Is the current overheating of the Japanese economy a temporary enthusiasm, or is it a manifestation of structural change? Voice spoke with Professor Itoh Motoshige about the course of the Japanese economy in an era of exiting deflation and navigating the AI revolution. An “Exit Bonus” Supporting the Japanese Economy There is no doubt that the Japanese economy, and indeed the global economy, is currently reaching a major turning point. In Japan, an era of deflation continued for more than two decades starting from the early part of this century. While there were various underlying factors behind deflation, as a result, companies became extremely reluctant to invest, wages failed to rise, and consumer spending stagnated accordingly. Since the COVID-19 pandemic, however, that situation has been changing significantly. The Japanese economy has gradually transitioned from a deflationary environment to an inflationary one. Rather than being ... ... [Read more]

The Asia Zero Emission Community (AZEC) serves as a framework for cooperation among environmentally like-minded Asian nations. The key to the success of this framework lies in designing highly transparent institutional systems and fostering the trust required to mobilize private investment. AZEC should simultaneously pursue decarbonization, economic growth, and energy security. The ties that bind AZEC stem from a bundle of policy implementations, including infrastructure, institutional frameworks, finance, and human resource development. What is required of Japan is to engage with Asian AZEC members through “non-forcing” collaboration—offering inclusive partnerships without demanding binary choices. The global order is moving around two distinct forms of “autonomy.” The first is the effort by advanced democracies—such as European nations and Canada—to reinforce their own foundations in security, industry, technology, and finance, even while still requiring US power. The second is the movement among Global South countries to avoid ... ... [Read more]

China has released a trade restriction list explicitly naming Japanese companies, schools, and other entities. How should we interpret the meaning of this rule “change” by China, and how should Japan respond? Professor Watanabe Mariko provides her analysis. Moving from economic coercion as a message toward legal regulation China has been establishing its system of security exceptions since 2020 The playing field is shifting to legal systems, which conversely will weaken the basis for economic coercion On February 24, 2026, China placed twenty Japanese companies, institutions, and organizations—including the National Defense Academy of Japan and several research institutes—on the Entity List (trade restriction list) established under its Export Control Law. In addition, China placed a further twenty Japanese companies and universities on a “watch list,” an instrument it applied for the first time. It is dangerous to view this as “merely a measure targeting ... ... [Read more]

China’s dominance in rare earth element (REE) production stems from low mining and refining costs and vertical integration across the industry. Securing a stable supply of REEs requires international cooperation grounded in a long-term strategy. REEs are essential to improving both technical and environmental performance The key indicator is not the size of mineral reserves but the cost of industrial use Japan must contribute to building a stable international supply chain In February 2026, speaking at an outdoor campaign rally in Okayama Prefecture, Prime Minister Takaichi Sanae was reported to have made a statement to the effect that Japan had successfully recovered rare-earth-rich mud from the seabed at a depth of 6,000 meters off Minamitorishima Island, and that Japan would therefore face no shortage of rare earth elements (REEs) for either the current generation or the next. However, this recovery forms part of a ... ... [Read more]

Against the backdrop of the US-China confrontation, coalitions in support of free trade are becoming increasingly active around the world. Kumagai Satoru reexamines the logic of emerging economies and the approach of the United States, which uses “Trump tariffs” to rein in these countries. US-China confrontation presents trade expansion opportunities for many emerging countries. China is attempting to deepen relations with the West and emerging countries using “market opening” as its weapon. Japan should place greater weight on the future potential and strategic value of ASEAN. In recent years, countries known as the “Global South” have been increasing their presence in the international community. Behind this shift lie factors such as the US-China confrontation that has continued since 2018 and Russia’s invasion of Ukraine in February 2022. Amid this shift, the dynamics of the international order are changing significantly. On April 2, 2025, US ... ... [Read more]

Is a Consumption Tax Cut Necessary? In her policy speech to the Diet (February 20, 2026), Prime Minister Takaichi Sanae announced that, in order to alleviate the burden on middle- and low-income households “struggling with tax and social insurance burdens as well as rising prices,” the government will proceed with discussions within a bipartisan “National Council on Social Security” (hereinafter “National Council”) regarding “comprehensive reforms of social security and taxation systems, including designing a system for refundable tax credits.” At the same time, she stated that as a transitional measure until the implementation of a refundable tax credit system, the reduced tax rate on food and beverages would be set to zero. The resulting revenue loss, which amounts to over 5 trillion yen annually, will be managed “without relying on deficit-financing bonds,” and the tax cut period will be implemented “for a limited duration ... ... [Read more]

The economic phase is shifting both domestically and internationally. “Sanaenomics” is an economic policy package designed to respond to this shift with rationality and coherence. Professor Iida Yasuyuki unpacks its full scope and grand design. Structured Policies Judging from patterns of support in the Liberal Democratic Party (LDP) presidential election and the lineup of economic policy brains, many commentators view the economic policies of the Takaichi Sanae administration as a continuation and intensification of Abenomics. On the other hand, the policy documents issued since the administration’s inauguration, as well as the policy agreement with the Japan Innovation Party (JIP), reveal an ambitious policy vision that, while inheriting the achievements of Abenomics, seeks to transcend it. This divergence reflects the demands of economic reality. The two administrations confronted fundamentally different economic circumstances. When the second Abe Shinzo administration was formed in 2012, the Japanese economy was suffering from deficient demand. As the Consumer Price ... ... [Read more]

  Does the deregulation of working hours contradict measures against the declining birthrate? The flexibility in working hours promoted by the Takaichi administration holds the potential to maximize both the “earning power” and the “time discretion” of child-rearing households. Professor Oguro Kazumasa shines a new light on this controversial policy from the perspective of demographic challenges. The Current Political Debate Over Working Hour Deregulation Since Prime Minister Takaichi Sanae mentioned a “review of the upper limits on working hours,” an intense debate has continued in the Diet. This is undoubtedly driven by the fact that Japan is transitioning into a full-scale labor-shortage economy, with chronic labor shortages persisting across a wide range of sectors—including services, healthcare/nursing care, construction, and logistics—amid a rapidly shrinking working-age population. From the corporate side, there are expectations that allowing flexible work styles will lead to accelerated innovation and better ... ... [Read more]

  What is needed to sustain and strengthen the evolving Japanese economy? In this text, the author—a private-sector member of the Council on Economic and Fiscal Policy—discusses the economic policies and challenges that the Takaichi administration should pursue in its quest for a “free economy” and a “strong nation.”   On October 21, 2025, Takaichi Sanae took office as Japan’s 104th prime minister. While she is notable for being Japan’s first female prime minister, she is also remarkable in other ways. She is not from a political dynasty; she graduated from a public high school and paid her own tuition to attend a national university. She is not a career bureaucrat from ministries or agencies. Within the Liberal Democratic Party, she belongs to no faction yet has become the foremost policy expert in the political arena. It is precisely Prime Minister Takaichi’s capabilities that ... ... [Read more]

“I haven’t thought about it specifically yet, but after working hard until I’m in my 60s, I’d like to retire completely and be free at the appropriate time. I’d like to spend my retirement years comfortably, focusing on the things I enjoy, such as following pop idols/ entertainment interests and hobbies, while also taking care of my health.” For young people, this is likely the retirement future most people hope for. But is this future really possible? Saving money is essential to achieving a comfortable life. The Public Opinion Survey on Household Financial Behavior (Central Council for Financial Services Information [now Japan Financial Literacy and Education Corporation [J-FLEC]]) looked at the financial assets of households with two or more people in their 40s. The survey found that, in 2003, over 60% of the households had assets exceeding 5 million yen. By 2023, however, this ... ... [Read more]