Japan's Political and Economic Landscape: Key Developments from January 2025

Tue 14th Jan, 2025

On January 4, 2025, individuals dressed in traditional attire participated in 'kemari,' an ancient Japanese football game played by aristocrats during the Heian period, at the Shimogamo Shrine in Kyoto.

The following outlines significant news updates from Japan:

Japan's Ruling Party Calls for Seafood Import Ban Lift

A prominent lawmaker from Japan's ruling party has urged China to reconsider its comprehensive ban on Japanese seafood imports. This appeal coincides with a dialogue session between the ruling parties of both nations, marking the first such interaction since October 2018. Hiroshi Moriyama, who serves as the secretary general of the Liberal Democratic Party, emphasized the need for 'concrete results' to mend bilateral relations, which have been strained by various issues including the ban resulting from the release of treated radioactive wastewater from the Fukushima Daiichi nuclear power plant.

Corporate Bankruptcies in Japan Surpass 10,000

According to a recent survey by a credit research firm, corporate bankruptcies in Japan exceeded 10,000 in 2024, a notable increase not seen in over a decade. The surge is attributed to an ongoing labor shortage and the rising costs of imported goods, exacerbated by the depreciation of the yen. Small and medium-sized enterprises have been particularly affected, facing additional financial strain with the expiration of special tax deferral measures that were previously implemented during the COVID-19 pandemic.

North Korea Conducts Missile Launches

On Tuesday, North Korea launched several short-range ballistic missiles into the Sea of Japan, as reported by South Korea's military. This marks the second missile launch event of the year, with the missiles reportedly fired from the Ganggye area in North Korea's Jagang province, traveling approximately 250 kilometers before landing in the sea.

Nippon Steel Responds to U.S. Steel Acquisition Interest

Nippon Steel Corporation has asserted its position as the 'sole partner' for United States Steel Corporation amid rising acquisition interest from Cleveland-Cliffs Inc. In light of the U.S. government's opposition, Nippon Steel reaffirmed its commitment to pursue the acquisition. Cleveland-Cliffs' CEO, Lourenco Goncalves, publicly expressed interest in acquiring U.S. Steel, controversially criticizing Japan's economic practices.

Bank of Japan Considers Interest Rate Hike

Ryozo Himino, Deputy Governor of the Bank of Japan (BOJ), indicated that board members will deliberate over a potential interest rate increase at an upcoming meeting later this month. This announcement comes amid expectations of a policy shift, with discussions scheduled for January 23 and 24 focusing on economic and price outlooks.

Kyoto Plans Lodging Tax Increase

The city council of Kyoto has announced plans to increase the lodging tax for visitors staying in hotels and other accommodations, effective from March 2026. The new tax structure will see rates rise significantly, with a maximum charge set at 10,000 yen (approximately $64) per person per night, a considerable increase from the existing rates which range from 200 yen to 1,000 yen.

Japan's Diet Session to Commence

Japan's parliament is set to convene for a 150-day regular session starting January 24, as confirmed by the government's chief spokesperson. Prime Minister Shigeru Ishiba aims to garner support from opposition parties during the deliberations, leading up to a crucial upper house election expected around July 20.

Notable Literary Figure Passes Away

Lee Hoe Sung, a renowned novelist and second-generation Korean resident of Japan, passed away at the age of 89 on January 5 due to aspiration pneumonia. He made history as the first foreign recipient of Japan's prestigious Akutagawa literary award and had a profound influence on the Japanese literary scene.


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