Japan

Intelligence for Better Decision Making

Local Governments Reject National Rice Coupon Initiative Amid Administrative and Economic Concerns
Dec. 9, 2025 | Governance & Law

Japan’s central government has allocated significant funds in its latest budget to help households cope with rising food prices.

**The Reiwa 7 supplemental budget sets aside 2 trillion yen for local support measures, including 400 billion yen to provide roughly 3,000 yen per person in relief.**
The government left the choice of distribution method to each municipality, suggesting either physical rice allocations or electronic rice coupons. Agriculture Minister Norikazu Suzuki has actively promoted the coupon scheme, gaining support from leaders of agricultural cooperatives.

**Despite ministerial backing, many local governments have opted out of the rice coupon initiative.**
They cite high issuance and mailing costs, administrative complexity, and concerns over their logistical capacity. Shizuoka Prefecture, Katano City, and Kitakyushu City instead favor options such as free school meal programs or direct cash payments. Officials note that after administrative deductions, the net value of a 500 yen coupon falls to about 440 yen, and additional postage and handling can push overhead above 20 percent.

**Issuing organizations—namely the National Federation of Agricultural Cooperative Associations (JA Zen-Noh) and the National Rice Retail Sales Mutual Aid Cooperative (Zenmeihan)—also face scrutiny over their ability to process large-scale orders on time.**
Municipal staff worry about managing coupon expiration dates, since all vouchers must be redeemed by the end of September 2026, which adds another layer of administrative burden.

**Inside the ruling Liberal Democratic Party, Suzuki’s rice policy has drawn criticism from its agricultural faction.**
Detractors accuse him of favoring particular groups and condemn his abrupt reversal of the previous administration’s policy to increase rice production. They argue that price-support measures should remain under the jurisdiction of local governments rather than be driven by the agriculture ministry.

**A recent survey of 28 Tokyo-area municipalities found that none have committed to distributing government-recommended rice coupons funded by the Priority Support Local Allocation Tax; most are either undecided or firmly opposed.**
Localities such as Edogawa Ward point to the administrative burdens—especially the complexities of mailing and meeting expedited distribution deadlines—as key obstacles.

**Several jurisdictions also question the program’s economic impact.**
They worry that coupons valid nationwide could be redeemed outside the issuing areas, diluting any local economic stimulus. Kawasaki City has warned that the initiative risks becoming a generalized benefit rather than focused relief. In light of these concerns, municipalities including Edogawa and Nakano Wards are exploring direct cash payments as a more flexible response to escalating living costs.

**Some experts suggest redirecting a portion of the rice coupon budget toward broader regional revitalization vouchers that could cover a wider array of food items beyond rice.**
Meanwhile, Taito Ward has emerged as an outlier by launching its own rice coupon distribution at an estimated cost of 240 million yen, illustrating the diverse approaches and financial commitments at the local level.
Japan Enters Contraction as Investment and Exports Weaken in Third Quarter
Dec. 9, 2025 | Macroeconomics & Growth

Japan’s economy slipped into contraction in the third quarter of 2025, driven by broad softness in investment, exports and public spending.

**In the July–September quarter, real GDP fell 0.6 percent from the previous quarter, equivalent to a 2.3 percent annualized decline.**
The revised estimate deepens the initial forecast of a 1.8 percent annualized drop and marks the first negative growth in six quarters, coming in below median private-sector projections. Analysts attribute the downward adjustment to weaker-than-expected activity across multiple investment categories.

**Corporate capital investment declined 0.2 percent quarter-on-quarter, reversing an initially reported 1.0 percent gain.**
Equipment investment swung from a 1.0 percent rise to a 0.2 percent contraction—the first drop in three quarters—and software spending growth was also trimmed. Housing investment fell 8.2 percent, less severe than the preliminary 9.4 percent decline, as tighter energy-efficiency standards and a post-rush demand slump weighed on construction.

**Private consumption edged up 0.2 percent, an improvement over the preliminary 0.1 percent gain, led by increased outlays on dining and food services.**
This marked the third straight quarter of moderate consumption growth, although overall private spending continued to face headwinds.

**Exports fell 1.2 percent, unchanged from earlier estimates, as US tariff hikes on automobiles and other goods dampened foreign sales.**
This represented the first export decline in two quarters. Revised data show private inventories subtracted 0.1 percentage point from GDP growth.

**In the public sector, government consumption growth was revised down to 0.2 percent from 0.5 percent, and public investment swung into a 1.1 percent contraction from a previously reported 0.1 percent increase.**
These downward revisions added further drag on aggregate output.

**The GDP deflator rose 3.4 percent year-on-year, up from an initial 2.8 percent, indicating stronger price pressures.**
After a quinquennial base revision, statisticians raised the quarter’s nominal GDP to about ¥665 trillion, with annualized real GDP now estimated at roughly ¥590 trillion, compared with the initial ¥561 trillion figure.

**The confirmed contraction supports Prime Minister Sanae Takaichi’s recently announced stimulus package, the largest new spending initiative since the pandemic.**
Persistent weakness in business capital outlays and the housing sector adds complexity to the Bank of Japan’s upcoming policy deliberations, though officials appear poised to maintain a gradual path of interest-rate increases.

Monitored Intelligence for Japan - Dec. 9, 2025


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<視点>日中関係巡る発言 「吠え面かく」のは誰か 論説委員・竹内洋一

Perspective on Statements Surrounding Japan-China Relations Who Is Making a Fool of Themselves Editorial Board Member Yoichi Takeuchi

Tokyo Shimbun | Local Language | News | Dec. 9, 2025 | Shifting Geopolitical Alliances

In April 2012, Tokyo Governor Shintarō Ishihara announced a plan for the Tokyo metropolitan government to purchase three of the Senkaku Islands, then privately owned. His statement aimed to challenge the government, but it set the stage for significant diplomatic tensions. Later that year, the national government decided to nationalize the islands instead, a move intended to ensure more stable management.

Former Prime Minister Yoshihiko Noda reflected on this decision, acknowledging his own role in worsening Japan-China relations. The nationalization failed to secure prior understanding from China, which claims sovereignty over the islands. This led to widespread backlash in China, including boycotts of Japanese products and anti-Japan demonstrations that escalated into riots, signaling a major diplomatic failure.

Moreover, the nationalization did not enhance security. Since then, incursions by Chinese government vessels into territorial waters around the Senkaku Islands have increased and become routine, requiring constant vigilance by the Japan Coast Guard to maintain effective control. The episode highlights the complexities and high risks involved in Japan-China territorial disputes.

当然?軽率?高市首相の「台湾有事発言」 世論調査から見た〝民意〟

Natural or Reckless? Prime Minister Takaichi's Statement on a Taiwan Contingency Seen Through Public Opinion Polls

Mainichi Shimbun | Local Language | News | Dec. 9, 2025 | Geopolitical Conflict and Disputes

Prime Minister Sanae Takaichi’s statement in the House of Representatives on November 7, 2025, regarding a potential Taiwan contingency has led to strained Japan-China relations. She remarked that if China were to impose a maritime blockade on Taiwan involving armed force, it could create a "crisis situation threatening the existence of the state," justifying Japan's exercise of collective self-defense. This position, unprecedented from a sitting Japanese prime minister, prompted strong backlash from the Chinese government, including demands for retraction, travel advisories against Japan for Chinese citizens, suspension of Japanese seafood imports, and cancellations of Japanese cultural events in China.

Despite the backlash, Prime Minister Takaichi did not retract her statement, and Cabinet approval ratings have held steady at 65% for October and November 2025. A Mainichi Shimbun opinion poll found that 50% of respondents did not view the statement as problematic, while only 25% thought there was a problem. Among Cabinet supporters, support increased, with 67% approving the remark, and among those expecting strong leadership from the prime minister, approval rose to 74%. Takaichi’s firm stance against China appears to have reinforced her support base.

The poll also revealed generational differences in opinion. In all age groups, a majority felt the remark was not problematic, but the percentage viewing it as problematic increased with age—from 13% among 18- to 39-year-olds up to 38% among those 70 and older. Among the eldest group, opinions were nearly evenly split. These findings suggest greater sensitivity to military force issues among older generations. Respondents who approved of the prime minister’s statement highlighted reasons linked to her strong leadership and defense posture.

‘Free-riding’ U.S. allies that don’t step up ‘will face consequences,’ Hegseth warns

Japan Times | English | News | Dec. 9, 2025 | Shifting Geopolitical Alliances

U.S. Defense Secretary Pete Hegseth warned that allies who engage in "free-riding" by not increasing their defense spending to support collective defense efforts will face consequences. His remarks came shortly after the White House released a new National Security Strategy urging partner nations to take primary responsibility for defending their own regions.

Hegseth praised countries like South Korea, which has committed to raising its defense spending to 3.5% of GDP, stating that such "model allies" will receive special favor from the U.S. He also hinted at expectations for other Indo-Pacific allies, including Japan, to increase their defense contributions in the coming years, reflecting optimism from the Trump administration.

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