day policy meeting had been widely expected. Bank officials began lifting borrowing costs last year after nearly two decades of ultra-loose monetary policies aimed at kick-starting torpid economic growth in Japan. Its key rate is still much lower than the U.S. Federal Reserve's 4.25-4.5 percent and the Bank of England's 4.5 percent. Masamichi Adachi and Go Kurihara of UBS said ahead of the BoJ policy meeting that "market fragility and uncertainty in the global economy due to the U.S. tariff/trade policies" would lead the BOJ to hold rates. Analysts including Marcel Thieliant from Capital Economics said more interest rate increases could still be on the table later this year. "We believe that the trade war won't be as damaging as feared and we're sticking to our forecast of another rate hike in July," Thieliant said. Japanese tariff talks envoy Ryosei Akazawa will hold a second round of negotiations later Thursday in Washington, seeking to secure relief from the trade levies. "Fruitful negotiations between Washington and Tokyo to mitigate the impact of tariffs on exporters may help Japanese policy makers in hiking interest rates," Katsutoshi Inadome at SuMi TRUST said. Eyes are now on bank governor Kazuo Ueda's press conference Thursday afternoon and how he addresses the question of accelerating Japanese inflation. Excluding fresh food, consumer prices rose 3.2 percent in March year-on-year compared to 3.0 percent in February, above the BOJ's longstanding target of two percent. © 2025 AFP
