Author: Toshio Aritake

TOKYO, Feb. 24, 2019—At its regular cabinet meeting Feb. 15, the prime minister Shinzo Abe cabinet approved the on-line use of the national ID card, called the MyNumber card, by hospitals and other medical service establishments empowering such entities to check whether patients are covered by the National Health Insurance program and to discourage non-NHI patients from receiving treatments unless they are covered by other types of medical insurance policies. The cabinet decision coincided with reports that the government is poised to repeal the MyNumber notification paper card issued right after the system and instead require all taxpayers to obtain the IC chip wedged photo-ID plastic card. The bottomline: more privacy data collection and consolidation by the Abe government, probably in violation of privacy protection.
The bill to amend the National Health Insurance Law for Appropriate and Effective Management of the Medical Insurance System (known as Kempo-ho) was submitted by the cabinet to the House of Representatives of the 198th Parliament (25th bill to the parliament). It is expected to be enacted during the current session that runs through mid-June.
It has been the prime minister’s stated policy to enable the government to collect and consolidate as much personal information as possible of the Japanese people and foreign residents in Japan, the center of it being the introduction of the MyNumber card system in October 2015. MyNumber card is supposedly used for social security services, such as healthcare and pension, as well as taxes. The government mailed paper MyNumber notification card right after October 2015, while urging the public to obtain the plastic IC chip wedged, personal mug shot bearing plastic card. But as of October 2018, the third anniversary of the system, the Cabinet Office reported that as many as 53.0 percent of the public did not have it for concerns about security breach and other reasons. The Cabinet Office report was based on physical personal interviews of 3,000 people over 18 years old.
The bill provides that the government would establish an ‘on-line qualification verification’ system that would double-check the MyNumber holder’s identification and qualifications for receiving NHI treatments to rout out patients who have been in arrears in NHI premium payments and therefore do not qualify for NHI treatments. This means that medical establishments such as hospitals and small clinics would have to install the MyNumber card reader to obtain patient information stored on-line as well as in IC chips. It also would allow patients to use the MyNumber photo-ID plastic card in place of the NHI card that each individual currently must hold for visiting medical establishments. For its part, the government can collect patient data – e.g., types of illnesses, diseases, legions, payments for treatment, etc. – into the national medical data base (which the government calls as NDB). And data on recipients of the elderly nursing care as nursing care data base (called the nursing care (kaigo) DB. Based on NDB and nursing care DB, the government can write programs for the elderly’s healthy life and reduce national healthcare spending, which was at about 43 trillion yen ($390 billion) and growing to the tune of population aging.
The bill also is aimed to discouraging non-resident foreign nationals to receive treatments at Japanese medical establishments and sneak out without paying, the practice which is known to be popular in Asian countries as medical tourism to Japan, it said. Another, which is intended for consolidating data and administrative authority to the national government is to reduce the role and the number of regional NHI reimbursement analysis committees.

Abolishing the paper ID card. On-line publications of the Nihon Keizai newspaper and Nikkei Computer magazine Feb. 20 reported that the Abe government is gearing to submit in March 2019 legislation, an ‘administrative procedure on-line promotion law, to the parliament to abolish the current paper MyNumber card and make it almost impossible for taxpayers not to obtain a plastic IC-chip wedged photo-ID card. As of December 2018, the number of MyNumber plastic cards issued was only 12.2 percent of all taxpayers, according to government statistics.

Toshio Aritake

TOKYO, Feb. 16, 2019—As The Prospect warned earlier, Japanese regional banks are suffering badly – and more seriously than analysts, industry officials and the central bank governor had anticipated under the prolonged zero interest rate policy and quantitative easing: Seventy-nine regional banks listed on the Tokyo Stock Exchange have reported earnings decreased 16.0 percent during the nine months ended in December to 693.8 billion yen ($6.5 billion) year-on-year, and of them all, 65 banks, or more than 80 percent of them, incurred decreases or deficits.
The 79 banks forecast earnings to decrease 9.5 percent for the fiscal year, which ends in March 2019, to 876.8 billion yen, and bank officials commented they are powerless to ride out the dismal condition unless Japan’s interest rates return to the healthy, historical path (of 2-1/2 to 3 percent short-term rates).
There were a few banks that reported earnings increases. They focused their business on local lending, instead of purchasing foreign bonds and exotic instructs that bear ‘real interest rates’ instead of Japanese government bonds that offer close to zero.
Prolonged zero rate conditions are forcing regional banks to urge early retirement and bouts of cost cuts but the latest results showed that those endeavors fell short, the condition that should start showing up in large Japanese banks’ earnings more visibly from 2019.

Toshio Aritake

TOKYO, Feb. 14, 2019—By the time the dust from the 2020 Olympic Games frenzy settles over Tokyo, Japan’s Internet regulations could become more oppressive than China’s as the country is set to make it illegal to download all unauthorized content, not even a few lines of newspaper articles or photos to be used as memos for private purposes. The goal: further media control than the already suffocating condition.
On Feb. 13, 2019, a policy panel of the Agency of Cultural Affairs of the Ministry of Education, Culture, Sports, Science and Technology (http://www.mext.go.jp) released a draft policy report for amending the Copyright Law. The report, which was written by the panel’s judicial affairs subcommittee, said the ministry has been exploring revising the law to combat growing rights violations by piracy web sites.
The present law bans in principle unauthorized uploading of most copyrighted products, including videos, movies and music, as well as downloading of videos and movies, and music onto the internet for public consumption. The new amendment seeks to combat unauthorized distribution of all conceivable content including novels, magazines, photos, academic papers, and computer programs. The amendment makes it illegal for individual persons to download unauthorized downloading of animations, illustrations, photos in full or part, including onto individuals’ blogs and social networks. In other words, copy and paste or screen shot would be considered as downloading acts, and hence illegal.
Violations of the upcoming law amendment would be subject to fines and/or prison terms but details would be decided before the ministry submit legislation to amend the law to the current Diet (parliament) session, an official of the Office of Planning and Study of the ministry’s Copyright Division, told The Prospect in a telephone interview Feb. 13. The official refused to be identified under the division supervisor’s directives.
To date since uploading became illegal under the previous law amendment, the official confirmed there has been no criminal or civil charges against violations.
The Japan Society for Studies in Cartoons and Comics (https://www.jsscc.net/info/130533), a cartoonist lobby based in Kyoto, released a statement Jan. 23, 2019 condemning that the proposed amendment would have ‘very serious’ adverse impact on research and production of comics and cartoons. It said downloading news articles, graphics, still photos, and other materials in memo and clipping form has been practiced as necessary routines for years by individual artists.
Toshiaki Tateishi, a vice chairman of the Japan Internet Providers Association (https://www.jaipa.or.jp), told The Prospect Feb. 14 in a telephone interview that the upcoming law amendment would be a precursor to the internet site blocking policy by the Japanese government. If and when site blocking takes effect, ‘Japan’s internet freedom would become inferior to China’s,’ Tateishi said.
Tightly gagging the internet – and with it, controlling the media – is part of Prime Minister Shinzo Abe’s aspirations, and this time, his lieutenants who had orchestrated the proposed wholesale downloading ban (known to be former trade minister Akira Amari, Abe’s top aide Hiroto Izumi, and chief cabinet secretary Yoshihide Suga) jumped on the initiative, which was proffered by Chizuru Suga, wife of the former Kadokawa Dwango Corp. CEO Nobuo Kawakami and a former Ministry of Economy, Trade and Industry official, sources told The Prospect. None of the parties cited above were available for comment to confirm or deny their involvement.
Despite the magnitude of the issue, Abe’s Liberal Democratic Party lawmakers were kept off the loop, the sources said.
Last week, LDP secretary general Toshihiro Nikai complained to Abe about a dinner with executives of six LDP factions at the prime minister’s residence – without informing the event to Nikai.
It is presumed that the three Abe lieutenants wanted to submit legislation to amend the law expeditiously to the current Diet session before April, when many Japanese municipalities hold gubernatorial and other local elections, to be followed by an election of the House of Cou8ncilors of the Diet in June, to ensure the LDP’s victory and further prolong the Abe administration. Abe already has served as prime minister for six years, one of the longest serving leader of major countries, probably next only to Russia’s Vladimil Putin.

By Toshio Aritake

TOKYO, Feb. 4, 2019 — The timing is exotic and interesting for Japan to host this year’s G20 summit, scheduled for the western city of Osaka in June. Blundering it, Japan’s position as the world’s third largest economy could be seen as one of the lowest of OECD countries and even its Asian neighbors would treat it as one of many.

First off, U.S,, European and Asian countries are closely watching, with some expectations and skepticism, how the administration of Prime Minister Shinzo Abe coordinates the fallout of Trump-Xi summit in March, no matter whether the U.S. raises tariffs further on Chinese products or reach some kind of compromise.

Abe’s next undertaking, which should be equally important in the long run, is the reform or repairing multilateralism under the World Trade Organization. It’s a tall task that should require several years to work out a framework but a good head start is needed as soon as possible, or otherwise, the United States under Trump may roar ahead to pursue bilateralism, as he did with Japan last year to start negotiations this year. That would endanger multilateral trade and economic regimes the world has worked so hard to make as the global benchmark in the 1980s.

Japan stands on solid ground in persuading the United States to continue supporting multilateralism as a leading member of the now-ratified 11-member Trans-Pacific Partnership — in which Washington is not a member — and the Japan-EU economic partnership agreement (FTA). U.S. farm produce producers including beef are reportedly expressing concerns about the TPP-11’s adverse impact on U.S. exports, understandably, as Australia is set to benefit a lot from the trade agreement with lower Japanese tariffs to the dismay of U.S. farmers. And effective February 1, 2019, European product prices were slashed sharply.

Toshio Aritake

More details by the East Asian Forum can be found at the following:

Is Japan up to leading WTO reform?

TOKYO, Feb. 2, 2019 – At 45 percent selling 1.56 million cars in calendar 2018, Toyota Motor Corp. commands an uncontested domestic Japanese automobile market share, outdistancing by wide margins Nissan Motor Co. and Honda Motor Co. in that order (excludes mini vehicles with engine size smaller than 0.66 liter as it gets too complicated). The Toyota share, even though it shrank 1.7 percentage point from 2017, is an impressive number that should make its Japanese and foreign rival manufacturers envious but give them breathing space.
But 45 percent is not 50 percent that had eluded Toyota by the early 2010s and sustain for sound sleep during 2020 nights. It may well be the reason why Toyota officials, led by CEO Akio Toyoda, these days do not sound confident about what they are doing. Akio often says – and he reiterated at a 2019 New Year speech – that the auto industry is confronted by ‘once in a century’ sea change.
Toyota clearly recognizes the significance of achieving and retaining a 50 percent market share and once surrendering it, it would be next to impossible to regain it. Japanese electric and electronics manufacturers garnered far higher than 50 percent shares for their audio products in the 1980s, such as Sony’s Walkman, in most global markets but they now are minor domestic suppliers for smart phone headsets and other audio goods giving up the once glamorous posts to Taiwanese, Korean and Chinese. Like those Japanese makers, Apple’s iPhones’ global market share has never reached 50 percent and it is poised to slip further over coming years amid growing competition. In the 1990s, Toyota’s Indonesian market share exceeded 50 percent but now, it is less than 40 percent, even though Toyota’s share there is the largest.
The Japanese domestic automobile market has been undergoing an evolution in favor of imports over the past few decades: Imported cars account for about 1/10th of total domestic sales, at 366,000 of 3.347 million total domestic car sales (again, excludes mini cars) in 2018. Ten years earlier, in 2008, imports totaled 219,000 out of total yearly sales of 3.15 million, or not even 7 percent. The 2018 year-on-year import sales were up 4.3 percent while 2018 domestic overall sales including imports were down 1.3 percent from 2017, so this graphically illustrates imports penetration into the Japanese market and the reason why Toyota and Japanese automakers cannot be complacent.
Toyota surely is seeing more competition globally – American. European, South Korea, and probably Chinese in a couple of years would release low-end gas-powered and electric vehicles. That’s why it is developing MONET on-demand and ride-share joint projects with Japan’s Softbank Corp., Panasonic Corp. for batteries, and many more.
‘Toyota is feeling nervous’ about what comes next’ in terms of consumer demand for motor vehicles and next-gen technology, a former Toyota official told me recently. It’s the reason why Toyota is dabbling into areas previously unbeknown to it by shooting future targets blindfolded.
It’s risky if Toyota relegates its core vehicle features (known as rather boring) of safety and quality (durability, environmental friendliness, ease of maintenance and repair to the dashboard glitz, automated driving and racing performances. After all, the bottomline of a car is to drive you from point A to B safely and securely.

–Toshio Aritake

TOKYO—Finally, Japanese businesses have come to realize that in the modern era, the economy of scale matters far more than in the past, when the Japan juggernauts went after steel, computer chips and autos – as the Koreans and more recently the Chinese are doing for smart phones and other consumer products.
Toyota Motor Corp. and Panasonic Corp., the main battery supplier for Tesla Motors, would formally announce a joint battery manufacturing venture later this week, Japanese media reports said Jan. 21. Toyota would hold 51 percent and Panasonic 49 percent of the joint company, the reports said.
Japan Inc. as a whole pursued an old merchant teaching of producing as much as possible and sell as low as possible prices through the late 1980s, when the country was told by the United States that selling below fair market values constitute antitrust law violations. In response, Japanese manufacturers of steel, radios, televisions, semiconductors, and automobiles swung their business models to one that touts quality ahead of quantity.
The Koreans, first Samsung for semiconductors, then televisions and now smart phones, and later Hyundai for cars, lost no time in spotting that Japanese paradigm shift, jumping into the market underselling comparable Japanese products.
Toyota and Panasonic must have realized that the economy of scale matters far more in business than they previously thought. They had been exploring how to structure the joint venture since 2018. Questions they are asking themselves are how to clear antitrust regulators, what to do about Panasonic’s manufacturing plant in China, whether the joint venture should supply to Tesla, and where to locate the joint venture’s mother plant. Panasonic’s China plant currently manufactures lithium-ion batteries for Tesla.
Even with the launch of the new company, it’s unknown whether it can compete with China’s CATL, the world’s largest lithium-ion battery manufacturer. Panasonic is the world’s second largest maker. For the joint venture to succeed, the two companies need to woe other Japanese and possibly foreign automakers to join, such as Honda Motor Co., which depends on the small GS Yuasa Co. for battery supplies and Mitsubishi Motors takes supplies from Lithium Energy Japan, a joint venture of Mitsubishi Corp., GS Yuasa and MMC. Nissan Motor Co. had sold off its battery joint venture with NEC Corp. to China and is getting supplies from China’s CATL. Honda in 2018 signed agreement to jointly develop next-gen batteries with General Motors.

Toshio Aritake
(We welcome comments from readers. Send email to: aritake@biglobe.jp)

Reuters article on Toyota-Panasonic joint venture follows:

TOKYO, Jan 21 (Reuters) – Toyota Motor Corp and Panasonic Corp are set to launch a joint venture next year to produce batteries for electric vehicles (EV) in an effort to compete with Chinese rivals, a source familiar with the matter said.
The joint venture, to be owned 51 percent by Toyota and the rest by Panasonic, could also provide batteries to Toyota’s EV technology partners Mazda Corp and Subaru Corp , the source said on Sunday.
The source declined to be identified because the talks on the joint venture are private.
A joint venture would build on the agreement that the pair announced in late 2017 on joint development of batteries with higher energy density in a prismatic cell arrangement.

A Toyota spokesman said the two companies have been working on the battery partnership announced in 2017 and declined to comment further. Panasonic made the same comment in a statement.
The two companies may announce the joint venture plan as early as this week, according to the source.
The battery joint venture will help Toyota achieve an annual sales target of around 1 million zero-emission battery EVs and fuel-cell vehicles (FCVs) by 2030.
It will also give Panasonic cost and scale advantages in battery production at a time when China’s Contemporary Amperex Technology has grown to be on par with the long-time industry leader on the back of the rapidly growing home market.
Panasonic, the exclusive battery cell supplier for Tesla Inc’s current production models, could also reduce its heavy reliance on the U.S. EV maker whose production delays previously weighed on the Japanese company’s earnings.
Panasonic is set to lose its exclusivity as Tesla plans to source cell production locally at a new auto plant in Shanghai, “most likely from several companies” including Panasonic, Elon Musk, Tesla chief executive, tweeted in November.
The reported joint venture plan boosted shares of Panasonic by as much as 4 percent on Monday, whereas Toyota shares were almost flat.
Under the planned joint venture, Panasonic would shift most of its prismatic battery-related equipment and facilities in Japan and China to the joint venture, while those producing batteries for Tesla will remain under the company, the source said.
Panasonic already makes prismatic batteries for Toyota, whereas for Tesla it makes cylindrical batteries of a type similar to those used in laptops.
It’s not clear yet how Panasonic would supply its prismatic batteries to other automotive clients, which include Honda Motor and Ford Motor. (Reporting by Makiko Yamazaki and Maki Shiraki; Additional reporting by Takashi Umekawa; Editing by Michael Perry and Muralikumar Anantharaman)

–From the recent East Asian Forum

Many in the United States are deeply worried that US President Donald Trump is actively undermining and trying to tear down the institutions on which the health of the American democracy and society depends. His administration is also doing the same to international institutions for which he has shown at best indifference but mostly contempt.

The US security alliances that have underpinned global peace and stability are also under threat. Trump has fanned uncertainty and anxiety around the world by questioning the value of the US alliances with Japan and South Korea as well as the entirety of NATO.

After World War II, the global community was able to take for granted a United States that aspired to values of freedom, democracy and openness, even if those values were imperfectly observed. The US withdrawal from the UN Human Rights Council and its separation of refugee children from their parents has put an end to US moral leadership for now. And it’s difficult to regain moral authority quickly once lost.

But what Mr Trump is doing to the international trading system is likely to be the most damaging. In its second year in power the Trump administration has found its feet in implementing protectionist measures and firing up a trade war. Not only has it imposed catch-all steel and aluminium tariffs and imposed tariffs on US$34 billion worth of Chinese imports (all outside the WTO trade rules), the US Trade Representative is vetoing the appointment of new WTO Appellate Body judges and the administration has tariffs pending on a further US$200 billion of Chinese imports.

US leadership of the multilateral order has been the guiding light for over 70 years. That leadership can no longer be counted upon. Indeed, the rest of the world is going to have to work together to preserve that order in the face of its biggest challenge — from the United States itself.

Allies of the United States, as well as the rest of the global community, are grappling with how much to separate its dealings with Mr Trump from its dealings with the United States itself. The delusions that Trump is a blip and the United States will resume course quickly after he leaves office have been dispelled for most. How long after Trump will it take to rebuild the global institutions that Trump has been trying to tear down? How long will it take to rebuild the trust in those institutions? The fish rots from the head, and the longer Mr Trump is in office, the more time it will take to rebuild the role of the United States as the world has known it for the best part of three-quarters of a century.

The priority now is to protect the international institutions from the United States and keep the multilateral system open to the eventual re-participation of the United States.

As Shiro Armstrong writes in this week’s feature essay, ‘the threat to the global trading system will only be met by a concerted response by other stakeholders in the global trade regime. Such a response needs coordination and strategic action that doubles down on the rules-based global system’.

Managing the rise of China was going to be difficult for the United States and the global system — no matter who was in the White House. China’s economy is already larger than that of the United States in purchasing power parity terms and China is already the world’s largest trading nation and the largest trading partner for most countries around the world.

The United Kingdom worked hard to shape the Bretton Woods institutions in the aftermath of World War II to protect its interests in the face of the rising power, the United States.

The established rules have served us well but there are obvious gaps and weaknesses. A rational United States would be trying to fill those gaps and to expand and strengthen the rules in the face of a rising China. Instead it is trying to tear the rules down.

Much of the US policy establishment is swinging behind President Trump in justifying its attack on China, and for some, the WTO. Very few agreed with imposing tariffs on allies but many have excused them on China. Letting China into the WTO is now portrayed as a mistake in Washington, although China’s economy has changed profoundly through its acceptance of market norms and the rules of international trade. Its society and polity have also undergone remarkable change, though in the eyes of some, it is still not enough ‘like us’.

The ‘China shock’, as it has become known in the United States, and the rapid expansion of its trade (which displaced more US workers than expected and for longer than was predicted) helped mobilise popular support for Trump’s protectionist policies. The aggregate effect of opening trade with China on the United States was overwhelmingly positive but the benefits have not been shared across US society.

The China shock has been more beneficial for other countries that have been able to share the benefits more widely across societies through a mix of higher growth, better income distribution and stronger social safety nets. Those generational issues will need to be addressed to sustain policies of openness in the US economy in the future, or else the current surge of American growth is likely to be a temporary affair.

Technology transfer to China is also seen as illegal and unfair despite most of its being delivered by the voluntary commercial decisions of US companies. The multilateral intellectual property regime may well be inadequate for the United States and other advanced economies. The United States had made headway in its negotiations with China on a bilateral investment treaty to address these issues with China before Trump killed that off. The United States will not be able to impose its own new rules on China since China is already too large. There is a movement to form a bloc of advanced economies in the WTO to address this, but such a bloc would risk fracturing the multilateral system into an emerging market versus advanced economy world.

Rules that deal with issues beyond those currently encompassed within the WTO and other frameworks will have to be created with China. The EU and China have initiated reform of intellectual property rules in the WTO: this is a welcome initiative. Japan and Australia are in a difficult position, being allies of the United States. But the priority has to be the multilateral economic system. This system is of paramount importance to prosperity and security in the Asia Pacific region. Threatened with US tariffs on automobile exports, as Japan is, it cannot afford to yield to bilateral dealing with the United States. ‘Some countries, including Australia, have received exemptions from the US steel and aluminium tariffs’ according to Armstrong, and ‘by accepting those exemptions, they have failed their obligations to the rules-based order’. But like Japan, Australia cannot ultimately put political favours to Washington over its primary security and economic interests in the multilateral trading system.

International institutions and forums are fast turning into a ‘minus-US’ world. The G20, APEC, the G7 and now the WTO are all ‘minus-one’ groupings with the United States standing against multilateral principles, alone. But the leaders in the rest of those groupings need to do more than put Trump in the naughty corner. They will need to move forward with collective leadership on an institutional reform and opening agenda, that, while open to United States engagement, no longer takes its cue from Washington.

Other recent articles in which you may be interested from the East Asia Forum are listed below. You can click the title of each one or visit www.eastasiaforum.org for daily content.

Editors
East Asia Forum
20 August 2018

TOKYO—The year 2019 marks the 20th year since the Japanese central bank adopted its zero interest rate monetary policy. The bank is coming under growing pressure of exiting the policy to eventually return to normal rate environment, calls that are understandable given growing pains experienced by all stakeholders concerned, most notably depositors and lenders.
The next two years is going to be the last window of opportunity for the Bank of Japan to take action, namely selling its huge ETF holdings acquired over the past 9 years to bolster the Japanese stock market.
Inaction by the fall of 2020, when the Tokyo Olympic games ended and its economic stimulation begins to phase out, would be painful to say the least. The yen might lose its value against the U.S. dollar and even the euro (if it’s still around in the current structure); even large Japanese banks would be forced to take more overt action than they are taking now, such as closing branches and cutting manpower, and smaller banks may declare insolvency; and pension funds would be forced to reduce payments to recipients.
The BOJ is continuing to purchase publicly-listed Japanese ETFs. Its ETF holding as of Jan. 15, 2019 stood at 23.7 trillion yen ($219 billion), or about 4 percent of TSE aggregate market capitalization. In 2018, the BOJ purchased 6 trillion yen worth of ETFs, a record amount since the central bank began the extraordinary – many called it ‘unethical’ – operations in 2010.
The BOJ ETF balance sheet currently looks reasonably healthy, not surprising given that it began purchases when the Nikkei stock average was much lower than now. The caveat is that if it sells its ETF holdings in lump, the market could dive sharply and the BOJ ETF portfolio also could take a cold bath.
But the BOJ must begin unloading its ETFs over the next two years or sooner as a phase to restore the normal interest rate environment, which for Japan is 2.5-3.0 short-term rates for the bank’s monetary policy maneuvering room, like the Federal Reserve ideally needs to keep the Fed funds rate around 5.0 percent. Normalization also is vital for commercial banks to regain the traditional lending spread – the cost of borrowing and lending – at 300 basis points or so.
The BOJ’s failure to act promptly would threaten the viability of regional Japanese banks, especially those that were founded after World War II and thus their lending base is not as strong as older banks. Already, some of them are merging and downsizing to reduce costs.

–Toshio Aritake

(Please email comments to: aritake@biglobe.jp )

TOKYO, Jan. 6, 2019 – How many people need to be sacrificed before the Japanese public realizes that their bureaucracy that originates in the samurai class are the culprit of the country’s downfall from from a technology and economic empire to an also-run of the global marketplace. In contrast to the samurai image as the honorable guards of the Shogun and civilians, the  bureaucrats’ top priority over centuries has shifted into mundane man creature pursuits – fame, promotion and money – at the expense of the private sector. The samurai bureaucrats would test the sharpness of their new swords by severing the torsos of innocent homeless people; beheaded or sent to remote islands hundreds of honest, starving peasants of famine-stricken regions who pleaded for tax relief; dispatched tens of thousands of soldiers without giving them ammunition and food to Southeast Asia to fight against western forces, forcing most of them to die of starvation and others by enemy bullets. Over recent decades, their power had weakened with the ascendance of private-sector wealth as well as a result of the bursting of the bubble economy in the early 1990s, which the public blamed as the cause of the stock market crash and high  employment But now, they are  regaining power and authority with the help of Shinzo Abe, the prime minister whose grandfather he adores was a bureaucrat-turned prime minister who was instrumental to Japan’s brief colonization of parts of China in the 1940s.

On Oct. 11, 1667, about 60 years after the 250-year-long Edo period began, San-emon Horikoshi, the head peasant of the Midori farming region of Kozu Counrtry (now Takasaki City, Gunma Prefecture) was bound tightly onto the cross and executed at the neighboring Ogushi Matsubara execution place. Horikoshi’s family members, except his eldest son, also were caught and beheaded. Earlier the same year, the 37-year-old San-emon pleaded to the region’s domain lord Takumi Kurahashi’s magistrate office for tax relief because of draught-stricken poor harvest . But he was not only refused his plea but also was ordered to pay even higher taxes. Angry, he bade farewell to his wife and children and walked all the way to Edo (now Tokyo), his plea letter hidden deep inside his straw hat, and with trickery managed to hand the letter directly to the Shogunate office. Enraged by the head peasant’s action, Kurahashi ordered San-emon be arrested for making a direct plea to the Shogunate, a crime subject to capital punishment. Emboldened by San-emon’s act, Ichiemon Miki, the head of Kokuryu village not far from Midori village attempted an aborted direct plea to the Shogunate in 1668 and he too was caught and banned from living in the country for eight years. The shogunate could not ignore the two courageous farmers’ deeds and in 1673, the government relieved Kurahashi of his post and ordered the transfer to a smaller country.

The two episodes were not isolated developments during the Edo period, when the entire country was hit by recurring famines every several years. By historians’ counts, there were as many as 3,000 direct plea cases, in most of them, the leaders and their families were executed either on the cross or by beheading with the sword. Perhaps the most famous case was the 47 Samurai episode, though it was an appeal by a lower-ranked samurai domain lord to a higher-ranked one. On April 21, 1701, the Takumi Asano drew a dagger and injured Kozukenosuke Kira in the Edo Castle, a serious offense, and Asano was ordered to cut up his stomach and die, which he did immediately. The Shogunate considered the situation 24 hours for several days after Asano committed stomach-cutting death the same day. The government had to decide what to do about Asano’s domain and his samurai, and top officials who were bureaucrats – while not really consulting the shogun – agreed that the domain be disbanded and banning its samurai to serve the Asano clan. Next year’s December, the 47 samurai broke into Kira’s house in downtown Tokyo and beheaded him in revenge. The shogun government ordered all the 47 samurai commit seppuku, or disemboweling. The stern punishment was needed not only to maintain the samurai class order but also of farmers and merchants to demonstrate the shogunate’s authority over the entire country.

On October 14, 1686, Kasuke Tada, the peasant head, Zenbei Oana and Kasuke’s 16-year-old daughter Shun and seven others gathered around Matsumoto Castle and asked the magistrate office of domain lord Tadanao Mizuno, who was absent in Edo, to lower taxes. As they were supported by tens of hundreds of boisterous peasants, the magistrate office’s deputies agreed to accept the demand and handed a letter to the extent (sort of MOU) on Oct. 19. But the deputies wrote a letter to Mizuno that they would arrest the mutiny leaders and execute them. That they did: Eight of them, including Kasuke and Shun, were executed on the cross and 20 others were beheaded and their bodies cut into pieces.

Over the past few decades, the Japanese bureaucracy has been keeping a relatively low to modest profile, which partially may be traced to the bursting of the bubble economy in the early 1900s but more probably to bureaucrats’ incompetence to keep up with global trends and information technology revolution. Japanese bureaucrats continued to think themselves as the brightest class of the country but feigned humbleness not being sure how the country and world would transpire. As they were doing soul-searching, Shinzo Abe, who became to the prime minister in December 2012, emerged as the facilitator and guardian of the bureaucracy. Abe and his wife Akie were implicated in a couple of shady transactions over the opening of schools, one for a Shinto religion grade school and the other for a university veterinarian department of a separate school business group. Abe strongly denied his involvement and clearly told Ministry of Finance and other ministry bureaucrats to stonewall questions in parliament in 2017. The experience worked almost as a god-sent for them to field tough questions, and the mutual trust between the prime minister and the bureaucracy seems to have deepened, especially after Abe’s once close supporter/friend Yasunori Kagoike was arrested and dumped like a piece of trash.

Obviously, Abe and his deputy. Chief cabinet secretary Yshihide Suga are not the only officials that are engineering the bureaucracy transformation. Hiroto Izumi, who comes from the Ministry of Land, Infrastructure and Transport, is Abe’s head aide, and the second in command is Eiichi Hasegawa, from the Ministry of Economy, Trade and Industry. They are the ones that are making the bureaucracy at large feel comfortable about being bold in words and deeds. Over the past several years, they executed government administrative policies that give more work to bureaucrats while ignoring public outcries – tens of billions of dollars for building the wall – the seawalls along the northern Pacific coast of Japan against future tsunami and restart of nuclear power plants, both of them citizens say are unnecessary.

Toshio Aritake

TOKYO, Japan—After winning a public mandate in the past two general elections, Japanese prime minister Shinzo Abe has become more forthcoming in lambasting the media, not only committing the ‘verbal’ but, going beyond, direct intervention, clearly encouraged by Donald Trump’s and China’s Xi Jinping’s media attacks.

On Nov. 13, NHK, the country’s national broadcasting station during a 12:00 noon news program, live-broadcast the joint news conference of Abe and Mike Pence, in which the U.S. vice president’s comments in part was translated by a simultaneous interpreter broadcast by NHK as ‘FTA (free trade agreement).’

In a news program aired after 1:00 p.m., however, NHK moved a correction that what the interpreter translated ‘a bilateral trade agreement’ as FTA was an error and that it should have been
‘a bilateral trade agreement (minus ‘free’). NHK in later news programs then emphasized Pence’s reference to the proposed agreement as ‘TAG (trade agreement in goods)’ that Pence agreed with Abe to start negotiating next year. NHK also said in the news shows that Pence and Abe affirmed that while the two countries are negotiating a trade agreement, the United States won’t raise tariffs on Japanese autos.

Deputy cabinet secretary Yasutoshi Nishimura raised the interpreter’s translation error after the Pence-Abe joint news conference that Pence did not use the word FTA, which some Japanese media said was an affirmation of his direct intervention to NHK to change the language.

On his arrival in Japan Nov. 12, Pence tweeted that in his one-on-one with Abe, he would hold negotiations for a free-trade agreement. During Oct. 29 House of Representatives plenary session, Abe said he did not expect a trade accord with the United States would embrace broadly to include services and goods and other areas. But during joint presser with Abe, Pence said an agreement with Japan would include services.

What this semantics difference shows is that the Abe cabinet, which to the public may look like a team of competent politicians, on the contrary depends closely to the Japanese bureaucracy. Top of the five seats of prime minister’s special advisor is a Ministry of Land, Infrastructure and Transport official. Nishimura, who reports to cabinet secretary Yoshihide Suga, comes from the Ministry of Economy, Trade and Industry.

Japanese media said it was Abe who concocted the word TAG. He had plotted to impress Japanese voters that he had devised a new trade regime that won’t force Japan to yield to U.S. pressure, yet benefits the two countries. ‘TAG is meant to blindfold the Japanese public from reality,’ one report said.

–Toshio Aritake