Gaming the Consumption Tax Cut in Japan

Dispute over Takaichi’s Proposed Consumption Tax Cut

By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
August 6, 2026

Prime Minister Sanae Takaichi announced on July 30 that she would introduce legislation to reduce the consumption tax rate for food from eight percent to one percent. She hoped the reduction would take effect in April 2027 and continue for two years. The rate would return to eight percent in 2029. Although the national council she launched has not yet reached a consensus on this issue, Takaichi had before her two affordability options: a tax cut or a cash handout. Without meaningful discussion with others, Takaichi picked the former. Even some lawmakers in the ruling Liberal Democratic Party (LDP) opposed Takaichi’s arbitrary decision.

A consumption tax cut was originally a plank in the platform of the opposition parties for the Lower House election in February 2026. Recognizing its appeal to the voters, Takaichi took a similar approach for the LDP but with the cut limited to food and to a two-year period, after which the eight percent rate would return. A refundable tax credit would then be introduced. That was Takaichi’s plan.

After achieving victory in last February’s Lower House election, Takaichi launched the multi-partisan National Council for Social Security to discuss and implement her plan. Why social security? That is because revenue from the consumption tax is designed to be spent on social security. The Japan Communist Party and Sanseito were excluded from the council because they had opposed the refundable tax credit. The council had an arbitrary nature from the beginning.

The council failed to reach a consensus. The leading parties, supposedly backed by Takaichi, proposed a reduction in the consumption tax rate on food from eight percent to one percent and an additional cash handout equivalent to the remaining one percent of the consumption tax. The parties sought the same economic effect as the complete elimination of the consumption tax on food. The opposition parties demanded the opposite of what Takaichi later proposed: a cash handout rather than any reduction in the tax rate.

The interim report that the council submitted to Takaichi on July 29 was nothing more than an enumeration of opinions of the parties. They all at least agreed on a cash handout based on family income starting in fiscal year 2029. The council effectively turned down a refundable tax credit because a tax credit would require complicated reform of the taxation system. The council replaced the credit with a cash handout.

It was the next day when Takaichi decided to pick the brains of the leading parties. She advocated for a de facto moratorium on the consumption tax on food for two years and the introduction of another cash handout based on family income. Takaichi tends to make unilateral decisions, leaving minority opinion behind, when she fails to achieve a consensus on an important issue. This habit was seen in the reform of the Imperial House Law in which she insisted on patrilinear succession to the throne of the Emperor.

Takaichi requested the LDP to approve her tax reduction/cash handout plan by early August. However, multiple disputes arose in a meeting of the LDP Research Commission on the Tax System on July 31. One controversy is whether Japan has the fiscal resources to support a tax cut. The moratorium on the consumption tax cut for two years will cost ten trillion yen. Takaichi has not revealed a viable resource for her policy, only referring to some vague reform in spending.

This ambiguity about the fiscal resources for a consumption tax cut has already caught the attention of the markets, which are decidedly skeptical. Although Takaichi reiterated that the tax cut would not require the government to issue more bonds, the long-term interest rate hit a new high in these past three decades. The Japanese yen kept depreciating, inviting coordinated intervention by the governmental authorities of Japan and the United States.

At the meeting of the LDP, lawmakers erupted in frustration. “Finding a resource for the tax cut must be our promise to the voters,” said former Minister of Defense Tomomi Inada, calling for a cash handout instead of a tax cut. Other lawmakers referred to the difficulty in the resumption of the tax rate two years later. An immediate return to eight percent from one percent will mean a noticeable tax increase for taxpayers. “I’ll be responsible for the resumption of the tax rate,” said Takaichi, but no one can guarantee that she will still be the prime minister in 2029.

Having seen an abrupt drop in the approval rating for her cabinet, Takaichi is bent on a consumption tax cut, convinced that the policy can restore her popularity. But the discussion on the consumption tax rate is showing signs of political struggle.

Tomomi Inada is one of the female leaders who would be expected as an alternative to Takaichi. She firmly protested the bill for easing conditions for retrial that was proposed by the Ministry of Justice. Another possible female leader, former Minister of Economy, Trade and Industry Yuko Obuchi, stepped down as a core member of the LDP commission on the tax system. Both are frustrated with Takaichi’s arbitral process in deciding such highly important policy as consumption tax cut. 

This internal dispute on a single issue in the LDP reminds us of the sharp opposition over postal reform during Prime Minister Jun-ichiro Koizumi’s tenure in the early 2000s. Facing firm opposition from veterans in the LDP, Koizumi employed populism for his agenda backed by a high approval rate. He labeled those rivals “as protesting powers” against reform and accomplished the postal reform by ousting the protesters from the party. That was called “theater politics” in which a hero defeats bad guys. Can Takaichi be as clever as Koizumi in handling party politics?

The LDP officially approved Takaichi’s consumption tax cut plan on August 5. Takaichi’s allies in the party rallied for implementing her agenda. But some LDP lawmakers are still skeptical about cutting the consumption tax, which is a fiscal resource for welfare policies for aged people. There promises to be an intensive discussion on the tax cut bill in the fall session of the Diet.

Imperial Succession Undermined

josei tennō (女性天皇)

Takaichi Excludes Women from Becoming Emperor, Ignoring the Will of the People

By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
July 20, 2026

Prime Minister Takaichi has been aggressively trying to expand the male line of succession to the Imperial Throne, but she is doing so in a way that undermines the constitutional basis of the Imperial Family. On June 10, the House of Representatives of the Diet passed a bill that amends the Imperial House Law (IHL) to permit the adoption of males of former imperial families. The Upper House approved the bill on July 17.  The law gives the male offspring of the adopted male (but not the male himself) a place in the order of succession to the throne of the Emperor. 

Since only some but not all the opposition parties approved the bill, the amendments cannot be said to reflect the unanimous opinion of the legislative branch.

Unanimity is a key constitutional principle for the Imperial Family in Japan. Article 1 of the Constitution of Japan provides that the position of the Emperor is derived from the will of the people. The Japanese interpret this article to mean that the will of the people must be unanimous. When former Emperor Akihito abdicated the throne in 2019, the Diet attached a supplemental resolution on unanimity to the special law for the abdication.

That resolution required a discussion in the Diet to obtain a “unanimous opinion of the legislative branch” on stable succession to the throne. The resolution contemplated a unanimous opinion that would reverse the declining number of Imperial Family members. This year, the Speakers and Vice-Speakers of both Houses of the Diet held a brief discussion and wrapped up a “unanimous opinion” and handed it to Prime Minister Takaichi on June 10. The opinion allowed female members to remain in the Imperial Family after marriage and permitted the adoption of males of Imperial Family branches that had left the Family in 1947.

After delivery of the unanimous opinion, the Takaichi Cabinet proposed amendments to the Imperial House law to maneuver around the unanimity requirement in the 2019 supplemental resolution. The legislation includes two critical new measures relating to Imperial succession that were not part of the unanimous opinion.

One is to include the offspring of an adopted male in the line of succession to the throne. This amendment would codify Takaichi’s desire to maintain strict patrilinear succession. Not all males in the Imperial Family branches will qualify for adoption: eligible adoptees must be at least fifteen years old and cannot already be married or already have children. In the discussion of this provision in the Diet, members recognized that adoption of male members of the former Imperial Family would offset the current shrinkage in the Imperial Family. The unanimous opinion of the Diet did not include a discussion of the sons of an adopted male.

The second new element in the legislation is not to give the husband and children of female members that remain in in the family the status of Imperial Family members. These children could not in any case join the line of succession because they are in the female line. It is highly unusual for members of a family to be separated by legal status. Nevertheless, the draft recognizes only the mother as a member of the Imperial Family and excludes the father and the children. Again, this provision was not part of the unanimous opinion.

The Takaichi Cabinet submitted a draft of the revised IHL to the Diet on June 30. Takaichi asked the leading parties to make their best efforts to pass the bill in the current session of the Diet. The Committee on Rules and Administration of the Lower House discussed the bill for just three hours on July 10. The House Plenary Sittings passed the bill later that same day.

Notably, the top opposition party, the Centrist Reform Alliance (CRA), voted yes on the bill. The party had originally opposed the idea of placing the male offspring of an adopted male in the line of succession. After hearing the explanation by the Chief Cabinet Secretary, Minoru Kihara, in the committee to the effect that the revised IHL would not affect or bind future succession discussions in the Diet, the CRA changed its vote to yes. Under the bill, future discussions occur only at thirty-year intervals.

In protest of the CRA’s decision, four CRA lawmakers walked out of the Plenary Sittings. The Japan Communist Party (JCP) voted no on the bill, arguing that the bill had become totally different from the unanimous opinion of the legislative branch. Even the Japan Innovation Party (JIP), the Liberal Democratic Party’s (LDP) coalition partner, quibbled with the provision in the bill that limited adoptions of male members to those no younger than fifteen. It can hardly be said that the bill represents the unanimous opinion of the Diet.

On July 17, the Upper House in its Plenary Sittings passed the bill by a vote of 184 to 57 – obviously not a unanimous view.  

Looking at the voting in both chambers, six parties approved – the LDP, JIP, CRA, the Democratic Party for the People, Komeito, and Sanseito. Five opposition parties voted in the negative – the Constitutional Democratic Party of Japan, JCP, Reiwa Shinsengumi, the Social Democratic Party, and Okinawa Whirlwind. Team Mirai approved the bill in the Upper House but released its members in the Lower House to vote as they saw fit. Interestingly, the Conservative Party of Japan abstained.

It is still unclear why Takaichi has been so hasty in completing revisions of the IHL in the current session of the Diet. Popular sentiment is against the quick action. In the poll of Asahi Shimbun last month, 71 percent of respondents thought that legislation for adopting males in the male line did not need to be made soon. In a more recent Asahi Shimbun poll, 60 percent of respondents thought that the revised Imperial House Law had not received views of the people, while only 24 percent thought it had. 

The conservative lawmakers obviously hoped to maintain the imperial throne in the male line. It is likely that they wanted to act now while Takaichi enjoyed a high approval rating in the polls. They made it but possibly at the cost of that very approval rating. The same recent Asahi Shimbun poll revealed that the approval rating for the Takaichi Cabinet declined from 60 percent in June to 53 percent in July. The disapproval rose from 27 percent to 35 percent. This finding may reflect popular reaction to the part of Takaichi’s legislation that blocks the possibility of Princess Aiko becoming Empress.

In other results, a poll by Jiji Press found that 39.5 percent approved of placing the sons (and subsequent offspring) of an adopted male in the male line of succession, while 26.9 percent disapproved. 34.0 percent hoped to give Imperial Family status to the husband and children of a female family member who remained in the Imperial Family after marriage. A smaller number, 27.5 percent, did not.

Takaichi depends on conservative lawmakers for her political base. The vice president of the LDP, Taro Aso, is one of the greatest advocates for these revisions of the IHL. His younger sister is Princess Nobuko of Mikasa. Nobuko established a new family and separated from the Mikasa Family just two years ago, in 2025. According to the revised IHL bill, Nobuko could adopt a son whose offspring would be in the line of succession to the throne.

Looking back to Michinaga Fujiwara, who exercised great power in the Imperial Family in the eleventh century, former Prime Minister Yoshihiko Noda is worried that the Aso family might be Fujiwara in Reiwa era. Michinaga left a tanka, a famous verse: “I realize this whole world is mine, only I ignore the eclipse of the moon.” Takaichi needs to keep Aso as her guardian in the LDP.

Noda also asked the government to take seriously the fact that the IHL excluded adoption to avoid disruption of the imperial lineage. Eleven former imperial families that lost royal status in 1947 are 36 to 38 degrees away from reigning Emperor Naruhito. Naruhito and they must reach back some six hundred years to find their common ancestor. 

Takaichi will now be remembered as a prime minister who prized patrilinear succession over the legitimacy of the throne. 

Trading Places

Joshua Walker

Congratulations to Joshua Walker who leaves the presidency of the New York Japan Society at the end of July 2026 to become head of the US Chamber of Commerce's international affairs department. He has also been appointed the Center for the Study of the Presidency and Congress' David M. Abshire Chair. The Center works closely with many Japanese organizations researching trade and security issues. Expect Joshua to acquire many more honors and board appointments while at the Chamber.

He is joining Jay Sapsford, the Chamber's Senior Vice President for Global Intelligence. Jay worked as a reporter for The Wall Street Journal and as the chief of staff to the Morgan Stanley's Japan's country head. He was the Journal's Washington Deputy Bureau Chief prior to joining the U.S. Chamber of Commerce.

Like Joshua, Jay grew up in Japan as the son of Christian missionaries. Both men are fluent in Japanese. 

The Chamber has a history of hiring Japan hands for its senior leadership positions. The best known example was Stanton Anderson who was a close friend of the Chamber's longtime president Thomas J. Donohue (d. 2024). The New York Times identified Anderson as "Japan's most influential lobbyist in Washington." As an adviser to Donohue, Anderson helped shape the Chamber’s pro-free trade policies and strong stand on tort reform. Both remain important interests of Japanese companies in the U.S. He served as the Chamber’s executive vice president and chief legal officer from 2003 to 2010 as well as chairman of the Chamber’s Campaign for Free Enterprise. Never during his tenure as a Chamber official did he resign or recuse himself from his consulting firm, his law firm, or his Japanese clients. He remained of counsel to the DC law firm McDermott Will & Emery and on the board of consulting firm Global U.S.A. Mr. Anderson, 84, passed away on Sunday, January 12, 2025, at his home in Santa Barbara, California.

Asia Policy Events, Week of August 9, 2026

Asia Policy Point is on summer recess, like the U.S. Congress. We will, however, post some events weekly for our readers and members. If you want to receive these directly to your mailbox, you have to become a "member" of APP. An individual, nonshareable membership is only $105/year and includes our occasional papers of on Japanese politics and access to our office while visiting Washington. SIGN UP HERE.

WEEK OF AUGUST 9, 2026

8/9 - 1945. Atomic Bombing of Nagasaki.
8/11 - Mountain Day, National Holiday, Japan

8/12 - Demise of Prophet Muhammad and Martyrdom of Imam Hassan, National Holiday, Iran

8/14 - International Memorial Day for Comfort Women. On August 14, 1991, when South Korean Kim Hak-sun became the first to give a public testimony about her experience as a comfort woman victim.
8/14 - Taiwan's annual 10-day Han Kuang military exercise ends.

8/15 - 1945. Imperial Japan declares acceptance of the Potsdam Declaration and ceases combat activities. Possible visit to the war memorializing Yasukuni Shrine by Prime Minister Takaichi. She visited last year, but was not PM.

8/15 - Independence Day, National Holiday, South/North Korea. Day off 8/17.

8/15 – Annual Far Eastern Prisoners of War (FEPOW) Day in Taiwan hosted by Taiwan POW Camps Memorial Society.

BEYOND THE STRAIT: THE FUTURE OF GLOBAL ENERGY SECURITY. 8/11, 10:00-11:00am (EDT), VIRTUAL. Sponsor: Arab Gulf States Institute (AGSI). Speakers: Carole Nakhle, CEO, Crystol Energy, Secretary General, Arab Energy Club; Robin Mills, Non-Resident Fellow, AGSI, CEO, Qamar Energy; Adnan Shihab-Eldin, Senior Visiting Research Fellow, Oxford Institute for Energy Studies; Moderator: Kate Dourian, Non-Resident Fellow, AGSI, Contributing Editor, MEES, Fellow, Energy Institute.

AN UPHILL CLIMB: PUSHING FOR AN INCLUSIVE POLITICAL DIALOGUE IN AFGHANISTAN. 8/12, 10:00-11:00am (EDT), VIRTUAL. Sponsor: Center for a New American Security (CNAS). Speakers: Ambassador Nasir A. Andisha, Ambassador and Permanent Representative, Afghanistan to the UN in Geneva; Palwasha Hassan, Executive Director, Mina's List; Ambassador Earl Anthony Wayne, Former Deputy U.S. Ambassador to Afghanistan, Former U.S. Ambassador to Mexico and Argentina; Richard Bennett, UN Special Rapporteur on the Situation of Human Rights in Afghanistan; Annie Pforzheimer, Adjunct Senior Fellow, Indo-Pacific Security Program, CNAS.

ISRAEL AND THE U.S. IN A CHANGING LANDSCAPE: IS THE SPECIAL RELATIONSHIP FAILING? 8/13, 10:00-10:45am (EDT), VIRTUAL. Sponsor: Carnegie. Speakers: Aaron David Miller, Senior Fellow, American Statecraft Program; Yael Lempert, Vice President for Outreach, Middle East Institute; Daniel C. Kurtzer, Lecturer and S. Daniel Abraham Professor of Middle East Policy Studies, Princeton University; Shibley Telhami, Anwar Sadat Professor for Peace and Development, University of Maryland, College Park. 

AN OVERVIEW OF PUBLIC INTERNATIONAL LAW. 8/13, 1:00pm (EDT), VIRTUAL. Sponsor: Law Library, Library of Congress. Speakers: Law Library Staff. 

VISUAL ART REPRESENTATIONS OF WORLD WAR II IN THE PHILIPPINES: DIFFERENT PERSPECTIVES OF A SHARED TRAGEDY. 8/15, 4:00-6:00pm (PHT), IN PERSON ONLY. Sponsor: Ayala Museum, Manila, Philippines. Speaker: Jose T. Ricardo PhD, country's foremost scholar on the Second World War in the Philippines and the Asia-Pacific, specializes in military and diplomatic history, focus on the Japanese occupation of the Philippines. 

The Osaka Capital

JIP Drags Down the Diet

By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
July 26, 2026
 
The Diet finished its special session on July 25, approving the Backup Capital Act by a small margin in the Upper House at the last moment. The Liberal Democratic Party (LDP) was not eager to enact it. It was the LDP’s coalition partner, the Japan Innovation Party (JIP: Nippon Ishin-no Kai), that was the main supporter. The opposition parties suspected that JIP was pushing it solely for its own narrow interest. JIP’s persistence on the bill led to a confusing few days at the end of the session.
 
The Backup Capital Act is aimed at building an alternative “capital” of Japan to Tokyo, in case Tokyo suffers a major natural disaster. The law should also help decentralize businesses in Japan. A city interested in serving as a backup capital must meet several conditions, including a minimum population size, business concentration, or an agreement on coordination between the prefectural government and the city government. While some cities, such as Sapporo, Nagoya or Fukuoka, might qualify, Osaka is recognized as the leading candidate.
 
In connection with the Backup Capital Act, JIP has put another issue at the top of its reform agenda for the announced purpose of minimizing government expenditures.  This is the Osaka Capital Initiative, which would integrate the Osaka prefectural government with the Osaka city government. The integration would resemble the governmental system of the Tokyo metropolitan area. Appealing to the competitive sentiment of the people of Osaka against Tokyo, JIP sold the policy as making Osaka another capital of Japan.
 
Controlling the seats of the Osaka prefectural governor and the Osaka city mayor, JIP held two referendums on the Osaka Capital Initiative in 2015 and 2020, but the initiative was rejected by a small margin in both referenda. Although residents of the small cities in the Osaka prefecture supported the idea, those in Osaka city did not, because it seemed to have fewer benefits for them.
 
JIP has been looking for a third chance at the initiative. Their tactic is to connect the Osaka Capital Initiative with the Backup Capital Act, though the party leaders publicly explain that those two concepts are different. But the party has also explained that the Osaka Capital Initiative is a precondition for Osaka to be a backup capital and has declared a third referendum in the spring 2027. JIP’s leader and the governor of Osaka, Hirofumi Yoshimura, announced that he would resign as governor next spring and run again for election as his own successor. He plans to hold the election and the third referendum on the same day on the expectation that the initiative can ride his coattails.
 
Hence JIP’s enthusiasm for enacting Backup Capital Act in the special session of the Diet that closed on July 25. To have the “double voting” in Osaka next spring, the Diet had to pass the Act in this session. In a meeting with Prime Minister Sanae Takaichi on July 7, Yoshimura reconfirmed that the LDP and JIP would enact the Backup Capital Act in this session and that JIP would leave behind its effort to reduce seats in the Diet.
 
No party other than JIP had any interest in a backup capital. When the chairman of a committee in the Lower House, who was from JIP, unilaterally began discussion of the Backup Capital Bill in late June, the opposition parties boycotted all the discussions. The Diet spent a week normalizing its discussions. Even the LDP was reluctant to pass the backup capital bill within the current session.
 
Takaichi came to the rescue of the bill in the final phase of the Diet session with her personal support. Takaichi was indebted to JIP for its support of the National Flag Vandalism Punishment Act, which had been on her long-time political agenda. That statute was enacted on July 17. In return, Takaichi extended the term of the Diet session for 8 days and worked to pass the backup capital bill.
 
The opposition parties were adamantly opposed to the unilateral procedure used by the LDP and JIP to pass the bill in the Upper House -- where the two parties do not have a majority. Although the opposition parties demanded further discussion of the bill, the chairman of the committee, a member of the Constitutional Democratic Party of Japan, decided to finish discussion quickly and to take a vote on the bill. However, the chairman accepted a supplemental resolution to the bill that ruled out JIP’s planned double voting on the referendum and governor’s race. With this supplement, the bill was approved by a slight margin, supported by the LDP, JIP, Team Mirai and some independent lawmakers.
 
Yoshimura was not satisfied with the result. Holding votes for the third referendum on the Osaka Capital Initiative and for the Osaka gubernatorial election on the same day next spring is crucial for JIP to gain broad support from the voters. Immediately after the Diet passed Backup Capital Act, Yoshimura reiterated that he still planned to have the double vote next spring. The leader of Democratic Party for the People, Yuichiro Tamaki, accused Yoshimura of a lack of respect for the decisions of the Diet. What happens next spring in Osaka remains to be seen.
 
As seen in his unusually strong push for seat reduction in the House of Representatives, Yoshimura is too focused on his own agenda in Osaka to properly honor the Diet, which, after all, represents the whole interest of the people of Japan. The Osaka Capital Initiative is a typical populist issue to firm up the political base of the party, which is highly concentrated in Osaka. Thus, the Diet spent the last days of the extended session on enhancing JIP’s political fortunes – and those of Takaichi who relies on JIP’s support.

Takaichi’s Legislative Strategy Unites Opposition

Three Reasons for This Diet Session’s Unusual Procedure

By Takuya Nishimura, Senior Fellow, Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
July 21, 2026
 
The Diet decided to extend the term of the current special session for eight days with approval of the Liberal Democratic Party (LDP) and Japan Innovation Party (JIP). Although these leading parties have been trying to pass all the bills submitted by Sanae Takaichi Cabinet before the end of the term set on July 17, the boycott of discussions by the opposition parties made it impossible. The opposition parties accuse Takaichi of mismanaging the Diet. This abnormality was brought about by Takaichi’s arrogant administration of the Diet, JIP’s insistence on its own agenda, and the opposition parties’ unusual unification against leading coalition.
 
Takaichi’s Capriciousness
This is a very unusual session of the Diet. The ordinary session 2026 was convoked on January 23 and ended the same day because Takaichi dissolved the House of Representative to hold a snap election. After the Lower House election on February 8, the Takaichi administration set a special session. Although a special session is ordinarily convoked for a few days to elect a new prime minister, Takaichi set a 150-day term from February 18 to July 17 to discuss the fiscal year 2026 budget and tackle other critical issues. The Diet did not work between January 23 and February 17.
 
During the final weeks in the current session, Takaichi was unwilling to attend the Diet discussion. After opposition parties criticized her for defamation in her LDP presidential campaign last October, Takaichi refused to answer their questions in the Diet. The opposition parties, holding a majority in the Upper House, boycotted the Diet discussion in late June and early July. The leading parties were unable to pass all the bills by July 17, the regular end of the current session.
 
Takaichi prioritized passage of the revised Imperial House Law and the National Flag Vandalism Punishment Act in the final phase of the session. The LDP has not been active in extending the Diet session. Every year, lawmakers get back to their hometowns after the ordinary session to meet their supporters, to reinforce their political base, and to prepare for the next election. Extension of the Diet session will reduce their chances to cultivate their voters in the local districts.
 
The LDP nevertheless submitted a motion to the Diet to extend the term of the current special session for the passage of some important bills. The Diet Law provides that an ordinary session can be extended once and an extraordinary or special session twice. The LDP has a majority in the Lower House and not in the Upper House. If the two chambers of the Diet reach different decisions on an extension, the decision of the Lower House controls.
 
The extension of the current session for eight days was thus approved by the votes of   the LDP-JIP majority coalition in the Lower House. The opposition parties blamed the extension on Takaichi’s mismanagement of the Diet schedule. If she had not dissolved the Lower House, and if she had not refused the discussion on her defamation scandal, the parties would have had enough time to discuss all the bills. It was Takaichi who delayed the schedule.
 
JIP’s Insistence on Its Own Agenda
The opposition parties’ boycott of discussion was based on another reason. The leading coalition unilaterally decided to start discussion on the bills for reducing Lower House seats and for introducing a “backup capital” bill. Discussion on a bill usually starts with an overwhelming consensus among the parties. But in this case, the leading parties ignored the protest of the opposition parties. The two bills are strongly supported by JIP.
 
Established in 2012, the JIP had been a determined opposition party, pushing for political reforms. Forming the leading coalition with LDP led by Takaichi in 2025 changed everything. The JIP needed a cause to join the coalition and decided that reduction of Diet seats would be its top priority. JIP leader and the Governor of Osaka, Hirofumi Yoshimura, labeled the issue “political reform 101.” Yoshimura believed that the seat reduction would receive wide public support because it would lead to a reduction in governmental spending for the Diet.
 
Opposition parties had reason to oppose the bill. The bill includes the reduction of forty-five seats in the proportional districts of the Lower House. That reform of the election system would work against small opposition parties which are heavily dependent on proportional districts. It also did not make good sense for the House to reduce its seats at the initiative of the governor of Osaka. Not only the opposition parties but some lawmakers in the LDP were skeptical about the bill. Takaichi finally decided to postpone the seat reduction bill to the next session.
 
JIP still hopes to enact the Backup Capital Act in the extended term of the current session of the Diet. While the law enables local prefectures and cities to have stronger authority for governance as the Tokyo Metropolitan Government currently possesses, most lawmakers believe that the system of backup capital will help the Osaka Capital Initiative, which JIP has been promoting since its establishment.
 
Opposition parties have criticized JIP’s strong push for the bill, arguing that the law only benefits Osaka. They demand a detailed examination of the bill in the Diet, which requires weeks of discussion. Although the leading coalition passed the bill in the Lower House with the approval of Team Mirai, they have still not secured a majority in the Upper House. The leading parties have not yet decided whether to extend the term of the current session again.
 
If the LDP fails to enact the two bills for seat reduction and a backup capital, the JIP may lose its major cause for staying in the leading coalition with the LDP. Although the merits of leading coalition should be greater than leaving it, the JIP is worried about its political power shrinking, as they are growingly dependent on the LDP’s leadership. Voters in future elections may regard JIP as a supplemental group of LDP. It would be a major concern for the LDP whether the JIP stays or goes.
 
Unusual Unification of Opposition Parties
When the leading coalition unilaterally began discussion over the Lower House seat reduction and the Backup Capital Act, the opposition parties took united action to stop the unilateral procedure in the Diet. They requested impartial treatment of the bills by the leaders in both chambers. The possible crucial impact of seat reduction on small opposition parties made that concerted action possible.
 
The action included a wide range of parties. The highly conservative Sanseito and the far-left Japan Communist Party joined the frontline in protesting capricious management of the Diet by leading coalition. Adding to those two parties, the Centrist Reform Alliance (CRA), the Democratic Party for the People (DPP), and Team Mirai demanded that the chairman (from JIP) of a Lower House committee not start discussion on the seat reduction bill. When the chairman declared that discussion had begun, those opposition parties boycotted the committee.
 
Ironically, JIP’s push for a seat reduction bill unified opposition parties from the right to the left. This unification became a threat to the leading parties, causing them to think which other bills would be blocked by the opposition parties.
 
However, the opposition parties are not completely united against the leading parties. The CRA, DPP and Sanseito voted yes to revisions to the Imperial House Law, while JCP and some others opposed it. The National Flag Vandalism Punishment Act passed the Diet with the approval of DPP and Sanseito, but the Constitutional Democratic Party of Japan, Komeito, JCP and Reiwa Shinsengumi opposed. The coalition of opposition parties is still limited to some specific bills.

South Korea's Autonomous Defense

South Korea Is Building for the Alliance and for Itself 

By Daniel Sneider, lecturer in East Asian studies at Stanford University, non-resident distinguished fellow at the Korea Economic Institute of America, and APP Member. 

First Published July 20, 2026 on the blog of the Korea Economic Institute of America.

The United States and South Korea describe the latter’s defense buildup with the same enthusiasm but mean two different things. American officials call it “alliance modernization,” while South Korean officials increasingly call it “autonomous defense.” Neither side has much incentive to dwell on the difference, but it is getting harder to avoid.

As the Donald Trump administration tells it, South Korea is increasing defense spending and equipment procurement within the context of a redesigned U.S. strategy to restructure the roles of both U.S. and South Korean forces on the Korean Peninsula and beyond.

Modernization is the “administration’s shorthand for pushing U.S. allies to adapt to a changing regional security environment and shoulder more of the defense burden,” Brookings Institution’s Andrew Yeo observed last fall. Writing for the latest edition of KEI’s Korea Policy, Korea National Defense University’s In Hyo Seol described modernization as “a redistribution of roles on a foundation of converging military interests.” 

This framework is a more comfortable one for those concerned about friction between the United States and South Korea. Differences over specific issues, such as the timeline for returning wartime operational control (OPCON) of South Korean armed forces, can be more easily managed if both Washington and Seoul share the same goal of alliance modernization.

Autonomous Defense

But the reality is more complicated. South Koreans increasingly place their defense buildup and its key components within a different, though not entirely contradictory, policy framework called “autonomous defense.”

Autonomous defense traces its roots to the fear of abandonment in the 1970s, when then President Richard Nixon withdrew 20,000 troops from the peninsula during the Vietnam War. More recently, defense autonomy for South Korea means greater self-reliance, indigenous weapons procurement sustained by arms exports, and ultimately limiting the reliance on U.S. forces as a deterrent to North Korea. 

South Korean policymakers have long grappled with a persistent tension in defense policy between a desire for more autonomy and the reality of the operational indispensability of the U.S.-South Korea alliance. “The goal of autonomy policy is to hold our own while being alliance compatible,” a senior South Korean official told the author on a recent visit to Seoul. In other words, South Korea hopes to shift the alliance’s internal balance of power, reduce technological dependency on U.S. defense systems, and build sufficient indigenous capability to make Seoul a more equal partner.

On the surface, the Trump administration’s goals of shifting a greater share of defense burdens to its allies and encouraging a more regional approach to security would seem to be compatible with South Korea’s preferences. But Washington has been clear about the limits: allies are expected to spend more, not to build alternatives.

The OPCON transfer initiative, for example, was initially targeted in 2012 but has since been replaced by a conditions-based threshold with no fixed timeline. The conditions range from South Korea’s own capability, both in equipment and command, to lead combined forces, its strike and air defense capabilities, and most nebulous of all, the existence of a regional security environment that would be compatible with the transfer.

In 2019, the allies determined that South Korea met a minimum baseline capability and interoperability with U.S. Forces Korea (USFK). Further progress slowed until recently, when the Trump and Lee Jae Myung administrations agreed that a second stage, full operational capability, would be verified this year. Seoul seems likely to establish 2028 as a new target year for OPCON transfer to occur by. 

That push has been met, however, with resistance from the U.S. military, led by USFK Commander Xavier Brunson, who suggested earlier this year that this timeline was too optimistic. The U.S. Senate has backed that up by proposing tighter conditions for OPCON transfer. 

Arms Production and Exports

Similar tensions lurk not far below the surface when it comes to South Korea’s indigenous arms production and its successful export drive across Europe and Asia. Sales of armored vehicles, artillery, jet aircraft, and missile defense systems have transformed the country into a global leader of arms sales. Earlier this month, President Lee attended a NATO forum and suggested such weapons sales could underpin an evolution of South Korea-NATO ties. But senior Trump administration officials have seemingly pushed back on the notion that allies could or should replace reliance on American weapons.

“The simple fact of the matter is that no alternative country or countries can compete with the U.S. defense industrial base, either in quantity or quality,” Pentagon policy chief Elbridge Colby asserted on social media last week. The United States “makes the best equipment, and we make it at a scale that no plausible competitor can match,” Colby continued. Access to the U.S. defense industrial base “is a privilege, not a right.”

Thus, even in its most ambitious formulation, South Korea’s autonomous defense still involves maintaining the U.S. extended deterrence commitment in the face of threats from North Korea. Some sort of U.S. military presence makes that political commitment concrete.

“The withdrawal of USFK is not something we want to see,” a senior Lee administration official told this writer. “But if it becomes a reality for us, and we have to fend for ourselves, we need to block the threat of nuclear weapons.”

The most obvious way to do so—and the one that has attracted the most attention in American policy circles—is a South Korean nuclear weapons program. Alternatively, policymakers in Seoul are interrogating whether rapid changes in defense technology might create a reliable form of conventional deterrence. The first option is still beyond the pale, while the second is still a ways down the road.

“We are learning the lessons of the Ukraine and Iran wars,” the senior official explained, notably laser weapons and AI-powered defense systems that can “potentially intercept hundreds of missiles at one time.” 

For now, neither the United States nor South Korea has an interest in forcing the question. But indigenous production, export markets, command authority, and the first sketches of a conventional answer to nuclear coercion add up to more than burden-sharing.

Asia Policy Events, Monday July 20, 2026

LOOKING BACK TO LOOK FORWARD: IMPACTS OF USAID'S WITHDRAWAL ON ENVIRONMENT PROGRAMS AND IMPLICATIONS FOR A REIMAGINED FUTURE. 7/20, 11:00am-Noon (EDT), VIRTUAL. Sponsor: Environment & Sustainability Workgroup, Society for International Development, United States Chapter. Speakers: Monica Bansal, Co-Founder, One Earth Partners; Hadas Kushnir, Co-Founder, One Earth Partners; Shawn Peabody, Director of Partnership & Innovation, Environmental Incentives, LLC.

EU COMMISSIONER MICHAEL MCGRATH ON EUROPE’S DIGITAL FUTURE. 7/20, 11:00am (EDT), HYBRID. Sponsor: Atlantic Council. Speakers: Michael McGrath, European Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection; Frances Burwell, Distinguished Fellow, Europe Center, Atlantic Council.

SHIFTING TO NEXT-GENERATION SUSTAINABLE AVIATION FUELS. 7/20, 11:00am-Noon (EDT), VIRTUAL. Sponsor: World Resources Institute (WRI). Speakers: Audrey Denvir, U.S. Lands Research Associate, WRI; Stephanie Searle, Senior Director of Programs, International Council on Clean Transportation; Sarah Chou, Decarbonization Manager, American Airlines; Stuart Johnson, Senior Business Development Associate, Infinium; Moderator: Dan Lashof, Senior Fellow, WRI.

WHERE THE IRAN CONFLICT GOES FROM HERE. 7/20, Noon (EDT), VIRTUAL. Sponsor: Foreign Policy LIVE. Speakers: Nate Swanson, Director, Iran Strategy Project, Atlantic Council; Ravi Agrawal, Editor in chief, Foreign Policy.

BACK TO THE BRINK: WHAT COMES NEXT IN THE U.S.-IRAN CONFLICT AFTER THE COLLAPSE OF DIPLOMACY? 7/20, 1:00-2:00pm (EDT), VIRTURAL. Sponsor: National Council on U.S.-Arab Relations. Speakers: Amb. Joey Hood, Former Acting Assistant Secretary, Near Eastern Affairs Bureau, State Department; Former Consul General and Principal Officer, U.S. Consulate, Dhahran, Saudi Arabia; Former U.S. Ambassador to Tunisia; Dr. Joseph Kechichian, Senior Research Fellow at the Office of the Chairman, King Faisal Center for Research and Islamic Studies, Riyadh; Dr. Kristian Coates Ulrichsen, Fellow for the Middle East, Rice University’s Baker Institute for Public Policy; Co-Director, Middle East Energy Roundtable. 

THE FUTURE OF SECURITY ASSISTANCE. 7/20, 1:30-2:30pm (EDT), HYBRID. Sponsor: Strobe Talbott Center for Security, Strategy, and Technology, Brookings. Speaker: Hon. Sara Jacobs (D-CA), Member, U.S. House of Representatives; Moderators: Alexander Noyes, Fellow, Foreign Policy, Strobe Talbott Center for Security, Strategy, and Technology, Brookings; Dafna H. Rand, Senior Fellow, Foreign Policy, Brookings.

CAPTIVE NATIONS SUMMIT 2026. 7/20, 4:00pm (EDT), IN PERSON ONLY. Sponsor: Victims of Communism Memorial Foundation (VOC). Speakers: Hon. Ileana Ros-Lehtinen; Jamie Fly, CEO, Freedom House; Daniel Twining, President, International Republican Institute; Damon M. Wilson, President and CEO, National Endowment for Democracy; Moderator: Ambassador Paula J. Dobriansky, Ph.D., Trustee, VOC; Vice Chair, Scowcroft Center for Strategy and Security, Atlantic Council; Senior Fellow, Belfer Center for Science & International Affairs, Harvard University.

Japan and South Korea Grow Closer

The Trump effect on Japan–South Korea relations

By Daniel Sneider, lecturer in East Asian studies at Stanford University, non-resident distinguished fellow at the Korea Economic Institute of America, and APP Member. 

First Published July 12, 2026 at the East Asian Forum.

The August 2023 Japan–South Korea–US trilateral summit at Camp David provided powerful impetus for Tokyo and Seoul to restore warm ties, an undertaking initiated by former South Korean president Yoon Suk-yeol.

The momentum in Japan–South Korea relations has continued, surviving changes in leadership in all three countries. Even the potentially disastrous pairing of a conservative nationalist government in Tokyo and a progressive administration in Seoul has not slowed the pace of the bilateral partnership’s deepening.

Japanese Prime Minister Sanae Takaichi and South Korean President Lee Jae-myung sit at two ends of the political spectrum, but their May 2026 meeting in Lee’s hometown of Andong on 18-19 May, was marked by a spirit of warmth. Even Lee’s critics, who feared that his long-held harsh views on the legacy of Japanese colonial rule would reverse progress, were pleased.

Former Korean Ambassador to Japan Shin Kak-soo was ‘quite impressed with how [Lee] handled South Korea–Japan relations after taking office’, noting that the meeting in Andong ‘went very well’ — a view shared by senior South Korean officials in off-the-record discussions.

This success can be credited to Japan and Korea’s shared challenges of hedging against both China and an unpredictable United States, with US President Donald Trump’s trade wars and military interventions sending shocks across both economies. Lee’s decision to avoid past sources of contention like wartime history issues with Japan can be read as a calculated effort to use closer ties with Tokyo to insulate South Korea from growing chaos in an unpredictable security environment.

The most powerful factor in this is the prospect of US withdrawal from global leadership under Trump 2.0. Another South Korean senior official noted off the record that South Korea and Japan have ‘shared anxieties about Washington’ and that ‘it is not about China’.

Senior South Korean officials are discussing the need for closer security ties with Japan in response to US retreat, including potentially finessing the territorial disputes by signing a non-aggression pact and moving towards a mutual defence treaty. While this would go beyond what most South Koreans would tolerate — and much less in Japan — its mere consideration is a remarkable sign of the impact of Trump-driven uncertainty.

This tightening is taking place without active US involvement at the highest level. While trilateral meetings are still being held among senior officials and statements are being issued with common views on regional and global security issues like North Korea, this is the product of institutional inertia created by former US president Joe Biden’s administration. There is no evidence of a connection between those official pronouncements and the White House and Trump has never expressed any interest in trilateral cooperation, nor is he eager to follow in Biden’s footsteps.

Despite the factors impelling closer ties, there are serious concerns in Seoul and Tokyo that the rhetoric of bilateral partnership has not been sufficiently reflected in concrete actions.

The most cited example of this is the potential admittance of South Korea to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a move which could forge closer trade and investment alliances and counter US mercantilism. While Seoul has expressed its interest in joining, it has yet to formally apply. Domestic politics remain a constraint, reflected in the ongoing restrictions on the purchase of Japanese seafood due to the Fukushima nuclear accident and its aftermath.

A similar dynamic is visible in the arena of defence cooperation. Japanese Defence Minister Koizumi Shinjiro visited Seoul in June 2026 and reaffirmed tightening defence ties and trilateral cooperation with the United States. But he was unable to get Seoul to sign off on a long-sought military logistics pact which would institutionalise joint operations. Lee told reporters earlier in June that public sentiment on history issues were the obstacle to signing what would otherwise be a logical agreement.

Beyond immediate issues, two policy areas — China and North Korea — could also drive the neighbours apart.

Lee has been careful to maintain good ties with Beijing, both in the economic realm and in potentially seeking China’s help in dealing with North Korea. The divergence between Lee’s policy towards China and the hostile state of Japan–China relations was noted at the Andong meeting.

Both governments share a commitment to the eventual denuclearisation of the Korean peninsula. But Lee seems ready to back a possible Trump summit with North Korean Supreme Leader Kim Jong-un which could offer de facto acceptance of North Korea’s nuclear status. Japan has always been fearful that this outcome could lead to a separation of the Korean peninsula from US extended deterrence commitments and leave Japan exposed to Pyongyang’s nuclear threat.

The relationship also remains marred by the lingering issues of wartime history and justice that have been carefully put aside but not resolved. Compensation cases against Japanese companies for wartime workers in Japanese mines and factories continue to make their way through South Korean courts. Takaichi has carefully avoided doing anything to inflame Seoul, but it would only take a visit to the controversial Yasukuni Shrine — something she did regularly for several decades — to relight the fires of South Korean patriotism.

For now, the path to improved ties looks open, thanks in large part to Trump and to a lesser extent to Chinese President Xi Jinping. But the question of how long it will remain so is far less certain.

APP'S BOOKS OF THE WEEK of June 28, 2026

 📚Books of the Week📖

Red Arrow Across the Pacific: 

The Thirty-Second Infantry Division during World War II

By Mark D. Van Ells, Professor of History, Queensborough Community College of the City University of New York

PURCHASE BOOK 11/12/2024

The story of the renowned Thirty-Second "Red Arrow" Infantry Division: qNational Guard unit—which originated in Wisconsin and Michigan but soon evolved to include soldiers from California to New England—became one of the first US military units deployed overseas in World War II, eventually logging more combat hours than any other US Army division. Offers a cultural history of the Red Arrow's wartime experience, from its mobilization in 1940, to its deployment across New Guinea, Australia, and the Philippines, to its postwar occupation of Japan. Drawing from letters, memoirs, and interviews, Van Ells lets the soldiers speak for themselves, describing in their own words the terror of combat, their impressions of foreign lands, the struggle to maintain their own humanity, and the many ways the war profoundly changed them.

1942: Crux of War

By Jonathan Parshall, Lecturer, 

US Naval War College

PURCHASE BOOK 6/18/2026

By the end of 1942 there had been a sea-change in the conduct of WWII. Within just one 40-day timespan, the British had triumphed over Rommel at Alamein; British and American forces landed in North Africa to confront the Axis position there; the Americans won two naval battles at Guadalcanal, sealing the fate of that campaign and with it Japanese expansionism; the Red Army launched a massive counter-offensive at Stalingrad that would condemn six Axis armies-and hundreds of thousands of German, Italian, Romanian and Hungarian soldiers-to eventual destruction. The Allies had somehow gained the upper hand, forcing the Axis powers into a defensive crouch from which they would not rebound. The war, in short, had turned.

Surviving Chaos: Geopolitics When the Rules Fail

By Mark Leonard, Co-founder and Director,

European Council on Foreign Relations

PURCHASE BOOK 6/23/2026

Trump is blowing up political order. Xi Jinping is scrambling the economy. And Putin is redrawing the map of Europe. At a time when every crisis bleeds into the next – from pandemics and wars to climate shocks and AI revolutions – the old rules of global order are collapsing. Leonard reveals how geopolitics is being rewritten in an age of 'Un-Order', where no one agrees on the rules, and even the concept of order itself is up for debate. Drawing on years of conversations with leaders and thinkers from Beijing to Washington, Leonard argues that we are witnessing a new divide in international politics.

*Books purchased through the links here support Asia Policy Point*

Books selected on the APP website are not a sign of endorsement. 

They are simply new and interesting.