TIME Japan

Japanese Prime Minister Defends Abenomics Ahead of Elections

Shinzo Abe
Japan's Prime Minister Shinzo Abe speaks during a press conference at his official residence in Tokyo on Nov. 18, 2014 Shizuo Kambayashi—AP

The vote will test public confidence in the prime minister's set of economic reforms

Japanese Prime Minister Shinzo Abe on Monday took on the leaders of six opposition parties in a debate marking the start of the official campaign season for this month’s elections. The polls are widely seen as a referendum on the incumbent’s economic policies.

Abe had in November called snap elections for the next month to let voters weigh in on so-called Abenomics — a package of reforms to boost the Japanese economy — after Japan dipped into recession and stoked fears that the reforms were unsuccessful, the Associated Press reports.

The incumbent prime minister is expected to easily come out of the elections with a four-year mandate to helm Japan and press onward with Abenomics, despite Moody’s cutting Japan’s credit rating this week.

Critics of Abenomics have castigated the policies as supporting just big businesses and the well-heeled. Abe has said it will take time to see the full benefits of the reforms, which seek to end deflation.

TIME Japan

Strong Quake Strikes Central Japan’s Nagano City

(TOKYO) — A strong earthquake struck central Japan on Saturday night, causing at least one building to collapse and injuring several people, according to Japanese media reports. No tsunami warning was issued.

The magnitude-6.8 earthquake hit parts of Nagano city and surrounding areas the hardest, the Japan Meteorological Agency said. The U.S. Geological Survey measured the quake’s magnitude at 6.2.

The earthquake struck at 10:08 p.m. Japan time (1308 GMT) at a depth of 10 kilometers (6 miles), but since it occurred inland, there was no possibility of a tsunami. An apparent aftershock with a magnitude of 4.3 followed about 30 minutes later.

Japan’s Kyodo news agency, citing fire officials, said several people reported injuries, and at least one building collapsed. It wasn’t clear whether the injured were at the building.

National broadcaster NHK reported that a landslide blocked a road after the quake struck. NHK also said 200 homes were without power, and that Shinkansen bullet train service in the area was temporarily suspended.

TIME Japan

Japan’s Lower House Dissolved for Snap Election

Shinzo Abe
Japan's Prime Minister Shinzo Abe speaks during a press conference at his official residence in Tokyo on Nov. 18, 2014 Shizuo Kambayashi—AP

The snap poll has puzzled many voters, as Shinzo Abe has been Prime Minister for only about two years

(TOKYO) — Prime Minister Shinzo Abe dissolved the lower house of Japan’s parliament Friday, paving the way for a general election next month.

The move is widely seen as an attempt by Abe to shore up support for his government after a series of finance-related scandals hit his newly named Cabinet this fall.

His ruling Liberal Democratic Party, which has been in power for most of the post-World War II era, may lose some seats but is likely to retain a solid majority with its coalition partner in the 480-seat lower house.

The election, expected to be set for Dec. 14, follows Abe’s decision this week to postpone a planned increase in the consumption tax after the economy slipped into recession. He is portraying the election as a referendum on his economic revitalization policies, known as Abenomics, and the postponing of the tax increase.

The snap poll has puzzled many voters, as Abe has been prime minister for only about two years.

Analysts say it is perhaps the best timing for Abe to get a fresh mandate to try to ward off any possibility of the mounting scandals sending his government into a downward spiral.

The opposition parties are in disarray, the public’s focus is on the economy and few voters would oppose delaying a tax increase. In the first half of next year, Abe plans to tackle contentious issues that could erode support for his government, namely legislation to expand Japan’s military role and restart nuclear power plants.

TIME Japan

A Japanese Woman Has Been Linked to the Deaths of Six of Her Partners

The men all died shortly after starting a relationship with her

A Japanese woman, who has been linked to a series of mysterious deaths, has been arrested on suspicion of fatally poisoning her husband.

Sixty-seven-year-old Chisako Kakehi was arrested by Kyoto police on Wednesday. Japanese media say cyanide was found in the body of her 75-year-old husband, who died in Dec. 2013, one month after the couple was married, Associated Press reports.

But Isao Kakehi was just one of six men who came to untimely deaths shortly after marrying or beginning a relationship with the woman.

In 2012, cyanide was also found in the blood of her 71-year-old partner who died after falling off his motorcycle. According to Kyodo news service, the cause of death was attributed to heart disease.

Chisako Kakehi denies she had a hand in any of the deaths.

[AP]

TIME whaling

Japan Reduces Antarctic Whale Hunting Quota

Humpback whale in Antarctica
Humpback whale in Antarctica Getty Images

The policy will take effect for the 2015-2016 whaling season

Japan has cut its whale hunting quota down to 333 from 900, in response to international criticism over the practice, officials announced Tuesday.

“We will explain the new plan sincerely so as to gain understanding from each country,” said fisheries minister Koya Nishikawa, according to the Guardian.

The International Court of Justice ruled in March that Japan’s “research whaling” served as a front to allow the country to hunt and sell whale meat under a scientific exemption to international bans on hunting whales for commercial purposes. But the country maintains that it needs to hunt whales to set “safe levels of catch limits” and to determine the age of the population.

The new policy will take effect for the 2015-2016 whaling season. This year’s whaling season was canceled in response to the ICJ’s ruling.

[Guardian]

TIME Japan

Japan’s Abe Calls Early Election to Save His Grand Economic Plan

Japan's Prime Minister Shinzo Abe attends a news conference at his official residence in Tokyo
Japan's Prime Minister Shinzo Abe attends a news conference at his official residence in Tokyo on Nov. 18, 2014. Toru Hanai—Reuters

Second stage of VAT hike is put back by 18 months to allow the economy to haul itself out of recession again

Japanese Prime Minister Shinzo Abe called early elections and delayed by 18 months a second big hike in value-added tax, in an effort to rescue his floundering plan to revive the economy.

Abe told a press conference that he would dissolve parliament and call the elections for December 14, just 26 days from now. Under normal circumstances, his mandate would run for another two years.

The news comes only a day after the shock announcement that Japan’s economy fell into recession in the third quarter, failing to recover–even moderately–from a plunge in output that followed the first stage of a two-stage hike in VAT in April.

Figures released Monday had shown gross domestic product contracting by 1.6% in annualized terms, with all components of the economy falling short of what economists had expected.

Abe’s Liberal Democratic Party currently holds over 294 of the 425 seats in Japan’s lower house, making it likely that it will be hold on to an overall majority barring disasters. However, it is less likely to be able to keep the two-thirds majority that it currently enjoys by virtue of its coalition with the New Komeito Party.

That super-majority, which means it can overrule the upper chamber of Japan’s two-chamber parliament, has been vital for pushing through a radical three-pronged economic strategy–dubbed as ‘Abenomics’–for jumpstarting Japan out of a 20-year struggle with stagnation and deflation.

The strategy revolves around a massive monetary stimulus from the Bank of Japan, and a sharp, two-stage increase in tax on consumption to plug Japan’s yawning government deficit, and deregulation of a range of business activities.

The economy had initially responded well to the first “arrow” of that strategy, with the yen falling sharply and fears of deflation fading in response to the Bank of Japan’s stimulus. Exporters also benefited, with companies like Toyota Motor Corp. posting sharp increases in sales and raising its full-year profit forecast after two strong quarters. But the 5% increase in VAT killed all momentum in the domestic economy, sending both consumption and business investment into reverse all through the spring and summer.

With signs of the “deflationary mindset” returning, the Bank of Japan ramped up the printing presses again at the start of the month. Abe admitted that the first tax hike had hit consumption and said that going ahead with the second stage, initially planned for next October, would jeopardize Japan’s chances of winning its battle with deflation.

This article originally appeared on Fortune.com

TIME Japan

In Japan, New Okinawa Governor Pledges to Shut Controversial U.S. Air Base

JAPAN-US-POLITICS-MILITARY-POLLS
Former Naha mayor Takeshi Onaga speaks to reporters after winning the Okinawa gubernatorial election on Nov. 16, 2014, in Naha, the capital of Japan's Okinawa prefecture Jiji Press—AFP/Getty Images

Defeated governor Hirokazu Nakaima was elected on a promise to get rid of the Futenma air base but then changed his mind

The controversial proposal to relocate a U.S. military base on Japan’s Okinawa prefecture was dealt a blow Monday when an outspoken opponent of the plan was elected as the island chain’s new governor.

Takeshi Onaga won Sunday’s gubernatorial polls in a landslide and wants to get rid of Futenma air base altogether. Defeated incumbent Hirokazu Nakaima had agreed for it to move to a new location in the island’s north despite widespread public opposition.

“The governor’s decision in December of last year to endorse [the current government relocation plan] was proven wrong when I won this election,” said Onaga, reports the BBC.

The election result may prove a setback for Japanese Prime Minister Shinzo Abe who has pushed for stronger military ties with the U.S.

The U.S. military has been present in Japan since the end of World War II and currently boasts around 26,000 troops and several bases around the East Asian nation. But the 1995 gang rape of a 12-year-old girl by U.S. troops largely turned public opinion against the ongoing presence of American soldiers.

TIME Japan

Japan Sinks Into Recession (Again)

A man holding a shopping bag walks on a street at Tokyo's Ginza shopping district
A man holding a shopping bag walks on a street at Tokyo's Ginza shopping district on Nov. 16, 2014 Yuya Shino—Reuters

An unexpected contraction in quarterly GDP shows that Prime Minister Shinzo Abe’s radical economic program is badly broken

If anyone is still holding out hope that Abenomics — the unorthodox slate of economic policies named after their inspiration, Japanese Prime Minister Shinzo Abe — could rescue Japan from its two-decade slump, the news on Monday should dash it. The troubled economy surprised analysts by (once again) tumbling into recession. GDP in the quarter ended September shrank by an annualized 1.6% — far, far worse than the consensus forecasts. That followed a disastrous 7.3% contraction in the previous quarter. Speculation in Japan is that the bad results will push Abe to call a snap election only two years after taking office.

What’s going on in Japan is important for all of us. Since the economy is still the world’s third largest (after the U.S. and China), a healthy Japan could provide a much needed pillar to growth in a struggling global economy.

The current downturn is being blamed on a hike in the consumption tax, implemented in April to try to stabilize the government’s feeble finances, which slammed consumer spending. It is now expected that Abe will delay a further increase in that tax scheduled for next October. But the real causes lie much deeper — in the failings of Abe’s economic agenda.

The idea behind Abenomics was to boost the economy with massive stimulus from the Bank of Japan (BOJ) and the government combined with structural reform of the economy, or what has been called the third arrow. The problem is that we got the first two arrows, but not the third. While the BOJ kept its printing presses rolling, dramatically weakening the value of the yen, badly needed deregulation and market-opening has come extremely slowly. Some critical changes, like a loosening of labor laws, seem to be off the menu entirely. The result is that the actual potential of the economy has not been enhanced. Meanwhile, the welfare of the average Japanese family hasn’t improved either. Wages haven’t advanced much, while prices have increased.

If Japan’s situation proves anything, it is the limits of central bank policy to fix economies. Despite a torrent of cash infused into the economy through the BOJ’s “quantitative easing” or QE, Japan’s economy remains mired in slow growth and stagnant household welfare. That’s why it is hard to imagine that the BOJ’s October decision to increase its QE program will make a major difference. So that’s the takeaway for policymakers in the U.S. and especially a stumbling Europe: If you’re going to rely too much on central bankers to revive growth, you’re going to fail.

The question facing Abe is whether he can press ahead more quickly with important reforms, either in his current administration or after a fresh election, which his party will still mostly likely win. Based on his recent track record, we don’t have reason to be confident. But maybe one day Japan will give us a surprise — in a good way.

Read next: It May Be Too Late for Japan’s PM to Fix the World’s Third Largest Economy

TIME Japan

It May Be Too Late for Japan’s PM to Fix the World’s Third Largest Economy

Shinzo Abe
Japan's Prime Minister Shinzo Abe visits the Santa Lucia Hill Japanese Gardens in Santiago, Chile, on July 31, 2014 Luis Hidalgo—AP

Shinzo Abe is desperate to rescue his failing economic program, but he still hasn't done what's necessary

Tokyo is abuzz with speculation that Prime Minister Shinzo Abe is about to dissolve the Diet, as the country’s legislature is known, and call a snap election.

He by no means has to take such action. It has only been two years since his Liberal Democratic Party, or LDP, swept to power in a massive landslide, and the opposition is in such disarray that there is little doubt Abe would be returned to office in a new election. Nevertheless, Abe apparently feels the need for another vote of confidence from the public, likely in part to bolster support for his radical program to revive Japan’s economy, nicknamed Abenomics.

The problem is that it could already be too late. Abenomics is a failure, and Abe isn’t likely to fix it, no matter how many seats his party holds in parliament.

When Abe first introduced Abenomics, many economists — most notably, Nobel laureate Paul Krugman — believed the unconventional program would finally end the economy’s two-decade slump. The plan: the Bank of Japan (BOJ), the country’s central bank, would churn out yen on a biblical scale to smash through the economy’s endemic and destructive cycle of deflation, while Abe’s government would pump up fiscal spending and implement long-overdue reforms to the structure of the economy. Advocates argued that Abenomics was just the sort of bold action to jump-start growth and fix a broken Japan, and we all had reason to hope that it would work. Japan is still the world’s third largest economy, and a revival there would add another much-needed pillar to hold up sagging global economic growth.

However, I had my concerns from the very beginning. In my view, Japan’s economy doesn’t grow because there is a lack of demand. Pumping more cash into the economy, therefore, will not restart growth. Only deep reform to raise the potential of the economy can do that — by improving productivity and unleashing new economic energies. Unless Abe changed the way Japan’s economy works — and I doubted he would — all of the largesse from the BOJ would at best come to nothing. In a worst-case scenario, Abe’s program could turn Japan into an even bigger economic mess than it already is.

So far, Abenomics has disappointed. GDP shrank a hope-dashing annualized 7.1% in the quarter ending June. Inflation, meanwhile, is nowhere near the BOJ target of 2%, and is slowing. Nor has Abenomics brought significant benefits to the general populace. Job creation and wage increases are sluggish and, with prices increases, the welfare of the average salaried worker has suffered. Meanwhile, an increase in consumption tax earlier this year — made necessary by the need to shore up the government’s shaky finances — further burdened Japanese households and led to a drastic decline in consumer spending.

The response of policymakers has been to double down on Abenomics. On Oct. 31, the BOJ surprised markets by greatly expanding its unorthodox stimulus program, known as quantitative easing, or QE. As part of that, the BOJ will increase its annual purchases of Japanese government bonds by 60% to a staggering $700 billion. More of the same, however, will just have the same result: a short-term boost to sentiment with little lasting effect. In fact, the program is only perpetuating Japan’s bad habits. The extra BOJ cash is weakening the yen — the Japanese currency has tumbled by nearly 7% against the dollar just since the bank’s announcement — which hands Japan Inc. companies more competitiveness without forcing them to undertake any actual improvements.

The problem with Abenomics, therefore, remains the same. More yen printed by the BOJ can’t fix Japan on its own, and can’t replace the fundamental changes necessary to raise the economy’s potential growth. If anything, the BOJ’s latest action only buys Abe a bit more time to implement his pledged reform program, known at the “third arrow” of Abenomics.

So far, though, the third arrow has remained in his quiver. In June, Abe unveiled the latest elements of the plan, which included everything from lowering the corporate-tax rate to spur investment, to enlisting more women into the male-dominated workforce, and bringing further change to an unproductive and outdated agricultural sector. It would be unfair to say that Abe has made no progress on his promises. The number of working women, for instance, has been on the rise under his administration. But many important reforms remain stalled. Abe had announced the formation of “special economic zones,” which would be crucibles of experimentation with the deep deregulation necessary to spark entrepreneurship and investment, but their implementation has crept along at a glacial pace. Serious reform of the country’s distorted labor market seems to have slipped off the table. Abe is also foot-dragging on opening the economy to more competition by holding up the completion of the U.S.-sponsored Trans-Pacific Partnership free-trade pact over an unwillingness to expose Japan’s overly protected farmers to imports.

The big question is whether another election will somehow lead to faster reform. In theory, a fresh mandate could give Abe the added political clout he needs to press ahead more boldly. However, Abe already controls both houses of the Diet, so if he wanted to move more quickly on reform, he could. That has left some analysts wondering what difference an election may make. “A snap election could have the virtue of giving the government a stronger mandate as it struggles to push ahead with structural reform,” commented Mark Williams and Marcel Thieliant of research outfit Capital Economics. But since Abe’s party has already been in a strong position, “an election would not make much practical difference to his ability to get things done.”

Abe continues to insist he is a reformer and will follow through on his grand pronouncements. “Make no mistake, Japan will emerge from economic contraction and advance into new fields and engage in fresh challenges,” Abe recently wrote in the Wall Street Journal. “There is no reason for alarm.”

Alarm bells should be ringing in Tokyo, however. Even if Abe gets the “third arrow” in the air, it could still miss its target. Many of the reforms Japan needs will take years to implement. Meanwhile, the other two arrows of Abenomics may already be running their course. There was opposition within the BOJ to its latest decision to boost QE — an indication that the bank can’t be counted upon to keep the printing presses rolling forever. Nor can Abe dodge the need to stabilize the government’s debt and deficits indefinitely. The government’s debt is 240% of the country’s GDP — the largest among major advanced economies. He’s right now weighing whether or not to hike the consumption tax yet again. Imposing it could deal another blow to growth; postponing it would undermine what little credibility Abe had as a fixer of the nation’s finances.

In the end, repairing Japan requires more political will than Abe has shown. Maybe a new election will help him find it. But don’t hold your breath.

TIME Autos

Air Bag Manufacturer Behind Recalls Hid Flunked Safety-Test Results: Reports

A security guard stands by child seats, manufactured and displayed by Takata Corp. at a Toyota showroom in Tokyo, Nov. 6, 2014.
A security guard stands by child seats, manufactured and displayed by Takata Corp. at a Toyota showroom in Tokyo, Nov. 6, 2014. Shizuo Kambayashi—AP

The tests showed that Takata air bags could rupture, but the company waited four years to report the problem

Under-fire Japanese air bag manufacturer Takata reportedly hid the results of 2004 tests that revealed their products could rupture and cause injury or death.

Technicians involved in the secret testing of 50 Takata air bags were ordered to delete the data from their computers and dispose of the air bags used, two employees revealed to the New York Times.

The manufacturer reportedly only revealed the problems to regulators four years later.

Faulty air bags produced by the Tokyo-based firm have since led to the recalls of more than 14 million automobiles worldwide.

Read more at the New York Times.

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