Key Points The economic-security nexus in U.S.-Japan relations is irrational. The TPP should be ratified in the other 11 member countries, and the door left open for U.S. participation. Japan should lead RCEP and Japan-China-South Korea FTA negotiations.   U.S. Vice President Mike Pense will visit Japan to work with Japan’s Deputy Prime Minister Aso Taro on a new Japan-U.S. Economic Dialogue based on consensus reached in the Japan-U.S. summit meeting.   In the 1980s, at the time of severe economic frictions between the U.S. and Japan under President Reagan’s Republican administration, I conducted negotiations with the U.S. as a member of Japan’s Foreign Ministry. I would like to examine the implications (of the upcoming negotiations) for Japan’s foreign relations and economy, comparing the situation now with the situation then.   First, the U.S. trade deficit itself has expanded from 50 billion dollars in the early ... ... [Read more]

Key Points The most alarming course of action the U.S. could take is unilateral action. Japan should stress that it is pointless for the U.S. to see its trade balance with Japan as a problem. Japan should constantly push for liberalization negotiations to maintain the trading system. A Japan-U.S. Economic Dialogue, led by U.S. Vice President Mike Pense and Japan’s Deputy Prime Minister Aso Taro, is scheduled to be held in Tokyo on April 18. Since this is the first meeting in this new dialogue, there may be no in-depth discussion on individual problems. However, given that the Trump administration continues to make remarks about protectionism, it will be interesting to see how discussions on the yen-dollar exchange rate and commerce-related problems unfold.     On March 31, 2017, President Trump signed a Presidential Executive Order aimed at reducing the U.S. trade deficit. The U.S. ... ... [Read more]

It is important to take a long-term perspective instead of merely accepting foreigners to compensate for the shortage of human resources. How should foreigners be accepted to sustain the declining population? In addition, even if the doors are open, excellent foreigners might not come. It is important to create an attractive environment.   Recently, we often see that many foreigners are working in the manufacturing, service and retail industries. According to the registrations for the employment of foreigners by the Ministry of Health, Labour and Welfare, there were 1.08 million foreign workers at the end of October 2016, exceeding one million for the first time. In addition, according to the statistics on foreign residents in Japan published by the Ministry of Justice at the end of December 2016, there were 2.38 million foreign residents in Japan, showing a tendency to increase. Expectations for foreign ... ... [Read more]

Flying smoothly, the HondaJet manufactured by Honda Aircraft Company, a US subsidiary of Honda, is putting the dreams of Honda Soichiro (1906–1991), the founder of Honda, into the air. Mass production began after obtaining type certification for safety from the Federal Aviation Administration (FAA) in December 2015. Orders for in excess of one hundred aircraft have already been logged with forty-three units delivered worldwide in 2017, overtaking the Citation M2, the principal aircraft made by Cessna, to become the international top-seller in the small jet category (weighing less than 5.7 tons). Orders remain steady at the start of 2018 and the speed of production continues to accelerate. The aircraft is popular for its unprecedented and unique design, which features an over-the-wing engine mount that reduces air resistance and increases fuel efficiency by as much as twenty percent compared to the competition. It is also ... ... [Read more]

The fourth boom is currently sweeping across the animation industry. The market for animation is finally approaching 2 trillion yen. Money is flowing in from overseas. Meanwhile, people at production job sites are suffering from cheap labor costs. Similar structural problems face the industry. Weekly Toyo Keizai investigates the economic bloc for animation, entering a new dimension. “Have you seen either?” There must be many people who have had a conversation like this at work or home since last year. Two animated movies, Kiminona-wa (Your Name), released in August 2016, and Kono sekai-no katasumi-ni (In This Corner of the World), released in November of the same year, triggered a social phenomenon that caused a broad range of ages to visit movie theaters. The former achieved the second largest box-office proceeds for an animated movie in Japan after Sen-to Chihiro-no kamikakushi (Spirited Away), directed by ... ... [Read more]

< Keypoints > Birthrates and average life expectancy in Asia now on a par with developed countries Estimates suggest that consumption tax needs to rise by 8% or more in Thailand Policies providing subsidy on child-rearing such as child allowances is not recommended. Policies providing subsidy on children’s educational cost, which can sustain the long-term development, should be the priority in developing countries. Population aging has become a global concern. With a rapidly increasing proportion of old people in the population, governments are forced to increase expenditure on social security, thus causing pressure on public finances. The shrinking of working-age population indicates less labor force and fewer taxpayers to share the fiscal burden.  Add to that the low birthrate,  which has been lower than the replacement rate required to maintain the size of the population as it is now in developed countries, further increases ... ... [Read more]

  Key Points Criticism of East Asia’s unsuccessful development model misses the point. Economic growth requires robust initiatives in both the private and public sectors. Leapfrogging may be possible for latecomer countries in the field of information technology. The Asian financial crisis started in July 1997, wreaking havoc on economies in the region throughout the following year. It had a devastating impact on countries like Thailand, South Korea and Indonesia, which had previously enjoyed strong economic growth, causing significant currency devaluation and a collapse in domestic demand. The debacle could be characterized as a new type of crisis caused by the massive short-term capital flows into countries where international capital transactions had become liberalized. What was the impact of the financial turmoil in the Asian region which has had a long history of economic development? Following the crisis, significant social changes occurred in the ... ... [Read more]

Increasing interest is focusing on the Bank of Japan’s exit strategy, or its strategy for ending its ongoing ultra-easy monetary policy. On April 19 [2017], the Liberal Democratic Party Administrative Reform Promotion Headquarters ([formerly] chaired by House of Councilors member Kono Taro) advised the government to study the risks associated with the Bank of Japan’s exit strategy. World central banks in charge of monetary policy are steadily moving to normalize monetary policy. On June 14 [2017], the Board of Governors of the Federal Reserve System in the United States unveiled a new exit strategy. The Fed will gradually reduce reinvestment of bond principal payments on securities holdings acquired in the course of its conduct of monetary policy with a view to reducing its total assets. It will begin reductions within the year if all goes well. Following its Governing Council meeting of June 8 ... ... [Read more]

  ASEAN countries are facing more rapidly declining birthrates and population aging than Japan. At the same time, the widening income gaps are leading to increased social unease, and this situation is aggravated by the digital society. As regional issues shift from the economy to politics and society, how should Japan relate to ASEAN countries?   Depopulation, declining birthrates and population aging are common issues not only for Japan, but for the entire Asian region. The global population will continue to increase this century, whereas Asia, including the Association of Southeast Asian Nations (ASEAN), will see populations decrease by the middle of this century. That is, Asia will become a depopulation region half a century earlier than the rest of the world. This is because declining birthrates have been progressing throughout Asia. The total fertility rate (equal to the number of children that women ... ... [Read more]

Although a gasoline-fueled car is usually said to contain approximately 30,000 parts and components, a closer look reveals that depending on the way of counting, it can be as large as 100,000 with some 10,000 parts used to make just an engine. In the case of an electric vehicle (EV), which runs on a battery-powered motor instead of a fuel-powered engine, there is no need for fuel system parts such as a fuel tank, ignition system components such as a spark plug, exhaustion and emission control system parts such as a muffler, air intake system parts such as a throttle, lubrication system parts such as a fuel pump, cooling system components such as a radiator, and transmission system components such as an automatic transmission (AT) (according to the EVsmart Blog). As such, the number of parts and components used to make an EV is ... ... [Read more]