In this edition of TPR News: The LDP presidential candidates are announced and the factions line up, Ozawa cruises back into the DPJ presidency, Japan to pull out of Iraq, Government to issue more bonds, electric motorcycles, good times for Suntory Beer, and much more.

Politics

On Wednesday, the LDP presidential campaign officially started with five candidates placing their names in contention. The contenders are: Taro Aso, currently the LDP Secretary General, former Defense Minister Yuriko Koike, Shigeru Ishiba, also a former Defense Minister, State Minister for Economic and Fiscal Policy Kaoru Yosano, and former LDP policy chief Nobuteru Ishihara.

At this point, Aso, who heads his own faction, is the clear front-runner, with 197 out of 386 Diet votes secured, according to a Yomiuri Shimbun poll of LDP Diet members. Yosano, unaffiliated with a faction, is in a distant second place, with 34 lawmakers saying they plan to vote for him. Koike, of the Machimura faction, has 29 votes in her column, and Ishiba, of the Tsushima faction, and Ishihara, of the Tamasaki faction, each have 24.

125 LDP Diet members, from both houses, showed up to Aso’s campaign kick-off ceremony on Wednesday, a much more auspicious beginning for him than the pathetic turnout that marked a couple of his three previous runs for the presidency and the founding of his faction less than two years ago.

All five candidates’ organizations are working the prefectures hard to net a big chunk of the 141 prefectural votes, although even great success there might not be enough to allow the four trailing candidates to catch up with Aso, who has garnered support of varying levels from each of the party’s eight factions. If past races are any indication, Aso has an ace in his hand in the form of the support of Yoshiro Mori, the LDP’s veritable kingmaker.

Of the prefectures, 32 allocate their votes proportionally, while 15 operate under a first past the post, or winner-take-all system.

In a brief factional breakdown, Aso has secured support from 46 of the 88 members of the faction led by Chief Cabinet Secretary Nobutaka Machimura, 24 members of the faction led by Finance Minister Bunmei Ibuki, all 16 members of the faction led by Minister of Economy, Trade, and Industry Toshihiro Nikai, 13 members of the faction led by Foreign Minister Masahiko Komura, and, of course, all 20 members of his own faction.

Aso also has the very likely support of at least 20 of the 69 members of the faction led by LDP Tax System Research Commission Chairman Yuji Tsushima and at least 20 of the 62 members of the faction led by LDP Election Strategy Council Chairman Makoto Koga.

Last, but perhaps not least, considering the the likelihood of a general election in the near future, Aso has the support of the public, with 42% of respondents to an Asahi Shimbun poll saying they wanted him to win the LDp presidential race. Ishihara came in a distant second with 10%. Koike, Yosano, and Ishiba garnered eight, six, and three percent, respectively.

The new party president will be officially chosen at the party’s joint plenary meeting on September 22nd, with the winner presumably being officially appointed Prime Minister a few days later.

Former Prime Minister Koizumi, wearing the same light gray election jacket he wore to outgoing Prime Minister Fukuda’s election last year, jokingly said he couldn’t give a public endorsement to any of the candidates as all of them served in his Cabinet at one time or another when he was Prime Minister. It’s worth noting, though, that Yuriko Koike is a noted Koizumi loyalist and it would not be too much to say she owes her political career to him.

The day before the LDP’s meeting, the opposition DPJ will hold a convention to officially approve the reelection of Ichiro Ozawa as party president. As expected, no challengers presented themselves when the DPJ’s campaign officially started on September 8th.

Ozawa has said that he will present himself as an alternative Prime Ministerial candidate at the convention, a ceremonial step he also took last year, when the DPJ-led Upper House voted in favor of him before having its vote overridden by the LDP-controlled Lower House, which obviously elected Yasuo Fukuda.

Both Ozawa and the newly-minted LDP president will have to immediately get down to work as senior members of the ruling coalition have said the Lower House would be dissolved and a general election called soon after the extraordinary Diet session is convened and the new Prime Minister named on September 24th.

Presumably, the ruling camp wants to take advantage of the inevitable spike in popularity ratings that will come with the selection of a new Prime Minister and, more cynically, let the new head honcho lead them in the election campaign before he has a chance to do anything bad or fail to make progress toward his stated goals.

Finally, in a foreign affairs issue somewhat related to the Maritime Self-Defense Force refueling mission that’s sure to be a big issue in the next Diet session, the Air Self-Defense Force is considering recalling its unit flying transport missions between Kuwait and Iraq by the end of the year.

According to Chief Cabinet Secretary Nobutaka Machimura, “The purpose of the special law for Iraqi reconstruction has been fulfilled,” because security in Iraq has improved, making the ASDF’s mission complete, a sentiment echoed by Defense Minister Yoshimasa Hayashi.

The pullout would coincide with the end of the UN resolution authorizing Japan’s presence in Iraq and Japan’s announcement comes shortly after President Bush’s announcement that the US would withdraw 8,000 of its troops.

Since the ASDF mission began in March 2004, three Japanese C-130 cargo planes have made 768 trips, carrying approximately 640 tons of supplies from Kuwait to various Iraqi cities. Given that the ASDF was limited to very low-risk missions in low-risk areas, some Middle East scholars in Japan have called Japan’s contribution to Iraqi security negligible. Nevertheless, some politicians, at least, see Japan’s foray into a war zone sans major incident as a victory - one that might help them sell the public on the idea of a more assertive foreign policy in the future.

Business and the Economy

We begin with an issue as much political as economic. Japan will issue ￥400 billion in new government bonds to help finance ￥1.8 trillion in spending measures. As the government has vowed not to issue any more deficit-spending bonds, the ￥400 billion will be in so-called “construction bonds”, which can be used only for public works. According to Reuters:

The Ministry of Finance is due to issue 105.1 trillion yen ($975 billion) in government bonds to the market via regularly scheduled auctions this fiscal year to next March.

Honda and Yamaha have announced plans to begin selling electric motorcycles. Yamaha is planning to have the bikes on the market in Japan for 2010, while Honda is looking at launching its electric motorcycle a year later. The bikes will be able to travel an estimated 450 kilometers per 100 yen worth of electricity, and will have about the same engine power as a 50cc displacement gasoline engine. Both companies intend to sell the electric motorcycles to domestic delivery firms, and Honda reportedly has its eyes set on selling its bikes to the Japan Post Service Company.

Brewer Suntory continues to outsell its competitors in Japan’s beer market. In August, the company sold 26% more beer by volume than a year ago, while its three major competitors are expected to announce double digit slides in sales. Suntory’s secret? While the other beer makers raised prices back in April, Suntory decided to wait until September 1 to put higher prices in play. As a result, sales of happoshu rose 69% in August. With Suntory’s price hikes now in effect, the watch is on to see if the firm can remain ahead of rival Sapporo Breweries to claim the #3 spot in the Japanese market.

In an attempt to grab some attention in a saturated market, Sapporo has announced that it will be Japan’s first private company to label its products with their “carbon footprint.” Sapporo estimates that a 350 milliliter can of Black Label beer represents 161 grams of carbon emission, once grain output, fertilizers, transportation and the production and recycling of the aluminum can itself are taken into account.

Speaking of Sapporo, US hedge fund Steel Partners has issued a new letter to the firm’s management, calling on the board of directors to open talks that would lead to the fund taking a greater stake in the firm. Steel Partners is currently Sapporo’s largest single shareholder, and holds an 18.6% equity stake in the company. In March, Steel Partners announced that it intends to boost its share to 33.3%.

Beef-bowl outlet Yoshinoya opened its first shop in Arizona recently, adding to the 84 shops in California, 2 in Nevada and 1 in New York that the firm currently boasts, in addition to its over 1,200 locations in Japan, Taiwan, Hong Kong, and Singapore. On the menu in Arizona: Chicken teriyaki, a grilled shrimp bowl, chicken salad and good old gyuudon.

Society

The size of Japan’s education budget, when compared to GDP, ranks last in the OECD, but still gets pretty decent bang for its buck when taking student test scores into account. Student/teacher ratios are obviously not the end-all-be-all when assessing a nation’s educational system, but a large amount of credit must be paid to private citizens who shoulder the expense of additional cram school lessons throughout their child’s long, test-filled journey to university. Japan has ranked near or at the bottom of OECD rankings for spending for several years now.
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While retaining his post as a director of the Japan Sumo Association, Kitanoumi resigned as the group’s chairman to take responsibility for the recent arrests of three non-Japanese sumo wrestlers for possession and use of marijuana. One of the wrestlers, 26-year-old Hakurozan, was from Kitanoumi’s own stable.

While it’s understood that smoking pot would get one dismissed from jobs with any number of corporations, the JSA is no normal company. While the association is not a  stranger to scandal, this is “Japan’s sport” we’re talking about here, and any slight to its purity is taken very seriously. With the amount of media attention paid to “weedgate” over the past few weeks, one would be excused for thinking that the wrestlers had abducted a member of the royal family and had gratuitous sumo sex with said individual after taking a few hits from the bong. We’re not talking about crystal meth or heroin or anabolic steroids in this case, but it’s difficult to tell if any of the talking heads understand the difference. Marijuana is generally not considered to be much of a performance-enhancing drug. Although it could be argued that marijuana-smoking sumo rikishi might benefit from late-night bouts of the munchies, thus unfairly ballooning their ability to add girth.
With the three potheads now banned from sumo, the makuuchi division is a bit less competitive than it used to be. Imagine how good they could have been without the grass…

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Did you hear the one about how 94.3% of 20-something women in Japan own a piece of Louis Vuitton couture? Yeah? Well, it’s probably because a lot of people who should know better have been throwing it about as though it is actually true. Even the Financial Times has repeated this wacky factoid in public, and thankfully Marxy has called the entire fashion industry to task. He reasons that ownership could be in the 30-40% range, at least in major urban areas like Tokyo, but that the 94.3% figure needs to be put to rest.

If anyone from Louis Vuitton is reading this post, please e-mail transpacificradio@gmail.com to inquire about our generous advertising packages.

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