LDP's September 27 Presidential Election

Unusual Developments in the LDP’s Presidential Election

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
September 2, 2024. Special to Asia Policy Point

As the campaign season for the presidency of the Liberal Democratic Party (LDP) enters its initial stages, an unprecedentedly substantial number of candidates – twelve – emerged. Some of them have secured the support of the 20 lawmakers necessary for nomination, while others are still searching. However, it is unclear whether the LDP can demonstrate that it has turned away from its old-style politics that have included obscure political funds and a balance of power among factions. 
 
The day after Prime Minister Fumio Kishida said that he would not pursue another term, he encouraged the Ministers in his Cabinet not to hesitate to run in the LDP presidential election. “There must be someone who will consider running in the presidential election. I hope you can make fair discussions as far as it does not disturb your work,” Kishida told them in a Cabinet Meeting on August 15.
 
Kishida’s comment ignited the race. Some ministers immediately expressed their desire to run. “I hope I can make use of my experiences as minister someday,” said Digital Minister Taro Kono. Minister for Foreign Affairs Yoko Kamikawa expressed determination to take action for her candidacy with deliberation. Even Minister of Economy, Trade and Industry Ken Saito stepped forward, revealing that some of his colleagues expect him to run.
 
Those moves accelerated the decisions of other possible candidates. The next day, Kono met with the boss of his faction, Taro Aso, to request his endorsement. Aso received a similar request from LDP Secretary General Toshimitsu Motegi. Aso approved Kono’s candidacy and told Motegi that he would not have the support of the faction as a whole.
 
Others announced their candidacies within the following days. In addition to Kono, former Minister for Economic Security Takayuki Kobayashi, former Defense Minister and LDP Secretary General Shigeru Ishiba, and Chief Cabinet Secretary Yoshimasa Hayashi all said that they would run.
 
Former Minister of Environment Shinjiro Koizumi and Minister for Economic Security Sanae Takaichi followed. As did former Minister for Women’s Empowerment Seiko Noda, former Minister of Health, Labour and Welfare Katsunobu Kato, and conservative lawmaker Shigeharu Aoyama.
Among those 12, Kobayashi, Ishiba and Kono held press conferences before the end of August. Hayashi, Motegi, Koizumi, Takaichi and Kato will hold theirs in early September. Those eight lawmakers are reportedly confident that they have secured the endorsement of 20 LDP members in the Diet, as required in the LDP presidential election rules. Noda, Aoyama, Kamikawa, and Saito have not yet collected.
 
Under the rules of presidential election, each LDP lawmaker has one vote for a total of 367 votes. Local party members also may vote, but, regardless of the number of local voters, their votes are aggregated to create a pool of votes that are equivalent to 367 of the lawmaker votes. The pool votes are then allocated among the candidates on pro rata basis.
 
Election to the presidency requires a simple majority of the total votes of lawmakers and local, which will be 734, in the first round. If there is no victor in that round, the party will hold a runoff between the two top candidates. While the Diet members still have total 367 votes in the second round, the votes of local party members are reduced to 47, representing each prefectural branch of the party. Each of 47 local votes will go to a candidate who was number one in the prefecture in the first round.
 
A candidate’s prospects can vary considerably between the first and later round. A popular candidate has advantage in the first round because the local votes carry significant weight. But in the later rounds, coalitions among the groups or factions matters can control a majority of the votes because the local member vote is significantly reduced. 
 
When the campaign officially starts on September 12, some of the 12 possible candidates may have dropped out of the race. Not all the candidates will have 20 endorsements. Even among those who do so far, supporters may shift their endorsements from one candidate to another by September 12.
 
If a candidate drops out, his or her supporters will move to other candidates, changing structure of the race. Some candidates will have a first-round advantage and will aggressively seek victory then. Others, however, will shoot for the second round, leading to elaborate arrangements among different groups. That is, the strategy for the second round will be based on factional politics.
 
The biggest topic of discussion so far is Koizumi’s entry into the race. As a young and hopeful lawmaker, whose father is former – and popular – prime minister Jun-ichiro Koizumi, Shinjiro Koizumi has changed the trend of the polls and overtaken Ishiba among the responders who would support the LDP, not necessarily the members of the LDP.
 
In the poll of Asahi Shimbun late August, Koizumi held 28 percent among the LDP supporters, leaving Ishiba (23 percent) behind. Former Prime Minister Yoshihide Suga, who had been the guardian of an earlier trilateral coalition of Ishiba, Koziumi and Kono, announced that he would support Koizumi this time.
 
Since local LDP leaders tend to be older, there is a speculation that the veteran Ishiba has the advantage over the young and unexperienced Koizumi in the local members’ voting on September 27.
 
For the candidates who lack broad popular support, how to survive the first round is a great concern. While they campaign among the local party members as much as they can, they and their supporters must consider how to vote in the second round if they are not one of the top two vote getters.
 
Negotiations for the runoff are ongoing behind the scenes right now. Typically, in an LDP presidential election, some leaders who support different candidates in the first round will seek to form a coalition to take united action in the second-round runoff.
 
Possible candidates for LDP presidential election

Name	Age	Cabinet Minister of	LDP Board	Former Job	University
ISHIBA, Shigeru	67	Defense, Agriculture, Local Revitalization	Secretary General,	Mitsui Bank	Keio
KONO, Taro	61	Digital, MOFA, Defense, Administrative Reform	Public Affairs	Fuji Xerox	Georgetown
KOIZUMI, Shinjiro	43	Environment		Father’s Secretary	Kanto Gakuin
KOBAYASHI, Takayuki	49	Economic Security		MOF	Tokyo
MOTEGI, Toshimitsu	68	MOFA, METI, Economic Revitalization	SG, Election Strategy	McKinsey	Tokyo
HAYASHI, Yoshimasa	63	CCS, MOFA, Defense, Education, Agriculture		Mitsui & Co., Secretary	Tokyo
TAKAICHI, Sanae	63	Economic Security, Internal Affairs	Policy Research	Newscaster	Kobe
KATO, Katsunobu	68	MHLW, CCS, Childbirth	General Council	MOF	Tokyo
KAMIKAWA, Yoko	71	MOFA, Justice, Childbirth		Mitsubishi Research	Tokyo
NODA, Seiko	63	Internal Affairs, Women’s Empowerment, Postal	General Council	Imperial Hotel	Sophia
SAITO, Ken	65	METI, Justice, Agriculture		METI	Tokyo
AOYAMA, Shigeharu	72			Kyodo News	Waseda

(Incumbent is underscored)
 
CDP Race with Old Faces
The leading opposition party, the Constitutional Democratic Party (CDP), will hold its leader’s election on September 23. A former head of the party Yukio Edano and former Prime Minister Yoshihiko Noda have announced their bids. The incumbent head, Kenta Izumi, plans to run for a second term. He is still collecting endorsements in the party.
 
Although Edano and Noda have secured 20 endorsements (the same threshold as the LDP’s), Izumi still struggles to gather enough. There is little chance for any new face to emerge. A freshwoman, Harumi Yoshida, and some others hope to run, but have little confidence that they can secure 20 endorsements.
  
Noda has said that the election should not be a race of the old faces – yet he has sought and received the support of the veteran kingmaker Ichiro Ozawa. Edano meanwhile is backed by the biggest faction in the CDP, called Sanctuary.
 
In their press conferences for their candidacies, Edano and Noda made clear their intent to take administration back from the LDP. But the way forward is not clear. They try to approach the Democratic Party for the People and Japan. But the Japan Innovation Party (Nippon Ishin-no Kai) still rejects cooperation with the CDP. A coalition with the Japan Communist Party (JCP) is not a realistic choice, but Edano and Noda have not denied cooperation with the JCP in some districts.
 
Behind the race between the two veteran leaders, CDP members are frustrated that the party has not achieved an obvious boost in the polls because of the LDP’s slush fund scandal.   
 
The greatest concern for the CDP is not attracting the public attention away from the LDP.
 
Possible candidates for CDP leader’s election

Name	Age	Cabinet Position	Party Board	Former Job	University
EDANO, Yukio	60	CCS, METI, Administrative Reform	Head	Lawyer	Tohoku
NODA, Yoshihiko	67	Prime Minister, MOF	Head (DPJ)	Chiba Prefectural Assembly	Waseda
IZUMI, Kenta	50		Head	Secretary	Ritsumeikan
YOSHIDA, Harumi	52			Secretary	Rikkyo
MABUCHI, Sumio	64	MLIT	Diet Affairs	General, Co.	Yokohama National
EDA, Kenji	68		SG (Your Party)	METI	Tokyo

(Incumbent is underscored)

Kishida Stands Down

How new will the next Japanese PM be?

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
August 21, 2024. Special to Asia Policy Point

On August 14, Prime Minister Fumio Kishida announced at his press conference that he would not run in the Liberal Democratic Party (LDP) presidential election this coming September. His campaign would have been for a second term as president of the LDP. The new party leader elected on September 27 will become the next prime minister of Japan by virtue of the LDP’s voting power in the Diet. 

An extraordinary session of the Diet is expected next month after the LDP election in order to vote on the next prime minister. The date has not yet been selected. When it is, this will mark the end of the current highly unusual political situation in which a wildly unpopular prime minister has overstayed his tenure.

In his press conference, Kishida emphasized the need for change in the LDP. “It is necessary for the LDP to show its change before the nation. The first step for it, which is very easy for the people to understand, is that I am going to stand down. I will not run for coming presidential election,” said Kishida. His diplomatic work had ended the day before after a telephone call with the prime minister of Mongolia.

In aftermath of the LDP slush fund scandal, Kishida lost public confidence when he failed to explain how and why the kickback system of ticket sales for fundraising parties was created and operated. His inability to regain public support led to miserable defeats in the April by-elections of the House of Representatives. These losses generated serious concerns among LDP lawmakers about the coming elections of both houses of the Diet.

Kishida alienated himself from other LDP lawmakers by dissolving his faction, the Kochi-kai, and then by appearing before the Political Ethics Council of the Diet to describe his own involvement in the slush fund scandal while urging other LDP lawmakers to take responsibility. The lawmakers were frustrated with Kishida and demanded his resignation. Under these circumstances, Kishida could not keep his administration going.

Kishida confessed, as the LDP president, he felt responsible when details of the slush fund scandal first began to emerge. This created expectations that he would step down over the summer. And he has.

The race to succeed Kishida will be short and fast. Former LDP Secretary General and former Minister of Defense Shigeru Ishiba announced his candidacy, if he would be able to secure necessary nominators, as soon as Kishida ended his press conference. The current Secretary General, Toshimitsu Motegi, has not hidden his ambition either. Within hours of Kishida’s announcement, Motegi had a one-on-one meeting with LDP Vice President Taro Aso.

The race likely will be between those two men. Two former prime ministers, Aso and Yoshihide Suga, who hope to maintain behind-the-scenes leadership, may influence the race. Aso would prefer Motegi in order to control the next administration. Ishiba would be the better vehicle for Suga. But it is unclear whether Ishiba will want or need Suga’s support.

Other possible contenders include Minister for Economic Security Sanae Takaichi, Digital Minister Taro Kono, and former Minister for Economic Security Takayuki Kobayashi. However, each of them is still struggling to marshal support in the LDP. Kono’s faction boss, Aso, has yet to endorse him. Takaichi has not expanded her wing of the LDP beyond ultra conservatives. And Kobayashi has not built a significant youth movement.

One of the biggest obstacles for the lesser contenders is LDP election law. Article 10 of the Rules for Election of President of the LDP states that “only those members nominated by at least 20 Party Diet members shall be accepted as candidates.” Collecting 20 supporters is not easy, because those supporters will be isolated if their candidate loses in the presidential election. Twenty supporters have to be ready for exclusion from cabinet posts and party leadership positions, if they fail. The 20-person requirement means that four or five candidates would be the maximum number. 

So long as the 20 party-member requirement remains in place, factional politics will be the order of the day. The supporters of the winner become mainstream in the next administration and act as a quasi-faction. To maintain collective power in politics, LDP lawmakers take collective action. The meeting between two leaders of the former Kochi-kai, Chief Cabinet Secretary Yoshimasa Hayashi and former Minister of Defense Itsunori Onodera, on the same day of Kishida’s announcement demonstrated that they would maintain their factions.

Both the former Abe and Nikai factions are too fragmented after the slush fund scandal to unite in the presidential election. Some members are no longer affiliated with the LDP. It is possible that the LDP will field new candidates against their former members in the next election. That is what former Prime Minister Junichiro Koizumi did in the postal reform election in 2005 against his political enemies. An old-time kingmaker, Shin Kanemaru, once said that factional breakdown was “dispersed horse manure in a river stream (maguso-no-kawa-nagare).”

Although young LDP lawmakers have expressed concerns about factional politics, the LDP has no choice. The opposition parties criticize the LDP’s routine replacement of a leader in order to escape responsibility for any failure, in this case the slush fund scandal. The opposition also derides the LDP’s factional politics as old-fashioned.

Yet, it is undeniable that the LDP remains the choice of voters in Japan. The opposition parties have not presented a clear alternative to the LDP. They have never agreed on basic policies such as constitutional amendments or nuclear power generation. It is necessary for them to propose which parties will construct a new administration and who will be the prime minister. The leading opposition party, the Constitutional Democratic Party, needs to discuss its idea for a new administration in its September 23 presidential election—four days prior to the LDP’s presidential election.

Japan's Expanding Security Commitments

The 2+2 Solidifies Security Cooperation between Japan and the U.S.

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
July 29, 2024. Special to Asia Policy Point

On July 28, the secretaries and ministers for foreign affairs and defense of both Japan and the United States issued a joint statement following the meeting of the Security Consultative Committee (2+2) in Tokyo. Their statement focused on enhancing the interoperability of Japan and U.S. forces, including a new command system in each country’s defense organization, procurement of defense equipment and upgrading the countries’ discussion of extended deterrence. This cooperation is intended to counter recent demonstrations of military strength by China, Russia, and North Korea.

With the National Defense Strategy in 2022, Japan decided to establish a permanent Joint Headquarters to unify the commands of the three Self-Defense Forces (JSDF) in order to reinforce its military readiness. The Diet finally passed a bill in May to set up the headquarters in the Ministry of Defense by the end of FY 2024.

Along with these internal actions in Japan, the 2+2 joint statement notes the U.S. intention to reconstitute the U.S. Forces Japan (USFJ) as a joint force headquarters. The statement thus implemented the joint statement of Prime Minister Fumio Kishida and the U.S. President Joe Biden from April of this year, which announced that both countries would upgrade their command and control frameworks for greater interoperability.

Both countries are consolidating their commands in order to address the evolving security challenges in the Indo-Pacific region, and to plan for contingencies regarding Taiwan. The USFJ has been under jurisdiction of the U.S. Indo-Pacific Command in Hawaii. To better integrate operations and strengthen interoperability and planning between Japan and the U.S., the U.S. will give the USFJ greater autonomy.

While the principle of interoperability assumes the equivalence of both forces, there is a concern in Japan that the JSDF will be a junior partner to the USFJ given the JSDF dependence on the USFJ for information, capabilities, and decision making. Some hope that the commander of the USJF will have the rank of General to balance the titles of both commanders.

The 2+2 also agreed to cooperate more in manufacturing defense equipment. Quoting the joint statement, “the Ministers welcomed high-priority efforts to pursue beneficial co-production opportunities to expand production capacity of Advanced Medium-range Air-to-Air Missile (AMRAAM) and Patriot PAC-3 Missile Segment Enhancement (MSE).”

At their summit meeting in April, Prime Minister Kishida and President Biden agreed to convene a forum on Defense Industrial Cooperation, Acquisition and Sustainment (DICAS). The 2+2 confirmed this decision and encouraged efforts in both the public and private sectors to improve missile technology, as well as supply chain resilience and repair of ships and aircrafts.

In 2023, the Japanese government eased restrictions on exports of defense equipment to the U.S. by revising the Three Principles of Transfer of Defense Equipment and Technology. Because Japanese manufacturers have been producing defense equipment under a U.S. license, exports of this equipment to the U.S. would be allowed. The 2+2 agreed that Japanese manufacturers would export to the U.S. about 3 billion yen’s worth of Patriot missiles.

A highlight of the 2+2 meetings was an upgrading of the bilateral Extended Deterrence Dialogue (EDD) to the minister level. Both governments have conducted EDD at a senior official level since 2010. Both countries now recognize a need to enhance cooperation on deterrence, given the current military environment.

The first minister-level EDD was held at the 2+2. The joint statement described concerns with “North Korea’s continued destabilizing behavior and sustained pursuit of its unlawful nuclear and ballistic missile programs, China’s accelerating and opaque expansion of its nuclear arsenal, and Russia’s undermining of arms control and the global nonproliferation regime.” Their concerns grew out of a 2023 DOD report on China’s military capability. That report indicated that China could acquire over 1,000 nuclear warheads by 2030.

However, EDD means that Japan will rely further on U.S. nuclear deterrence. Some Japanese newspapers noted that the Kishida administration has sent contradictory signals. As the chairman of the G7 Hiroshima Summit 2023, Kishida promoted a world without nuclear weapons. Yet the elevation of EDD might, according to a nuclear disarmament expert quoted in the Tokyo Shimbun, give North Korea a justification for its nuclear weapons arsenal.

The biggest reason for Japan and the U.S. to enhance their security cooperation is the growing power of China in the Indo-Pacific region. “The Ministers concurred that the People’s Republic of China’s foreign policy seeks to reshape that international order for its own benefit at the expense of others,” said the 2+2 joint statement. China’s behavior is regarded as a serious concern to the alliance and the international community. The two governments reaffirmed the U.S. commitment to the defense of the Senkaku Islands under the Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security.

Japan, meanwhile, keeps on trying to maintain a diplomatic channel with China. Foreign Minister Yoko Kamikawa met with Chinese Foreign Minister Wan Yi in Laos behind the backdrop of ASEAN foreign ministers meeting. The two countries intend to strengthen their “strategically reciprocal relationship.” However, the meeting yielded no concrete results.

The 2+2 meeting reflected the fact that both Japan and the U.S. must solidify their security cooperation given the volatility of leadership in both countries. President Joe Biden has announced his withdrawal from the presidential election in November. If Republican Donald Trump is reelected it is uncertain if he would maintain the bilateral relationship. He has argued that U.S. allies, including Japan, have not paid their fair share of defense costs, relying instead on U.S. support.

As for Japan, Kishida’s unpopularity augurs poorly for his continuation as prime minister after the Liberal Democratic Party elections in September. Recent secrets and corruption scandals in the Defense Ministry and JSDF combine with Yasukuni Shrine visits by JSDF officers and the undisclosed sexual violence by U.S. servicemen undermine trust between the two militaries as well as the Japanese public. Officials in both countries, thus, hope the 2+2 statement will institutionalize existing bilateral agreements and encourage greater accountability.

Tokyo's Elections

Resentment against Existing Parties Shown in Tokyo Elections

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
July 8, 2024. Special to Asia Policy Point

The incumbent governor of Tokyo, Yuriko Koike, secured her third term in the gubernatorial election on July 7. A contender supported by the opposition parties in national politics, Renho, came third behind an independent candidate, Shinji Ishimaru. The result, including by-elections for the Tokyo Metropolitan Assembly, showed a fundamental resentment against existing political parties -- casting a shadow on the future of the ruling Liberal Democratic Party (LDP).

In her campaign Koike promised to update her policies, including support for families with children, and emphasized disaster management. She named her campaign policies “Tokyo Great Reform 3.0.”

Koike did not accept official support from the LDP and Komeito for her campaign. Still, both parties voluntarily promoted her. According to an exit poll of NHK, 60 percent of LDP supporters and 80 percent of Komeito supporters voted for Koike. They are undeniably the driving force behind Koike’s victory.

She successfully distanced herself from the LDP, which has been unpopular in the current election season. The party’s unpopularity dates to the by-elections for the House of Representatives in April and is the result of the slush fund scandal. Although Koike was formerly an LDP lawmaker, she separated from the LDP as the governor of Tokyo, leading her Tokyoites First Party. That stance made LDP’s “stealth support” for Koike easier.

Renho meanwhile failed to set her agenda within the structure of confrontation between the leading and opposition parties in national politics. When she announced her candidacy in May, Renho emphasized her bid against Koike as “anti-LDP, non-Koike.” But Koike eluded Renho’s campaign strategy, by refusing any help from the LDP on the campaign trail. Renho ironically lost her momentum by accepting support from the Constitutional Democratic Party (CDP) and the Japan Communist Party (JCP).

The true anti-LDP candidate turned out to be Ishimaru. As a former mayor of Aki-Takata City, Hiroshima, Ishimaru ran his campaign through social networking. In his speeches on the street, he asked his audience to upload his campaign materials to the Internet, instead appealing his own policies for Tokyo. In YouTube videos, he continued to denounce existing politics.

Unfortunately for Koike, she did not receive a true majority of the vote; the sum of votes for Renho and Ishimaru exceeded what Koike obtained. There were frequent disturbances during Koike’s speeches. It is undeniable that Koike was regarded by voters as one of the leaders of the old politics.

It was a comfortable outcome for the LDP, none the less. Since the complete defeat in all three by-elections of the House of Representatives in April, Koike’s win was the first major victory of a candidate supported by the LDP. Party leaders are not feeling it, though. “Koike’s victory is not our party’s victory. Criticisms still remain and we need to promote party reforms,” LDP Deputy Secretary General, Tomomi Inada, told NHK News.

The LDP’s pessimism is based on the result of the by-elections for the Tokyo Metropolitan Assembly that were held the same day. Although the LDP ran candidates in eight of nine districts, it won in only two. The party representation was reduced by three seats in the election, facing criticisms of its management of political funds as shown in the slush fund scandal in the Diet.

In the Hachioji district, an independent candidate defeated the LDP candidate by a great margin. Hachioji is the district where one of the leaders of the Abe faction, Koichi Hagiuda, has been keeping his seat in the House of Representatives. Although party leaders, including Secretary General Toshimitsu Motegi and a popular candidate as the next prime minister Shigeru Ishiba, campaigned for the LDP candidate, their appearances did not soften the negative impact on the party.

In the Koto district, which overlaps with the Tokyo 15 district in the House of Representatives -- where the LDP lost in a by-election in April -- the LDP candidate lost to an independent. In the other four districts, the LDP lost by slight margins to the CDP, the Tokyoites First Party or an independent. Strangely enough, the LDP won by a big margin in the Itabashi district, which is in the grip of another leader of the Abe faction, Hakubun Shimomura, who is among the most conservative.

Prime Minister Fumio Kishida did not stand on the stage of any campaigns in the Tokyo gubernatorial election or the by-elections of the assembly. It was obvious that Kishida would have received harsh criticism of his handling of the slush fund scandal from the audience. The result of the elections in Tokyo will work against Kishida’s reelection this fall.

Renho’s defeat cast doubt on the value of the CDP’s cooperation with the JCP.   Running Renho for Tokyo governor was a decision of the CDP with expectation that, in the party’s following winds from the major victories in the by-elections in April, she could sail to victory.

The CDP may reconsider its strategy for the next general election of the House of Representatives. The result of elections in Tokyo may also affect the selection of the next CDP leader in September.

The unexpected success of Ishimaru may affect the campaign strategies of the existing parties. Ishimaru proved that a campaign relying on SNS could overcome the biggest opposition party. He boasted that running against Prime Minister Kishida in his district in Hiroshima of the House of Representatives would be an option for him in the next election. His message against the politics of existing parties struck a chord with certain voters.

Frustration with current politics is reflected in the number of candidates. Fifty-six candidates ran for the one seat of governor, marking a new record. The public poster boards in the streets did not have room for all the candidates.

Tokyo gubernatorial election in 2024 was not completely an event for selecting the next governor of Tokyo. Some candidates did not intend to work as governor, but to collect money by selling an opportunity for voters to express their disappointment with the process or to earn more page views in SNS. The existing parties have begun to consider new legislation to regulate election campaigns. The biggest loser might be democracy in Japan.

Japan's Ordinary Diet Session Ends

A bad term for Kishida

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
June 23, 2024. Special to Asia Policy Point

On June 23, Japan’s ordinary Diet session for this year ended. From the beginning, the session was preoccupied with the Liberal Democratic Party’s (LDP) slush fund scandal.  Prime Minister Fumio Kishida’s administration barely survived persistent inquiries from the opposition parties about the LDP’s secret expenditures of political funds.  By now, Kishida is exhausted after his efforts to protect his party and isolated from nearly everyone in the party. His reelection as LDP president this fall is uncertain at best.

The slush fund scandal came to public attention last November when a professor, Hiroshi Kamiwaki, found that some lawmakers had reported actual expenditures more than their fundraising. This difference lay in the fact that lawmakers, most of whom were affiliated with the Abe faction, had failed to report income from the sales of tickets for fundraising parties. The Special Investigation Division of the Tokyo Public Prosecutors Office began to investigate them and their factions.

Before the Diet’s ordinary session was convened in January, Kishida tried to protect his Cabinet by firing four Ministers of the Abe faction. But it was too little too late to mitigate the impact of the slush fund scandal. It emerged that the secret “kickback” of party ticket sales was a regular method of distributing political funds in the Abe faction. In January, the Public Prosecutor’s Office indicted three lawmakers in that faction and a number of accounting managers in the Abe and Nikai factions.

Considering public resentment of the LDP, Kishida suddenly announced that he would dissolve his own faction, Kochi-kai. He did not consult with his closest allies, LDP Vice-president Taro Aso or Secretary General Toshimitsu Motegi. When the leaders of the Abe faction were reluctant to appear before the Political Ethics Council of both Houses to address the scandal, Kishida abruptly decided to urge the leaders of Abe faction to attend the Council meetings.

Those two unilateral decisions -- dissolving Kochi-kai and appearing before the Councils – put considerable distance between Kishida and other party leaders. The leaders regarded Kishida’s decisions as a form of populism.

The LDP eventually determined that 82 lawmakers had failed to report kickbacks and punished 39. The 39 included Ryu Shionoya, the chair of the Abe faction, and Hiroshige Seko, the top leader of the Upper House lawmakers in the faction. Both left the party. Other leaders, including some from the Nikai faction, were suspended from party membership or party leadership posts. These lawmakers felt they were being made scapegoats for the Kishida administration.

In handling the scandal, Kishida could never explain to the public why the scandal had happened. Some believe that the kickback system in the Abe faction began when former prime minister Yoshiro Mori was the faction leader. But Kishida did not ask Mori for details, thus casting doubt on Kishida’s seriousness about the issue. Kishida’s seeming indifference to public sentiment against politicians’ mismanagement of political funds to avoid taxation caused a steady decline in the approval ratings of his administration.

In the second half of the ordinary session, Kishida focused on a bill to amend the Political Funds Control Act. Although the bill passed the Diet at the end of the session, it included three important loopholes.

First, at the insistence of Komeito, the LDP lowered the threshold for disclosing the identities of party ticket purchasers from 200 thousand yen to 50 thousand yen. But the LDP did not revise the bill to set a limit on the number of fundraising parties each year.

Second, the bill requires certain disclosures about policy activity funds, the money that is distributed from a party to its leaders without mandate of reporting. But there is a time lag: disclosures are required only 10 years after the distribution of funds. Moreover, the crime of failing to properly report political funds will legally become invalid after five years. It is possible that an incorrect report cannot be punished when it is disclosed ten years after, because it already is invalid.

Third, the law requires every lawmaker to certify his or her political funds report. Yet if the certification is wrong, the legislation allows a lawmaker to blame his or her accounting manager.

Caught in the middle between the LDP, which has sought as loose regulation as possible and the opposition parties, sometimes including Komeito, which have called for stricter standards on political funds, Kishida made compromises with both sides. The decision to lower threshold for the disclosure of party ticket purchasers left behind leaders of the LDP including Aso and Motegi.

Kishida’s unilateral handling of politics during the session has taken its toll. In the leaders’ debate in the last week of the session, in which the opposition leaders demanded that Kishida dissolve the House of Representatives and hold a general election, Kishida firmly rejected a snap election at the end of the session.

Although the opposition parties proposed a no-confidence resolution in the prime minister, the ruling party rejected it with majority of votes. Arguments remain, however, that Kishida is not a fit party leader in the coming presidential election. Kuniyoshi Azuma, a member of the Lower House affiliated with the Motegi faction, explicitly questioned Kishida’s campaign. “Kishida should be circumspect in referring to his reelection and have more self-restraint,” said Azuma at a meeting in Asahikawa City, Hokkaido.

Party leaders now hold clandestine meetings to discuss the timing of a snap election. Summer elections would give the LDP a miserable defeat because of the extremely low approval rating for the Kishida Cabinet and the LDP. They have concluded that it would be best for a snap election to be held this fall after September’s selection of a new LDP president.

LDP Drops Constitutional Amendment in This Session

They were not enthusiastic anyway

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
June 17, 2024. Special to Asia Policy Point

The Liberal Democratic Party (LDP) gave up submitting a draft constitutional amendment to the Diet by the end of current session on June 23. Prime Minister Fumio Kishida had announced that he would move forward with the amendment within his term as president of the LDP, which expires at the end of September. It is now unlikely that he can fulfill this commitment. Conservatives in the party will criticize him for this, adding to the challenges that his reelection campaign faces.

It was during his campaign for the LDP presidency in the fall of 2021 that Kishida promised a constitutional amendment. In the press conference at which he announced his candidacy, Kishida declared that he hoped to finish the amendment within his term ending September 2024. “Amendment of the Constitution should be surely promoted to deal with changes in our time,” said Kishida.

Having been a member of the dovish LDP faction, Kochi-kai, Kishida was not known as a major proponent of a constitutional amendment. In his bid for support from LDP conservatives, whose votes would control election results, Kishida emphasized the amendment as one of his core policies. His approach was to incorporate “realism” to cope with political reality.

Leaving negotiation over the policy to the Diet members of the LDP, Kishida repeated that he would do his best to complete the amendment within three years. In his policy speech at the beginning of current ordinary session of the Diet in January, Kishida insisted that he would release a draft and accelerate discussions to bridge the differences of parties.

The LDP focused on adding an emergency clause to the Constitution in the current session of the Diet, which would extend the term of members of the Lower House in a state of emergency. In April, the LDP proposed establishing a drafting committee in the Commission on the Constitution of the House of Representatives.

However, the Constitutional Democratic Party (CDP) opposed the formation of a drafting committee. CDP members of the Commission argued that the lawmakers who had been involved in the slush fund scandal should be ineligible to participate in discussions over the constitutional amendment. Several LDP members would be disqualified.

Given the resistance of the opposition parties, the LDP considered submitting a draft to the Diet with the approval only of proponents of the amendment, such as the Nippon Ishin no Kai (Japan Innovation Party), Komeito, and the Democratic Party for the People. The LDP leaders decided not to pursue that option because it would have undermined work on Kishida’s highest priority – amendment of the Political Funds Control Act. The LDP finally gave up on a constitutional amendment in the current session.

The required timeline and prerequisites for a constitutional amendment work against Kishida. Submission of a draft of a constitutional amendment requires the approval of over 100 members in the Lower House and 50 in the Upper House. A two-thirds majority in both houses is then necessary to hold a national referendum. A referendum will occur 60 to 180 days after the Diet’s approval. A simple majority of the popular vote is all that is needed to formally amend the constitution.

To meet these deadlines by the end of his presidential term, Kishida must obtain the Diet’s approval in July at the latest. But Kishida still plans to close the Diet session in June without extension to avoid further inquiries into the slush fund scandal. Kishida thus cannot live up to his campaign promise of three years ago.

The conservatives in the LDP, led partly by Ishin, moved so hastily on proposing an amendment that they failed to achieve a broad consensus. The proposed drafting committee and the idea of a draft amendment stiffened the resolve of the opposition parties. Article 54 of the Constitution empowers the Cabinet to convene a special session of the Upper House in a national emergency. Upper House members, including from Komeito, are skeptical of any amendment, because the Diet can work during an emergency with a special session, even if the Lower House members are absent.

One of the ranking members of the Lower House commission, Gen Nakatani, revealed his private “draft” in the commission’s meeting on June 13. His proposal defined an emergency as an “election difficulty situation,” such as a natural disaster, pandemic, or armed attack. The draft would have extended the term of the Lower House members for as long as six months to a year.

However, Nakatani’s idea received no buy-in from the other parties. His draft is unclear about who would declare an election difficulty situation. There could be room for extending terms in the Lower House in the event of significant weather conditions or infectious diseases, although the prior approval of a two-third majority of both Houses would be essential.

The conservatives in the LDP who have been the driving force behind the constitutional amendment are affiliated with the former Abe faction. But the faction was dissolved after the slush fund scandal and lost political power. Kishida can safely ignore any pressure from this faction to pursue the amendment.

However, Kishida has shown a decline of his own political power over his efforts to amend the Political Funds Control Act. In a mid-June Asahi Shimbun poll, the approval rate for Kishida Cabinet was 22 percent, the lowest level of his administration, and support for the LDP marked new record low of 19 percent.

Frustrated conservatives may turn to another candidate in the presidential election. There appear to be various moves in the LDP to discuss power sharing after the Diet is adjourned and after the LDP presidential election. Kishida’s chances for reelection are shrinking.

The Option for a Snap Election in Japan has Disappeared

Nothing to see here

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun, You can find his blog, J Update here.
June 10, 2024. Special to Asia Policy Point
 
Some newspapers have reported that Prime Minister Fumio Kishida has abandoned the idea of dissolving the House of Representatives (Lower House) and holding a snap election. This was seen as an option for Kishida to preserve his administration notwithstanding its low popularity. But considering public skepticism about Kishida’s handling of the slush fund scandal in the Liberal Democratic Party (LDP) and the party’s recent electoral defeats, this option is no longer viable.

The Asahi Shimbun reported on June 4 that Kishida was about to make a final decision not to call a snap election based on multiple sources in the Kishida administration. Yomiuri Shimbun followed Asahi the next day with a report that Kishida had told some of his allies of his decision.

Kishida had hoped to call for a general election at the end of the Diet session (June 23), by which time an official visit to the United States in April and a tax cut in June would have raised his approval ratings enough to secure his reelection When these events did not improve his popularity, Kishida was forced to give up that option.

“I am now involved in some political issues which cannot be postponed. I am thinking about nothing but to bring outcomes on those issues,” Kishida told reporters on the day Asahi published its story at the top of the front page. Kishida will focus now on achieving a positive economic cycle with wage and price hikes and on repairing public confidence in politics.

It is possible that both Asahi or Yomiuri interviewed Kishida. Both reports were based on unnamed sources inside the Kishida administration or the LDP. Politicians often seek anonymity in the media when they face an important decision, like calling a snap election. They leak information to reporters to control the situation.

The LDP’s loss of seats in all three by-elections, including the by-election in Tokyo in which the LDP could not even field a candidate, undermined Kishida’s credibility as a leader for an election. It was obvious to most lawmakers in both the LDP and Komeito that they would face disastrous consequences if Kishida called a snap election in the current political environment.

With no hope of fielding a winnable candidate in the Tokyo gubernatorial election next month, the LDP is seeking an opportunity to support incumbent, Yuriko Koike, who left the LDP seven years ago.

Kishida’s power to dissolve the Lower House is widely believed to stem from Article 7 of the Constitution. This Article provides that the Emperor may dissolve the House of Representatives “with the advice and approval of the Cabinet.” Lawmakers have long interpreted “advice and approval” to authorize a prime minister to call a snap election whenever he or she likes.

Article 69 presents another way to dissolve the Lower House. It states that, if the House passes a no-confidence resolution or rejects a confidence resolution, the Cabinet will resign en masse, unless the House of Representatives is dissolved within ten days. If the Cabinet relies on Article 7 to dissolve the Lower House, the Cabinet can survive resolution a vote of no-confidence at least until the new Lower House is convened after a general election.

The prime minister’s exclusive authority to call a snap election is a matter of constitutional interpretation. But Kishida cannot do so unilaterally. Were he to try, the LDP leaders could immediately begin the process of replacing him as the president and passing a non-confidence resolution in the House of Representatives. Calling a snap election effectively requires the consent of the LDP leaders.

They are currently opposed to a snap election because it would benefit only Kishida and not the LDP. Kishida has alienated his closest ally, former prime minister Taro Aso, by negotiating a compromise with Komeito and the Ishin on revisions to the Political Funds Control Act. Through this compromise, as well as the decisions to dissolve his own faction in January and to attend the Political Ethics Council in the Diet in February, Kishida has eroded his political basis.

The LDP Secretary General, Toshimitsu Motegi, has not concealed his ambition to succeed Kishida. He has been traveling around Japan to publicize his work on political reform. Former prime minister Yoshihide Suga, who unwillingly handed his seat over to Kishida in 2021, has held nighttime meetings with LDP leaders, inviting speculation that he may be seeking a kingmaker role.

The only way for Kishida to survive this crisis is to improve his approval rating. However, there has been no significant boost to his popularity, even after the Diet passed a bill to increase the birth rate, a principal policy objective for Kishida. The system of tax cuts starting June is too complicated for the taxpayers to realize any benefit soon. And Kishida’s trilateral summit meeting with the leaders of China and Republic of Korea did not garner much public attention.

From the beginning of his administration, Kishida has been promoting his policies as a “new form of capitalism.” His goals included wage increases and the Digital Garden City Nations initiative. The slush fund scandal, however, has interrupted any progress toward these objectives.

Cooperation on Japan’s Political Reform Bill

Fraught Relationships

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
June 3, 2024. Special to Asia Policy Point
 
Liberal Democratic Party (LDP) President and Prime Minister Fumio Kishida, reached a deal on a political reform bill with the leaders of Komeito and Nippon Ishin no Kai (Japan Innovation Party) on May 31. Komeito and Ishin plan to vote this week for the LDP’s revised Political Funds Control Act (PFCA) in the House of Representatives. The bill is expected to pass the Diet by the end of the current session.
 
Kishida has been saying that he would make every effort to pass a bill in this Diet session. The agreement between the two parties is a step forward for Kishida in stabilizing his administration, which has been damaged by the slush fund scandal.
 
However, it is unlikely that the success in reaching a deal with Ishin will move the needle much on Kishida’s low approval ratings. An option for Kishida is to call a snap election at the end of current session of the Diet. This is not a realistic option as Kishida would need the basic support of the LDP, which he does not have.
 
A few weeks ago, the LDP and Komeito reached a rough consensus on a bill that would revise the PFCA. The agreement did not, however, resolve two issues. One was the yen threshold for the mandatory disclosure of the name and other details of a purchaser of tickets to a fundraising party. The current threshold is ¥200,000. The LDP would lower it to ¥100,000, but Komeito has insisted on a ¥50,000 threshold.
 
The second issue was regulation of the policy activities fund – money that a party gives to a lawmaker presumably for campaigning or other political activity, but neither the party nor the lawmaker is required to disclose any details about the use of the funds.   Komeito has urged that all the details of these funds be reported. The LDP has proposed only that the purpose of expenditures be disclosed. 
 
Since then and at the eleventh hour, Kishida has compromised. In a meeting with the Chief Representative of Komeito, Natsuo Yamaguchi, almost on the deadline day for legislation to be passed in the current session of the Diet, Kishida agreed to set the yen threshold for party ticket disclosures at ¥50,000. Kishida apparently acted on his own initiative without consulting LDP members who likely would have resisted.
 
Immediately after his meeting with Yamaguchi, Kishida unexpectedly met with the leader of Ishin, Nobuyuki Baba. Critical of the LDP’s response to the slush fund scandal, Ishin had submitted its own bill to amend the PFCA. The Ishin bill would require the disclosure of the receipts of the policy activity fund ten years after payments had been made. Kishida agreed to add this provision to the LDP bill.
 
“I offered an ambitious deal, because public confidence in politics would not be restored unless the bill passes the current Diet,” Kishida told reporters. The leaders of Komeito and Ishin were satisfied with each of their agreements with Kishida. “It was a great decision (of Kishida)” said Yamaguchi. Baba boasted that his party’s offer had been accepted by the LDP 100 percent.
 
Considering LDP’s lack of a majority in the Upper House, some cooperation with other parties is essential to move the LDP bill forward. With help from Komeito and Ishin, Kishida will be able to implement his promise to pass the bill in this session. For the LDP, the deal would allow fundraising parties and policy activity funds to continue albeit subject to some restrictions. 
 
Komeito has been reluctant to help the unpopular Kishida administration, but only through a coalition with LDP can the party exercise any influence in the government.
 
It was also unusual for Ishin to help Kishida. Ishin has distanced itself from the LDP to avoid becoming enmeshed in the inappropriate control of political funds. But the alternative to working with the LDP would be for Ishin to align itself with the opposition parties – the Constitutional Democratic Party (CDP) and the Japan Communist Party – a result that would be anathema to a conservative party such as Ishin. Defeats in the by-elections in Nagasaki and Tokyo in April also prompted Ishin to reconsider its stance as an opposition party.
 
The revised LDP bill does not include proposals from other opposition parties. The CDP has been arguing that the law should prohibit not only fundraising parties and the policy activity fund, but also donations from corporations and organizations. The head of CDP, Kenta Izumi, has said that the LDP bill falls short of fundamental political reform. The CDP is likely to criticize the cooperation among the LDP, Komeito and Ishin as “badgers in the same hole.”
 
The approach to the LDP bill will restructure political relationships in the Diet. Ishin is likely to move ever closer to the LDP. This will make Komeito uneasy. In any case, it remains unlikely that the cooperation among the three parties will rise to the level of electoral cooperation. Political coalitions often lead to integrated candidates in each electoral district. None of the three parties seem ready to do that.
 
While establishing a new cooperative framework in the Diet, Kishida generated more frustration in the LDP. On the day before his meetings with Komeito and Ishin, Kishida met with LDP Vice-president, Taro Aso, and Secretary General, Toshimitsu Motegi.  According to news reports, the party elders told Kishida not to compromise on the regulation of fundraising parties.
 
In the view of LDP members, Kishida decided to deal with Komeito and Ishin to preserve his administration at the expense of the financial needs of the LDP’s lawmakers. It is yet another unilateral decision by Kishida, which parallels with the dissolution of his faction in January and his attendance at the political ethics council in February. Kishida is becoming so isolated in his own party that calling a snap election is increasingly difficult.

The Fruit of the April By-elections

 Not Good News for Kishida

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
May 19, 2024. Special to Asia Policy Point
 
Prime Minister Fumio Kishida is now reaping the bitter fruit of the LDP’s defeats in the three recent by-elections. The Liberal Democratic Party’s (LDP) coalition partner, Komeito, has refused to co-sponsor amendments to the Political Funds Control Act (PFCA). Kishida had announced that the amendments would be approved by the end of current Diet session. Some LDP leaders are skeptical of Kishida’s handling of the matter.

Although LDP and Komeito reached a rough agreement several weeks ago over revisions to the PFCA, they did not agree on two points: lowering the threshold for disclosing the identities of purchasers of fundraising party tickets and disclosing details about “policy activity funds.”

The LDP has proposed that the threshold for the disclosure of identities be 100,000 yen, but Komeito has insisted on 50,000 yen. The LDP also has proposed only modest changes to rules governing policy activity funds: parties would have to report only the sum of expenditures for each program, such as party events, elections, public relations, and research. This disclosure would be triggered only when a party transfers more than 500,000 yen to a lawmaker. Komeito would not agree to such minor reforms. 

Is the difference between 100,000 yen and 50,000 yen so large? Not really – but the difference can be crucial for the LDP and some lawmakers who have not found their footing in the coming election. The LDP would prefer to support vulnerable lawmakers than to support Kishida.

Komeito sees only a downside to supporting the LDP proposals. In the by-election in Shimane 1 district, Komeito supported an LDP candidate who lost by a wide margin to the Constitutional Democratic Party (CDP) candidate. The lesson that Komeito took was that a coalition with the LDP would work against them in future elections. Komeito might also have realized that any compromise on revisions to the PFCA would send a wrong message to the voters.

Kishida has been promising to restore public confidence in politics by restructuring the system of political fundraising and expenditures, including the addition to the PFCA of stricter rules on political funds. But when he approved the LDP’s draft of reforms, he did not take Komeito’s frustration into account. “It became an effective draft not to repeat the same scandal, and I will make it for restoring confidence for politics,” said Kishida as the LDP unilaterally submitted the draft to the Diet.

Komeito did not submit its own draft to avoid jeopardizing its relationship with the LDP. It is still possible that the LDP and Komeito will reach a deal as negotiations in the Diet continue. The CDP submitted its own draft co-sponsored with the Democratic Party for the People. The CDP draft includes complete abolition of the policy activity fund.

The polls in May showed the fundamental unpopularity of the Kishida administration. The approval rating for the Kishida Cabinet was 24%, two points down from April in the poll of Asahi Shimbun. The Yomiuri poll showed a 26% approval rating, up one point from April. In the poll of Mainichi Shimbun, the CDP overtook the LDP with 20% favoring the CDP and 17% the LDP. Kishida’s weak leadership in the negotiations over PFCA has solidified the unpopularity of his administration.

Kishida now is isolated not only from the LDP’s coalition partner but also from members of his own party. Former Minister for Digital Affairs, Takuya Hirai, has questioned Kishida’s leadership. “The LDP dug its own grave making the issue complicated by dissolving factions or imposing penalties on the lawmakers,” said Hirai. Kishida made the decisions on factions and penalties.

One of the lawmakers in the Abe faction who was penalized for his involvement in the slush fund scandal, Hakubun Shimomura, demanded that Kishida conduct another interview of a former prime minister, Yoshiro Mori, in order to reassess Mori’s role. Kishida had told the Diet that he had confirmed that Mori had no involvement. However, in a magazine article, Mori said that Kishida had not asked him about it.  Shimomura asked for a further investigation of Mori, citing Kishida’s responsibility as the president of LDP.

Kishida seems to be losing grip in the LDP. Kishida punished LDP lawmakers who were involved in the slush fund scandal. The former Chair of the LDP Policy Research Council, Koichi Hagiuda, was suspended from any leadership position for a year. However, Hagiuda was allowed to retain his position as president of the LDP Tokyo branch where he is expected to manage the campaign leading to the gubernatorial election in July. Although the LDP generally distinguishes local leaders from national leaders, Hagiuda’s position in Tokyo, notwithstanding his suspension at the national level, reflects something of a double standard.

Gaffes by LDP leaders have compounded the trouble facing the Kishida administration. The chairperson of the LDP Political Reform Council, Keisuke Suzuki, said that political reform was partly a political maneuver to weaken the LDP. The Minister for Foreign Affairs, Yoko Kamikawa, was forced to retract her remarks in the Shizuoka gubernatorial campaign. Meeting with women voters, Kamikawa asked rhetorically, “What is a woman who would not give birth to” the candidate. Media reports suggested that Kamikawa regarded woman as the sex that gives birth but not one that has a choice in the matter.

Many are wondering who would replace Kishida. Former Chief Cabinet Secretary, Katsunobu Kato, indicated the possibility of his running for LDP president, if he were asked to do so. Shigeru Ishiba, who has received the highest polling numbers as a potential replacement, was reportedly asked to run, in a meeting with former Premier Junichiro Koizumi and his colleagues. Kishida’s own prospects for re-election this fall continue to dim.

Incomplete Deal over Political Reform in Japan

Promises to keep

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
May 12, 2024. Special to Asia Policy Point

Facing public criticism over the slush fund scandal, the Liberal Democratic Party (LDP) and its coalition partner, Komeito, on May 9 reached a rough agreement on reforming regulations governing political funds.

Although they agreed on new rules for greater transparency, both parties failed to agree on specific measures that are essential for the restoration of public confidence in politics. The limited reforms are unlikely to encourage voters to hold a better view of Prime Minister Fumio Kishida’s leadership skills or to increase their support of him. Thus, it seems likely that the LDP and Komeito will continue their discussions to bridge the gaps.

The two parties basically agreed to hold each lawmaker more accountable for the management of political funds. A new rule would require a lawmaker to submit a “certification” of his political funds report. If an accounting manager failed to account for funds properly and was found guilty in a court, and meanwhile the certification was found incorrect, the lawmaker could lose his Diet membership.

LDP and Komeito also agreed to lower the threshold for disclosing the identities of purchasers of fundraising party tickets and the value of the tickets—but they did not agree on a new threshold. Currently, a political organization must report the name of any contributor who purchases tickets worth 200,000 yen or more.

A new, lower yen threshold for tickets is also in limbo. Komeito has argued for a 50,000 yen minimum, the same amount that triggers disclosure of donations to a political organization. The LDP has insisted on a threshold of 100,000 yen out of a concern that disclosure of the identities of purchasers will affect their businesses and in turn discourage ticket purchases.

“Policy activity fund” is another point left unresolved. Each party receives an appropriation from the government that the party places in its policy activity fund.    Each party then allocates funds to individual lawmakers. Lawmakers are supposed to spend the funds on election campaigns, but, by virtue of an exception in the Political Funds Control Act, a party is not required to report how the transferred funds are spent.  Both parties agreed that the expenditures should be made public.

The manner of disclosure, however, remains in dispute. Komeito has proposed that each party submit a list of specific expenditures and their purpose. The LDP will agree only to the disclosure of categories of expenditures and not specific amounts or their purpose. The LDP argues that its approach protects “freedom of political activity.”  But the fund is a government appropriation – that is, it is funded by taxpayers. A party can hardly be responsible to the taxpayers unless it makes details of the fund public.

There have been reports that some LDP leaders have transferred funds to an “unregistered political organization,” which is mostly free from disclosure regulations.  In response, the LDP-Komeito agreement includes a new rule for the disclosure of transfers annually of ¥10 million or more to these unregistered organizations.

The agreement does not address political donations by companies and organizations. Although Komeito is willing to discuss this issue, the LDP firmly opposes any reforms that would change current arrangements. The opposition parties, including the Japan Innovation Party (Nippon Ishin-no-kai), call for a complete prohibition on these donations.

The Constitutional Democratic Party (CDP) demands a ban on any fundraising parties and the termination of the policy activity fund. To these ends, the CDP, together with the Democratic Party for the People, is preparing a bill to amend the Political Funds Control Act. As debate in both Houses continues, the unwillingness of the LDP-Komeito coalition to engage in political reform is becoming obvious.

The failure of the LDP and Komeito to reach agreement on a full range of political reforms can only be attributed to Kishida’s lack of leadership.

Kishida needed an agreement with Komeito on thorough political reform, especially after the bitter defeat in three by-elections in April. After returning from trips to France and South America, Kishida urged LDP leaders to accelerate the discussion with Komeito. However, the negotiations resulted in consensus only on modest reforms. Afraid that negative public reaction will imperil their chances in the coming election, some LDP lawmakers criticized the agreement for failing to demonstrate a commitment to political reform.

For his part, Kishida expressed satisfaction. “The parties wrapped up the measures for not repeating the same scandal,” Kishida told reporters. This response made him look like he is driving a car on automatic cruise control.

Moreover, his credibility is in doubt. A monthly magazine, Bungei Shunju, included an interview with a former head of the Abe faction, Yoshiro Mori. In Diet debates earlier this year, Kishida said he had asked Mori about the kickback system in the Abe faction. In his interview, Mori said that Kishida had never asked him that question. Kishida insisted that he could not confirm Mori’s involvement in the scandal.

Kishida’s inability to explain the entire scandal is at the core of the public’s frustration. In the first trial of the lawmakers and accounting managers of the LDP for failure to report surplus payments, Jun-ichiro Matsumoto, the former accounting manager of the Abe faction, did not say how or why the LDP’s leaders continued to discuss the kickback system. It is thus not the court, but political leaders who are responsible for investigating how the secret fund was controlled.

The Weak Yen Problem

No easy solution

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
May 6, 2024. Special to Asia Policy Point

The yen-to-dollar exchange rate has moved in unusual ways over the past week. The foreign exchange market’s expectation that the gap between the low interest rate in Japan and the higher interest rate in the United States will not narrow soon has caused the yen to depreciate. Frustrated with this development, the Bank of Japan apparently has intervened at least twice in the FX market, once on April 29 and again on May 2, to increase the yen’s value against the US dollar. Yet so long as inflation persists in the US economy as it has done over the past few years, the weakness in the yen cannot be remedied, unless the BOJ plans to increase the inflation rate, which would complicate monetary policy.

The yen began its recent journey through the foreign exchange markets on April 26. At a press conference that day, the governor of the Bank of Japan, Kazuo Ueda, said that “Depreciation of yen has had no major influence on underlying inflation so far.” He insisted that monetary policy would not attempt to address foreign exchange rates. He also did not indicate when the Bank would start reducing its purchase of Japanese government bonds.

The market interpreted Ueda’s comments as a sign that the BOJ would not raise interest rates for the time being. That being so, the market believed that the wide interest rate gap between Japan and the U.S. would continue for some time. Money is generally supposed to flow to a currency with a higher interest rate. After the BOJ’s monetary policy meeting, at which the interest rate was left unchanged, the yen was sold, and the dollar was bought. At mid-day on April 29, the foreign exchange rate reached 160 yen against U.S. dollar for the first time since 1990.

A curious trend then began within the hour. The rate rose to 155 yen against dollar, dipped to 157 yen to the dollar, and then settled at 154 yen. These abrupt ups and downs invited speculation that the government of Japan had intervened in the foreign exchange market – unannounced. The Vice Minister of Finance for International Affairs, Masato Kanda, refused to comment. However, looking at the BOJ’s account balance, news organizations reported that the BOJ was likely to have intervened at the request of Ministry of Finance. The BOJ’s estimated current account balance dropped 7.56 trillion yen between April 29 and 30. When this balance drops, foreign exchange firms will experience offsetting increases. However, between April 29 and 30, the firms’ balances increased between 2.05 and 2.3 trillion yen.

The 5 trillion yen gap between the BOJ and the firms is thought to be the amount of the BOJ’s intervention on April 29. This amount approached the BOJ’s largest single-day intervention of 5.6 trillion yen in October 2022.

But the unusual moves in the foreign exchange market did not stop there. After the likely intervention on April 29, the yen still exhibited gradual weakness. Just after the Federal Open Market Committee of the U.S. Federal Reserve Board announced, on the afternoon of May 1 (U.S. Eastern Daylight Time) and the early morning of May 2 in Japan time, that it would leave the target range for the federal funds rate unchanged, the yen suddenly rose from 157 yen against dollar to 153 yen. The consensus view is that the BOJ had intervened again to the tune of 3 trillion yen.

The market was surprised at the second intervention because the yen seemed to be appreciating. The U.S. announcement of no change to the federal funds rate had stimulated purchases of yen. The market previously expected BOJ to intervene when the exchange rate reaches 160 yen to the dollar. The second possible intervention on May 2 occurred before the rate had reached that level, thus clouding expectations of when the BOJ would defend the yen. The exchange rate rose further to 151 yen to the dollar on May 3, after the U.S. jobs report showed a slowdown in hiring. The U.S. Labor Department announced an increase in payrolls of approximately 175,000, well below predictions of approximately 243,000.

The BOJ appears to have intervened in the foreign exchange market because the negative impact of the weak yen on the Japanese economy cannot be ignored. “If excessive fluctuation occurred by speculations, it poses negative impact on people’s life. We firmly deal with it,” said Kanda when asked about the first intervention on April 29.

A weak yen causes the prices of imported goods to rise and exerts downward pressure on real wages. Prime Minister Fumio Kishida has focused on returning the fruits of economic growth to the people, expecting that wages would rise faster than prices. He has also planned a tax cut for June. A depreciating yen may erode the effect of the economic policies of the Kishida administration, which is suffering from historically low approval ratings. Intervention in the foreign exchange market is unavoidable for the administration.

However, the effect of any intervention will be limited. The weak yen is the result not just of the interest rate gap between Japan and the U.S., but also of the relative strength of the two economies. Inflationary pressure is still strong in the United States. Wages are growing at a relatively high rate, encouraging consumption that leads to inflation. The Chair of the Fed, Jerome Powell, said in his press conference on May 1 that the members of the FOMC “do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent.” Alternatively, the members “are also prepared to respond to an unexpected weakening in the labor market,” he said.

The Fed has shown no sign of another increase in the target rate, but U.S. wages are still increasing. The BOJ’s intervention in the foreign exchange market has no realistic chance of narrowing the interest rate gap with the United States.

Intervention is not a popular tool for adjusting foreign exchange in the international economy. U.S. Treasury Secretary Janet Yellen said that currency interventions should occur only in “very rare and exceptional circumstances,” when markets are disorderly with excessive volatility. Whether the interventions will help the Kishida administration to survive the aftermath of the slush fund scandal is uncertain.

Voters Strike a Blow Against the Kishida Administration

But not a knock out punch

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
April 29, 2024. Special to Asia Policy Point

On Sunday, April 28, voters firmly rejected the Kishida administration and the Liberal Democratic Party (LDP). In three by-elections of the House of Representatives, the LDP lost all three seats. The Constitutional Democratic Party (CDP) won all three races.

The results reflect public frustration with Kishida’s handling of the slush fund scandal and the LDP’s slow progress on political reform. The elections dealt a significant blow to Kishida’s efforts to preserve his administration.

By-elections are held twice a year, ordinarily in April and October, when a seat of any district of both Chambers of the Diet is vacant, either by resignation of a lawmaker, death or for other reasons.

One of the three by-elections, the election in the Shimane-1 district, followed the death of the former Speaker of the House of Representatives, Hiroyuki Hosoda. Hosoda was the head of the Seiwa-kai faction, also known as the Abe faction, which was at the epicenter of the slush fund scandal. Hosoda was also suspected of having close ties to the Family Federation for World Peace and Unification, the former Unification Church, and of having sexually harassed a female reporter.

In the one-on-one match-up in Shimane-1, Akiko Kamei of the CDP defeated Norimasa Nishikori of the LDP by a margin of 25,000 votes. It was almost the same as Hosoda’s winning margin in the last election in 2021. Swing voters who voted for Hosoda three years ago shifted to Kamei.

Kamei’s victory was the LDP’s first loss in this highly conservative district since the current election system was introduced in 1996. Although the Shimane branch of the LDP has been split since the gubernatorial election in 2019, the result of the by-election is widely interpreted as a protest by LDP supporters against Kishida’s indecisive handling of the slush fund scandal.

The second by-election, held in the Tokyo-15 district, filled a vacancy left by the resignation of the former LDP Representative, Mito Kakizawa. He stepped down after his arrest on suspicion of bribery in a mayoral election in Koto city, Tokyo. The LDP did not have a candidate on the ballot, and the election became a contest among nine candidates of the opposition parties.

Natsumi Sakai of the CDP won the race, with the support of the Japan Communist Party. Sakai’s victory showed that the CDP and the JCP can work together successfully in a race that does not include a LDP candidate. The Japan Innovation Party, or Nippon Ishin, took third in the race. A candidate supported by the popular governor of Tokyo, Yuriko Koike, came in fifth.

The third by-election was held in the district of Nagasaki-3 after the resignation of Yaichi Tanigawa. He had been indicted on charges of receiving over 40 million yen in kickbacks from the Abe faction. The LDP did not have a candidate in the race. The CDP’s Katsuhiko Yamada won the seat with 53,000 votes, twice the number of votes that Ishin’s candidate received.

The message of the results in Tokyo-15 and Nagasaki-3 is that voters who gave up on the LDP turned to the CDP, rather than to Ishin. Although the LDP did not field a candidate in two of the three districts, the LDP was seen as suffering defeats in three elections. “It was an extremely severe result. We hope to restore confidence through accumulating efforts for political reform and leading political agenda to solution,” said LDP Secretary General, Toshimitsu Motegi, on the night after the elections.

Defeat in Shimane was a particularly significant blow to the Kishida administration. Typically, the prime minister will join campaigns only for winnable districts in a general election. Kishida unusually campaigned in Shimane-1 twice. The LDP’s loss surely tarnished Kishida’s reputation.

The LDP tried to avoid outright voter rejection by not offering candidates in Tokyo-15 and Nagasaki-3. But the sweeping victory by the CDP and low voter turnout in those two districts showed considerable resentment of old-style LDP politics – the undisclosed use of political funds. The results in the two districts may signal a trend in other districts all over Japan. Indeed, they may mark the end of the era of LDP’s unilateral domination.

The results of the by-elections shocked LDP lawmakers. They will now be forced into close races in the next election. They will certainly oppose a snap election. An attempt by Kishida to call one in June would instigate a movement in the LDP to replace Kishida. Party members will look for a leader who can reduce the number of victims of an unpopular leader in next election.

So far, such a movement has not materialized. Leaders of the Abe faction had questioned Kishida’s leadership. But they have been inactive since they were subjected to severe penalties in the aftermath of the slush fund scandal.

Although Motegi or former Premier Yoshihide Suga have tried to rally some in LDP, there is not a movement for either. The most popular figure to replace Kishida, Shigeru Ishiba, has not decided to run for the presidential election. A strange silence has descended on the LDP. But it is likely that someone or something will ignite a movement against Kishida, as the party heads to the presidential election in the fall.

Even the CDP cannot be optimistic about the next general election. Their three victories were the result of LDP errors. A framework of electoral cooperation is essential if other parties are to replace an LDP administration. The Head of the CDP, Kenta Izumi, once told reporters that it would take five years for CDP to achieve a regime change. It is up to Izumi to build a viable strategy quickly to replace the LDP in the next general election.