Author: Toshio Aritake

TOKYO, Feb. 11, 2023—On Feb. 10, Kazuo Ueda, a scholar and former Bank of Japan policy board member, said he had accepted to succeed the outgoing central bank governor Haruhiko Kuroda. The Japanese and foreign media reported that the appointment was a total surprise and that Ueda would continue the current virtual zero interest rate monetary policy. The media miserably missed the point: Ueda was chosen as the first scholar as post-World War II period central banker not for his competence, which he has much, but because the Japanese government, a.k.a., the Ministry of Finance, and the BOJ do not want to be held responsible for the bank’s 10-year-long lax monetary policy that was formed on it by the late prime minister Shinzo Abe.
Ueda was chosen after Masayoshi Amemiya, current voce BOJ governor who has been in the bank since his graduation from school, refused to accept. Amemiya clearly thought that if he accepted the post, the BOJ would be in a double-whammy situation: blamed if it prolongs the ignominious zero rate policy or ends the policy or raises rates aggressively, which would sharply increase the cost of refunding Japan’s 1,000 trillion yen government debt and spark a financial chaos, such as commercial bank losses on their Japanese government bond (JGB) holdings.
But grade school students know that the present BOJ monetary policy to keep short-term interest rates near zero (it grudgingly raised the rate by 0.25% recently) is not sustainable. The Tokyo financial market has been abuzz with speculation that after Kuroda steps down on April 8, the bank would have to start tightening monetary policy more visibly and possibly aggressively in the face of soaring domestic inflation, which, by dubious government data, has been clicking nearly 10 percent while headline inflation is 20-30 percent year-on-year.
A primary reason why pressure on the bank to follow up on its ¼ point hike has been muted was for the U.S. dollar’s fall against the yen past its recent rise above 150 yen to the 130 yen level now. Yet domestic price rises are becoming difficult for the Japanese public to stomach as producers and retailers are poised for more hikes while the government is scheduled to reduce or cut off subsidies for essentials as it is scheduled to raise taxes for doubling Japan’s defense budget.
Ueda has been expressing opinions in favor of continuing the zero rate policy as well as opposite. Politicians and bureaucrats historically have been mobilizing academia as a convenient tool for their objectives with the view that scholars can be swayed easily with pressure. It’s the reason why most of Japanese government policy and study commissions are headed by university professors as chairs. I am hoping that Mr. Ueda registers the central bank’s ground rules as independent and free from government and outside influences.

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TOKYO, Feb. 10, 2023—The Japanese government Feb. 10, 2023 adopted a policy to develop fast nuclear power reactors as a part of what it calls green transformation to mitigate carbon dioxide emissions and secure stable energy sources. The decision means Japan would enrich spent nuclear fuels into uranium and plutonium for reuse – but it also would mean the enriched fuels can be used as nuclear bombs to be installed on missiles.
The cabinet of prime minister Fumio Kishida would immediately submit legislation for omnibus amendment of relevant laws and ordinances, most notably the Electricity Business Law and the Nuclear Reactor Regulation Law.
The policy entails authorizing the construction and operation of next-generation fast reactors on nuclear power stations where the government had decided to decommission the reactors earlier partly in response to the March 11, 2011 Fukushima nuclear power meltdown. The policy also allows electric power companies to continue operating nuclear power reactors beyond the current legal duration of 60 years.
The Kishida cabinet on Feb. 10, 2023 also affirmed that the government will foot responsibility for final disposal of high radiation level nuclear waste, which amounts to empowering the government to force local governments to accept the localities as final disposal sites, however toxic the waste.
Building fast nuclear reactors, which the Ministry of Economy Trade and Industry is experimenting in the United States with General Electric, is expected to take several years or even longer – which is fine for the ministry whose existential lifeline has been nuclear power and eventually the development of nuclear weapons, not renewable energy technologies as the policy is called, GX green transformation.

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TOKYO, Feb. 10, 2023—Japan’s anti-trust government office is considering regulating Apple Inc. and Alphabet Inc. operating systems to help nudge iOS and Android app prices lower by requiring what is called ‘prior regulation’ to the two companies, government officials said Feb. 10, 2023.
The planned regulation’s details were not available. It was clearly along the lines of discussions that the Japan Fair Trade Commission’s study panel that Feb. 9, 2023 released a report named the ‘market study report on mobile OS and mobile app distribution.’ It said as many as 97% of Android apps are downloaded from Google Play even though other app stores of Amazon and Samsung offer same apps to consumers. Apple disables downloading iOS apps except from its App Store.
Problems that potentially violate Japan’s anti-monopoly law, JFTC said, included: ‘self-preferencing’ related to OS’s with restricting access to smartphone functions, unfavorable updates for competitors, app store management,data use generated by third developers,influencing consumer’s national choice, among many.
JFTC said it would, through prior regulation, promote consumer switching by allowing data portability and other methods, as well as promoting new OS’s and app stores.
I suspect that JFTC has borrowed most of what’s written in the report from the EU and U.S. competition authorities so expect little proactive regulatory move from them. Their knowledge about what’s happening in the real world often is outdated.

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TOKYO, Feb. 7, 2023—Nina Simone’s voice wakes me up, John Coltrane’s saxophone sound in his Love Supreme prods me to pray to God, Ramsey Lewis’ piano jiggles my body and hands to clap, Wes Montgomery’s guitar makes me drive smoothly.
They are among many of my favorite jazz musicians, and few of them are alive.
I have been listening to jazz since I was 16. Art Blakey’s drum beat in his iconic Mornin’ album pushed up my adrenalin to the highest and sweat poured from all over my young body too naive to be exposed to funky, what then was radical tunes.
I listen to the music decades later, albums from the olden – and golden – days of jazz and YouTube and other new media for young players.
I listened to some new numbers young jazz musicians played at this year’s Grammy. They played well, beautiful tunes and voices. They are new real pros, some of them playing better than the musicians of bygone days. Recordings were superior to what were of the past scratchy vinyl disk noise. Maybe I should purchase some by downloading, I told myself. But I have not done that, like I did in the 1970s and 80s. I couldn’t do it, somewhat. Something is different, so much different now.
I’m listening to Nina Simone now.

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TOKYO, Feb. 3, 2023–Japan’s farm produce exports hit an all-time high of 1.4 trillion yen ($12 billion), or about 1/50^th of its GDP, in 2022 and growing 14.3 percent from 2021, as the government is fielding a years-long export campaign disregarding domestic consumer outcries that they are over-bidden by foreign countries.

Farm minister Genjiro Kaneko read a bureaucrat-prepared statement at a Feb. 3 news conference at the ministry’s press club, which was broadcast by the Japanese media, that misleadingly said domestic farm produce consumption is taping off corresponding to society aging and declining child births. ‘Japan needs to tap the overseas markets to help domestic farm production’ and that the government will collaborate proactively with overseas businesses to in what he said was a ‘market-in’ undertaking.

True, domestic consumption of domestically produced seafood, fruit, vegetables and other produce has been sluggish over years, especially fish, but the Japanese are consuming more imported farm produce than ever.

In 2022, Japan imported 10.17 trillion yen worth of farm produce, a record sum and up 14.4 percent from 2021, according to farm ministry data. It’s primarily because imports are much cheaper than comparable domestic produce. Japanese consumers want to put on the table as often as possible Kobe beef, salmon eggs, sea urchin, and Ise shrimp, but the reality is they can’t because of steep prices.

Of 2022 exports, China stood out as the largest destination totaling 278 billion yen, up 25 percent. China imported all value-added products such as sea cucumbers and Kobe beef. Hong Kong ranked 2^nd with 208 billion yen, shrinking 4.8 percent, reflecting the long COVID-19 fallout. The United States imported193 billion, up 15.2 percent, followed by Taiwan’s 148 billion yen, up 19.6 percent. Fishery product exports grew 28.7 percent and dairy 11.1 percent. A ministry official told me that had it not been for poor fish capture, exports should have been much stronger.

Though it’ll be a while before official release, the latest data implies that Japan’s food self sufficiency, which has been edging lower despite the government’s efforts to keep it above 40 percent on a calorie basis, stood at 38 percent in 2018. The ministry said Japanese farm produce prices are ‘high value-added’ and thus prices are much higher than imports. Excluding rice, milk, eggs and a few other products, self-sufficiency ratios are below 50 percent, with cooking oil and wheat at critically low levels of below 20 percent and probably barely 10 percent now in response to the Russia-Ukraine war.

So, data proves Japanese consumers are threatened by long-term food insecurity, yet, the government shrugs off the condition and instead cozying up to domestic producers with generous subsidies and other handouts for winning support of local heavyweights for the ruling Liberal Democratic Party.

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TOKYO, Feb. 1, 2023—At formal banquets, Chinese hosts would lavish immaculately cooked giant abalones, scallops, sea cucumbers, shark’s fins, and other seafood dishes artistically arranged on beautiful plates to foreign guests who were so impressed and mesmerized by the taste they did not bother thinking where the ingredients came from.

It was in 1984 when Japan harvested 12.82 million tons of fish, the peak year of Japan’s booming fishery industry as the world’s largest fish capture country. Japan exported surpluses to China in dried form as sought by Chinese food industry that relied on Japanese and other foreign suppliers for the treasured sea food ingredients as China lacked fishing technology and processing harvested fish. China’s fish catch was about 8 million tons, paring with that of the United States, and a big portion of the quantity was carp and other fresh water fish.

In 2020, Japan’s catch 

In 2020, the Japanese capture tonnage, including coastal and inland fish culture farming, was 4.23 million tons, or only one-third the 1984 tonnage. Meanwhile, China’s quantity – including both ocean capture and costa/inland culturing – rose to 83.9 million tons, the largest and accounting for 39 percent of the worldwide tonnage of 214 million tons. Fish capture alone, excluding culturing, represented 18 percent of the global total. The data was collected by The Prospect from the Japanese Fisheries Agency, FAO, and other sources.

The numbers graphically show how, in a short time span, China has become the world’s largest and voracious seafood consuming country whose 1.4 billion people until the mid-1980s filled their stomach with humble meals. The emergence of successful Chinese entrepreneurs meant that what were served at stately banquets until four decades ago with expensive imported ingredients have come to be consumed by those nouveau riche, and passively importing them from Japan and elsewhere was not enough. So China decided to become a maritime nation, building runways on the islands it built in the South China Sea and sending massive fishing vessel convoys all over the world to directly and ruthlessly catch fish. And as its low-paid workers began tasting fish, its ships captured more fish globally.

But how has China become the global fishing behemoth despite the fact that its fishing are recognized by the U.N. Law of the Sea and other international treaties and fishery agreements, is only one million square meters, which is less than Japan’s?

A Japanese Fishery Agency official Feb. 1, 2023 told me in a telephone interview that China captures nearly 3 million tons of fish that are not covered by international treaties and agreements, such as those on tuna and salmon, in waters outside sovereign exclusive economic zone (EEZ) waters. Plus, Chinese fishing vessels operate in other countries’ EEZs by ignoring international rules, as they often do around Japan-claimed Senkaku Island, the Sea of Japan, and South China Sea.

There are some 8 million fishermen recognized formerly by the Beijing government but the real number is said to be 12 million or more. Many Chinese fishing boats operate ‘Without 3’ – fishing operation license, boat registration and inspection certificates. Those are the ones that gathered off Senkaku Island, reefs claimed by the Philippines and Vietnam, as well as as far as U.S., Canadian ,Chilean and Peruvian waters, the official explained.

The number of Without 3 ships total as many as 12,000, on top of 22,000 or so formally registered. In 2000, Japan and China exchanged a bilateral fisheries agreement that covered 17,500 Chinese fishing vessels, and only 800 Japanese ships.

This alone suffices to guesstimate the Chinese fishing aggression but on top of that, Chineses fishing boats use many illegal tools, for example, extremely bright lighting to attract fish to the sea surface and catch fish en mass, Japanese government officials have told me earlier. 

Instead of regulating those ships, the Beijing government often defend them when confronted by foreign authorities, such as the Japanese guard patrol ships near Senkaku and other Japanese south islands, they said.

The Fisheries Agency official I interviewed said, however, China’s over-fishing isn’t the only reason why Japanese fish production is decreasing. ‘Japan’s coastal water has become so clean over those decades that not enough nutrition reach fish and marine resources,’ he said. Is that so?!

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TOKYO, Jan. 18, 2023—The Bank of Japan, the Japanese central bank, Jan. 18, 2023 decided to keep short-term interest rates at 0.5% and continue accommodative monetary policy, dispelling speculation for a further tightening following its December 0.25% rate hike. The latest policy action underscores that its governor, Haruhiko Kuroda, is finding himself trapped, having no alternatives other than continuing the easy monetary policy, which one day would show up as nasty inflation.
Kuroda, who has been in his position for far too long, since March 2013, adopted the zero-rate policy right after his appointment, when the central bank held about 12 percent of aggregate Japanese government bond issuance at the time. Under his policy, the bank’s hold of the total JGB issuance quadrupled over the past 10 years and in the July-September 2022 quarter, topped 50 percent of the total to 50.3% of the total JGB issue balance of 1,066 trillion yen. Including short-term bills, the ratio was 44.9 percent. In the quarter, insurers and pension funds followed with 22.2% and banks and financial institutions 11.2%.
Kuroda came from the Ministry of Finance, which issues JGBs. The ministry is concerned about any blip in interest rates because even a 1% rise amounts to 10 trillion yen in fresh spending. So it is implicitly telling Kuroda to keep rates artificially low, disregarding calls for raising rates to historically healthy levels from the public sector.
The central bank’s huge JGB holding means that interest rate rises mean the bank incurs investment losses if it sells pre-maturity JGBs, the reason why it is entrapped in its cold JBG bath. The bank also may be forced to sell before maturity if unpredictable developments take hold in the financial market – such as soaring rates – and if it holds on to them until maturity, it may take a hit.
The U.S. federal debt ceiling currently is $31 trillion. U.S. Treasury securities are smoothly sold in regular auctions as they bear reasonable coupon rates. The MoF meanwhile is experiencing slow bidding for JGBs from banks because of low coupon rates. Banks are murmuring that if JGB rates continue this low, they may not be able to keep on buying. If they fail to buy, that could be a tigger for interest rate spiral.

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TOKYO, Jan. 16, 2023—On Jan. 15, 2023 night, I was at a small reunion of my school day friends at an Italian restaurant not far from the Imperial Palace. A small topic during our dinner reminded me of Michael ‘Buck’ Tharp, a head-to-toe journalist who died on Jan. 13, 2023 of cancer caused by Agent Orange, that highly carcinogenic chemical that the U.S. military used during the Vietnam War.
One of my friends is a successful yet brash business executive, amassing what seems to be billions of dollars over years, owning at leasts three large (by tight Tokyo standards, of course) houses in a luxurious neighborhood. He said that he, like others at the dinner table, approach life’s golden age, was readying to step down as a majority shareholder and CEO of his company. What then are you going to do?, I asked.
‘I have ordered a catamaran!,’ he declared proudly. ‘It’s being built in France. Japanese dockyards are not up to nicely fitting a big catamaran technologically, so I had to order it to a French builder. It will be delivered to me by year-end or early next year. It’s too big to be moored at a Tokyo pleasure yacht harbor so I decided to keep it in Okayama, on the Seto Inland Sea. You guys are welcome to stay on board when it arrives. The ship’s living and dining room is as big as this restaurant.’ I intervened, saying that he can use some of his money for the world’s hungry and needy and send to Ukraine. My friend turned quiet.
A Shinkansen bullet train ride to Okayama and his boatyard takes almost a full day from my home. My friend wants to go there at least once a month, for several days, plus to his villa in the prestigious Karuizawa resort in Nagano every weekend as he has been doing over the past 20 years or so, when he’s not flying to other countries.
So, as we finished our meal (which was not great and wine was way over-priced), this rich friend told us to let us go Dutch and split the bill. Which we did, and left the restaurant. All of us heading toward a subway station, except him and his wife, who kept a limo waiting for them.
This reunion experience reminded me of Mike Tharp, who had been an active journalist until his cancer was found a few years ago. Almost 20 years ago, Mike revisited Japan from California (I believe) when he was working as the editor-in-chief of the Merced Sun Star, a local newspaper. We met at the Foreign Correspondents Club of Japan and I invited him to a sushi dinner. Several years later, at a former Japan hands journalist reunion at the Overseas Press Club bar in midtown Manhattan, March 19, 2010, Mike told me, ‘The sushi dinner you treated me was so delicious that I still remember it!’ He told me the same when he reciprocated my dinner treat with lunch when he was living in Long Beach, CA about the same period.
As such, Tharp-san never forgot favors given him. After his death, I tried to remember his writings, what he said and did, interactions with people. Mike Tharp wrote a front-page cover (I thought it was a full-spread entire page) on the Aug. 16, 1977 Elvis Presley death. It was full of tears, warmth and empathy for Elvis. Mike thanked Elvis for the music as if he cannot live without it. Mike was a man who thought and concerned about others before him. That’s why and how he made himself a great, affable journalist. Warm, embracing, funny and honest. He was 77 years old.

R.I.P., Tharp-san,


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TOKYO, Jan. 12, 2023—The U.S.-Japan “2+2” joint statement released after a Jan. 11, 2023 Washington, D.C. meeting reads ominously as a military morning assembly call to alert soldiers about an approaching war. It said that if China strives to challenge the international order in the Indo-Asia-Pacific region, including Japan, the United States would deploy its capabilities, ‘including nuclear’ power.
To the best of my knowledge, the word ‘nuclear’ has been rarely used or none at all in diplomatic documents exchanged between the two countries, and it shows the rising level of tension between the United States and China over the Taiwan Straits as the Chinese military invades into Taiwan airspace and waters almost daily.
‘The Ministers concurred that China’s foreign policy seeks to reshape the international order to its benefit and to employ China’s growing political, economic, military, and technological power to that end,’ the joint statement said. ‘This behavior is of serious concern to the Alliance and the entire international community, and represents the greatest strategic challenge in the Indo-Pacific region and beyond.’
The meeting was between the two countries’ foreign and defense ministers. It was organized as a precursor to Japanese prime minister Kishida’s visit to Washington this week.
The statement’s language was of little surprise. Both countries have used similar expressions when they held similar 2+2 meetings with other countries, most recently between the U.S. and the Philippines.
What caught my eyes more was a paragraph that appears in the upper part of a pretty long statement:
‘The United States restated its unwavering commitment to the defense of Japan under Article V of the Japan-U.S. Security Treaty, using its full range of capabilities, including nuclear.’
I have known for a long time that since Japan’s surrender to the allied forces in 1945 the United States had been landing military aircraft and anchoring naval ships carrying nuclear weapons to Japan, yet both countries have never officially admitted it, let alone writing it down in official bilateral documents. The statement was intended to warn the Chinese that Washington is seriously concerned about the Chinese aggression toward Taiwan as well as in the entire Indo Pacific and East Asian regions, and that save nuclear weapons, it would mobilize all available military capacities to confront the Chinese.
How seriously the United States is handling the Chinese hegemony in the regions is underscored in language that engages Japan to discussing the internal U.S. policy on the use of nuclear weapons. The statement said: ‘The Ministers held an in-depth discussion on U.S. extended deterrence for Japan, as well as on the recently released U.S. Nuclear Posture Review (NPR), and reaffirmed the critical importance of ensuring U.S. extended deterrence remains credible and resilient, bolstered by Japan’s capabilities.
‘They reiterated both countries intend to deepen the substantive discussions at the Extended Deterrence Dialogue as well as through various senior-level meetings,’ it said.
The Biden administration released an unclassified version of the 2022 NPR in November. The latest NPR rejected no-first-use and sole-purpose nuclear deterrent policies, contrary to the president’s election campaign policy in favor of them. The flip-flop is of course in response to Russia’s invasion of Ukraine and China’s increasing hegemony in the Indo-Pacific and Asian regions, though it does not mean the U.S. will prioritize the use of nuclear weapons.

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TOKYO, Jan. 3, 2023—Over the past three decades, young foreigners aspiring to learn Japanese technologies and skills as trainees arrived by tens of thousands annually to be hired by Japanese companies pinched by low-skill worker shortages. Most early generations of trainees returned home as happy pros teaching what they had learned in Japan to their home country employers and for starting their own businesses.Trainee work conditions took turns for the worse dramatically over years saddling them with mounds of debts they cannot possibly pay with meager stipends given by employers and forcing thousands of them to escape from trainee workplaces.
The horrific work conditions of young foreigners who enter Japan under the country’s ‘Technical Intern Training Program have been known over many past years but the Japanese government had hardly taken any administrative action – until now – to ensure supplying virtual slave labor to Japanese companies that are struggling to stem labor costs. On Jan. 1, 2023, the Yomiuri national daily reported in its digital edition that the Ministry of Health Labor and Welfare will send investigators to foreign trainees’ home countries for the first time.
As of October 2021, approximately 350,000 foreign trainees were in Japan, of which 7,167 escaped their employers and believed living in Japan as undocumented aliens. The aggregate number has been growing steadily over years, totaling 228,000 in 2016, and seemed to have peaked in 2020 at about 400,000. Vietnamese accounted for the distant largest of the total, accounting for more than 40 percent, followed by Chinese as second largest and then Philippines.They worked in such labor-intensive fields as farming, fishery, construction, food processing, textile, and metal fabrication. Recent additions are elderly nursing care. (The data are based mostly on MHLW statistics.)
When the trainee program began formally in the early 1980s with the amendments of the Immigration Control Order to admit unskilled labor, the Japanese government’s policy was to accept such workers as exceptions and allow only skilled foreign workers. Trainees can stay in Japan for up to 3 years with a special trainee visas. Over years, though, that policy had been interpreted more generously, and now totally ignored to allow unskilled labor with priority to meet Japanese businesses’ appetite for cheap labor.
Trainees are hired by industry lobbies such as fishery gilds and chambers of commerce. Since those entities are not familiar with relevant labor laws and regulations, as well as languages, they assign hiring details to human resources agencies that take care of documentations in trainee home countries. Those agents would work with trainee home country HR agencies. Since trainees wanting to work in Japan must clear basic level Japanese language skills and other qualifications, they take loans and borrow other forms of money to work in Japan thinking that they can pay off their debts by working in Japan.
They are too optimistic: They stipends from Japanese employers often are a pittance, hardly enough for food and lodging in expensive Japan. According to the Japanese Immigration Control Agency, trainees paid an average of 540,000 yen ($4,1000) per capita, a big sum for many of them.
How their debts have amounted to such a sum is not clear but trainees have been speculating that deep kickbacks are being paid to Japanese agents from trainees’ home country agents, as well as to language schools and other intermediaries.
Whey the MHLW ministry decided to investigate now can be traced to the fact that Japanese businesses are experiencing an unprecedented acute shortage of workers that do manual work, which was formerly called the 3K work (Kitanai (dirty), Kitsui (physically demanding), and Kiken (dangerous) that young Japanese shun. The investigation is not for trainees for sure.
And the MHLW bureaucracy is not serious about the investigation. They want to extricate themselves from complicated labor issues such as this. So they’ll dispatch investigators to Vietnam, China, the Philippines and write up a report to show to businesses what they’ve learned but probably not much beyond that. Their reticence to the issue is underscored by the fact that the ministry budgeted only 33 million yen (#252,000) for the investigation.

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