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]

In an era when free trade is under threat, how can we uphold the principles of free trade and ensure economic security? Suzuki Kazuto unravels the dilemma between the two. The “weaponization” of the economy and the rise of economic security Free trade is in crisis. The Trump administration’s tariff policy aims to rebuild trade by placing “fairness and balance” above economic efficiency. For the United States, this means that a growing trade deficit through free trade is “unfair,” and rebalancing is important. Therefore, the US uses tariffs to reduce imports from other countries. If imports are required, the revenue generated from tariffs can be used to recover lost wealth. Whether this policy will produce the results President Trump claims and what impact it will have on the American economy is impossible to predict. Nevertheless, it is clear that this tariff policy is endangering ... ... [Read more]

Supply chain management to prepare for geopolitical incidents requires strategic thinking, where predicting the reaction of geopolitical competitors is essential to designing effective countermeasures. Deterrence is the key for promoting supply chain resilience Friend-shoring is a double-edged sword Risk can be alleviated by trust-building through inter-firm networks across national borders With looming uncertainty in the global business environment, the pursuit of economic efficiency is increasingly associated with supply chain vulnerabilities. “Resilience” became a keyword in supply chain management and now forms the core aspect of economic security. Supply chain vulnerabilities are attributed either to (1) physical risks, (2) cyber risks, or (3) geopolitical risks.[1] Physical risks include those of natural hazards, climate change, and pandemics. Cyber risks are represented by malicious attacks on critical infrastructure or theft/leakage of confidential data, while nowadays the disinformation maneuver using generative AI is gathering sharp attention. Geopolitical risks ... ... [Read more]