In this edition of TPR News: More constitutional reform, Abe is up in the opinion polls, the LDP is both up and down, the Justice Ministry enters the fray over the foreign trainee-worker program, GDP growth slows, interest rates remain unchanged, Japan is the most innovative country in the world and Japanese women have the world’s greatest longevity with which to enjoy it, those same ladies might have more violence to fear, a bit on whaling, and baseball comes to Japan.

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Politics

The Maritime Self-Defense Force First Service School in Etajima in western Japan was raided by state and naval police forces, on suspicion that sensitive information concerning warships had been leaked. The compromised data relates to US-developed Aegis radar technology which is used jointly on several advanced Japanese destroyers. The information leak was first discovered in March, when police found the information on a computer at the home of a 33 year old MSDF petty officer in Kanagawa who was not authorized to possess the information. At that time, police were investigating the immigration status of the petty officer’s wife, who is Chinese. Japan’s Ministry of Defense refused to comment on the matter.

Prime Minister Abe met with his 13-member defense advisory panel,12 of whose members have made public statements in line with the Prime Minister’s wishes, for the first time on Friday. Abe told the panel he wanted to see big changes to Japan’s defense policy, including a reexamination of the constitutional interpretation barring collective defense. Citing the threatening posture of North Korea, the rise in international terrorism, and a need to work more closely with the US, he asked the panel to examine four specific situations, including the oft-cited collective defense scenarios of a North Korean missile being launched at the US or US Naval vessels coming under attack while operating alongside the MSDF, as well as providing logistical support to nations involved in peacekeeping activities, as the ASDF has been dong in Iraq for over five years, and, perhaps most controversially, protecting and responding to attacks against foreign forces working alongside the SDF on peacekeping missions.

Despite the high profile of Abe’s push for constitutional reform and poll numbers that suggest public opinion is not in line with his wishes, his LDP still leads the main opposition party, the DPJ, in voter polls about the July Upper House elections, with 28% of respondents saying they plan to vote for LDP candidates as opposed to 21% expressing support for the DPJ, according to a poll by the Asahi Shimbun. New Komeito, the Japanese Communist Party, and the Social Democratic Party garnered 4%, 3%, and 2%, respectively.

44% of respondents said they hoped for a combined opposition majority in the House of Councillors, whereas only 32% said they hoped the current LDP-New Komeito ruling coalition would maintain its majority.

The majority of respondents, though, 60%, said they remained undecided.

While women expressed a more marked preference for the LDP, Abe’s Cabinet is enjoying increasing approval ratings and declining disapproval ratings due to an upsurge in support among men, making the most recent Asahi poll the first in which the Abe kantei was more popular with men than women. Only among voters in their thirties is the disapproval rate still higher than the approval rate.

When Japan’s G-8 delegation goes to Heiligendamm, Germany next month for the annual G-8 summit, it plans to propose a set of safety guidelines for nuclear power plants to reduce the risk of material from power plants being turned to military uses and to allow for the expanded use of nuclear power as a way of reduce greenhouse gas emissionsby half by 2050. The expanded use of nuclear power would also help Japanese contractors who would likely have a hand in the construction and design of new plants in the region.

Japan hopes to reach a consensus that would allow an agreement on a post-Kyoto Protocol framework to be reached at next year’s G-8 summit, to be hosted by Japan at a scenic mountaintop resort in Toyako, Hokkaido from July 7 - 9, 2008.

Justice Minister Jinen Nagase surprised his counterparts at the Ministry of Health, Labor, and Welfare and the Ministry of Economy, Trade and Industry in the ongoing debate over what to do with the flawed foreign trainee-worker program. Industry wants to help small businesses get the workers they need and has butted heads with Labor, which wants to curb widespread abuses under the program, in which foreign workers are admitted for a year of apprenticeship, followed by two years of work, but are often used as low-cost labor and have sometimes been subjected to conditions akin to indentured servitude, including being the victims of assault, theft, or other crimes at the hands of their employers.

Nagase proposed doing away with the program, which currently does not offer foreign workers protections such as minimum wage, and allowing a limited number of unskilled workers to enter Japan for up to three years, obliging them to leave at the end of that term.

Currently, some workers are allowed to move on to internships, and thus extend their stays, after completing their training programs. MHLW wants to offer such extensions only to workers at major firms and wants to do away with the year of aprenticeship, turning the program into two years of internship from the start, and offering foreign workers stricter protections, whereas METI wants to offer all workers the chance to move into internships and also wants to tighten regulations.

For more on this issue, listen to last week’s Seijigiri #24.

Are you already thinking about the upcoming July Upper House elections? If so, MTC at the Shisaku blog has recently published a piece entitled “Elections Outlook - A first crack,” which points out how the DPJ’s strategy to bring in rural voters under party president Ichiro Ozawa might play out. We’ve recently added this site to our list of links and recommend that you check it out…

Business and Economy

On Thursday, the Cabinet Office announced that Japan’s GDP had grown at an annualized rate of 2.4% in the first quarter of 2007. In the fourth quarter of 2006, Japan’s GDP grew at an annualized rate of 5.5%. Many news outlets reported the slowdown in GDP growth as a surprise, but most projections had varied from 2.2 to 2.7%. According to the Cabinet Office, Japan’s exporters have cut back on capital spending amid looming fears of a slowdown in the US economy. First quarter GDP growth was led by overseas and private-sector demand.

At the conclusion of the Bank of Japan’s May policy meeting on Thursday, the nine members of the its policy board voted unanimously to leave interest rates unchanged for the third consecutive month. “The Bank’s Monthly Report of Recent Economic and Financial Developments for May 2007” stated, “Japan’s economy is expanding moderately…Japan’s economy is expected to continue expanding moderately.”

The Bank of Japan Governor continued to assert that Japan’s interest rates are unusually low, and that they will have to be raised in the future, though Fukui is bent on keeping market watchers guessing by not giving any idea when that rise might come. At a news conference on Thursday, Fukui told reporters:

Looking ahead, interest rate hikes will be needed to achieve sustainable economic growth with price stability. But we have no pre-timed schedule on future rate hikes. We will gradually raise rates while closely watching for possible risks, and whether the economy and prices move as we expect.

Fukui has hinted that the BOJ might raise interest rates despite the lack of an increase in the Consumer Price Index, an opinion that is not agreed upon by all members of the current Cabinet. Speaking to reporters at a press conference after a Cabinet meeting on Friday, Minister of State for Economic and Fiscal Policy Hiroko Ota expressed disagreement with Mr Fukui’s stance, saying, “The viewpoint of remaining focused on raising interest rates at any cost, even amidst falling consumer prices, is a huge mistake.”

Also on Thursday, at a meeting of the Council on Economic and Fiscal Policy, Chief Cabinet Secretary Yasuhisa Shiozaki called for the Ministry of Finance to follow China’s lead and be more aggressive in its management of foreign reserve funds. Shiozaki urged Finance Minister Koji Omi to think about ways to increase revenue generated from the management of those funds. The Ministry of Finance is generally reluctant to bring any element of risk into the management of Japan’s approximately $915.62 billion in foreign reserves.

In a study released last week, the Economist Intelligence Unit declared Japan to be the most innovative country in the world, followed by Switzerland and the United States.

Japan was credited as having an “innovate-or-die” approach that helped it reach the top of the list, despite ranking low in the index measuring environmental factors conducive to innovation.

Nigel Holloway, the study’s editor, said:

The message for governments is that there is no substitute for good education, nor for policies that encourage investment in IT and communications infrastructure. For companies, the process of renewal should, if anything, be accelerated. The proportion of total sales from new products and services needs to increase.

The top three nations are not expected to change their positions before 2011.

A report issued by Jones Lang LaSalle, a US-based consultancy, stated that investment in Japanese real estate by foreign investors more than tripled in 2006, reaching $13 billion worth of property. American and Australian investment funds led the charge, with foreign investors on the buying end of a whopping 25% of all real estate transactions done in Japan in 2006. Last year, the total value of real estate scooped up by foreign investors in the Asia-Pacific region soared 58% to $30 billion. 43% of those purchases were conducted in Japan.

According to a report released by the Japan Department Stores Association on Friday, Sales at 276 department stores nationwide declined 1.3% year-on-year in April, after having fallen 1.5% in March. Once again, the JDSA blames unseasonable weather for the fall in sales.

On Saturday, the Nikkei reported that Financial Services Minister Yuji Yamamoto will be making a formal announcement sometime this week in order to introduce plans to develop a “district where overseas businessmen can go about their day-to-day lives speaking English.” The area near Tokyo Station is reportedly being eyed for this project, which will be a collaboration between the newly-founded Urban Renaissance Headquarters, chaired by Prime Minister Shinzo Abe, and the Financial Services Agency.

US-based buyout/activist fund Steel Partners is staying busy. Late last week they delivered a letter to the management of Bull-Dog Sauce Company stating that the fund intends to acquire all existing shares in Bull-Dog that they do not currently own. Steel Partners is offering a 20% premium over Bull-Dog’s closing share price a week ago.

Steel Partners, which currently holds 10.15% of Bull-Dog shares, is the company’s largest single investor. Bull-Dog holds about a 27% share of Japan’s sauce market, and last year’s profit rose by 24.6 percent. At a press conference last week, Senior Managing Director Masaomi Tamiya told reporters, “We think the current management is the most appropriate. We doubt Steel Partners could manage us.”

Society

On Friday, the World Health organization released its 2007 report on global life expectancy. The study shows that females born in Japan continue to have the longest life expectancy in the world, at 86 years. Japanese men, who had previously ranked at the top of the list, were second behind males from San Marino, who currently have a life expectancy of 80 years. The life expectancy of Japanese males stayed at 79 for the second year in a row. Sierra Leone and Swaziland were at the bottom of each list. Males in Sierra Leone and females in Swaziland were each listed as having a life expectancy of 37 years.

While many factors may affect life expectancy, one of them is almost certainly diet. Is whale part of that healthy diet? Japan’s delegation to the International Whaling Commission claims that it’s part of the country’s culinary tradition and that important research is being done through its whaling program.

This latter claim, especially, has long sounded fishy to opponents of commercial whaling, who say Japan and its allies on the IWC, particularly Norway and Iceland, have resorted to underhanded tactics, possibly including bribes, in their quest to lift the moratorium on commercial whaling.

Laos, last week, became the latest landlocked country with no history of or current whaling to join the IWC at Japan’s request and fortuitously receive generous aid payments from Japan coincidentally. The Whale and Dolphin Conservation Society’s Chris Butler-Stroud drew an interesting analogy as he described the threat to the moratorium now that Japan and its allies have a voting majority on the IWC:

The IWC is fast des­cending into a Eurovision-style farce with countries with no tradition in whaling wanting to vote.

There is now a serious threat that commercial whaling is going to return on a large scale.

This may not be via overturning the current moratorium, but through a back door approach whereby they introduce new categories of whaling, strip away the protection currently afforded, and dress up their current whaling practices with new titles which sidestep the ban.

Japan’s headlines and TV news shows this week have been dominated by high profile crimes.

Continuing what anecdotally seems to be an increasing number of child abuse cases, a 21-year-old couple was arrested for dumping the body of their one-year-old son near a highway after apparently inadvertently suffocating him by leaving him in the luggage compartment of a motorcycle while they whiled away the hours playing pachinko.

In what also seems to be an increasing trend, this one of troubled teens, a 17-year-old turned himself into police in Aizu-Wakamatsu, Fukushima with his mother’s severed head in a bag.

Hisato Obayashi, a former yakuza in Nagakute, Aichi is responsible for the first shooting death of an on-duty police officer since 2001. The gangster shot Kazuho Hayashi, a 23-year-old SAT team member, during a 29-hour standoff in which he wounded his son and daughter and his wife escaped out a bathroom window as police evacuated everyone within a three kilometer radius of his house and, along with ample television crews, besieged the house until the man surrendered. The case bears similarities to the case of another former yakuza, who killed a “colleague” and entered a standoff with police surrounding his house in West Tokyo.

The events precipitated a predictable amount of handwringing over the breakdown of morals, with LDP Diet member Tsuneo Suzuki saying, “We are witnessing the deterioration of Japanese society,” and Jun Ayukawa, an expert on criminal psychology at Kwansei Gakuin University in Hyogo, cryptically blaming the changes in the traditional rules and social order on globalization.

The standoff, along with the recent murder of Nagasaki Governor Itcho Ito, has sparked calls for and debate over strengthening Japan’s already strict gun-control laws, but has also given rise to an equal number of vague and/or downright useless suggestions, such as “strengthening the moral fiber” of young people.

On a lighter note, ever wonder how baseball made it to Japan?

It’s hard to say exactly what happened, but Horace Wilson, a Civil War vet from Maine, is credited with being Japanese baseball’s “Adam” figure. In 1872, while teaching at the First Higher School of Tokyo, Wilson, one of a slew of foreign advisors who came to Japan in the early Meiji era, took his boys outside for a break from their studies and introduced them to the joys of throwing, catching, and hitting the little white ball. Mere months later, teams were formed and a seven-inning game was played between a team of Japanese players and a team of foreigners, for which Wilson played left field and scored two runs. The foreigners won 34 - 11.

62 years later, the game had gained such a foothold that Japan’s first professional club was established: the Yomiuri Giants, which, this very biased observer would like to point out, are a wretched, vile organization whose greed and lack of sense will be the death of baseball in Japan, vastly inferior to their crosstown rivals, the Tokyo Yakult Swallows in every way except the. . . erm. . . current standings.

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