Japan

Intelligence for Better Decision Making

Japan's Record Current Account Surplus Driven by Trade Balance Rebound and Rising Exports
Jan. 15, 2025 | Indirect Indicator

In November, Japan's current account surplus experienced a noteworthy improvement, climbing to 3.35 trillion yen ($21.3 billion).

This represents a 54.5% surge from the previous year and is the highest ever recorded for November. This substantial surplus was chiefly propelled by a rebound in the goods trade balance, which showed a surplus of 97.9 billion yen, a significant recovery from the 683.3 billion yen deficit reported in the same month the previous year. This marks the 22nd consecutive month of surplus in Japan's current account, reflecting the nation's solid international trade footing.

Exports played a considerable role in this turnaround, increasing by 2.8% year-on-year to 8.91 trillion yen. This growth was fueled by strong demand for chip-making equipment and nonferrous metals. Simultaneously, imports decreased by 5.7% to 8.81 trillion yen, largely as a result of declining energy prices, both of which contributed to the positive shift in the goods trade balance.

Furthermore, Japan's primary income from overseas investments saw a significant increase of 13%, reaching 3.44 trillion yen, driven by improved returns, notably in the chemical and food sectors. The services trade surplus also experienced remarkable growth, nearly tripling to 238.6 billion yen, the highest ever for November. This growth was largely attributed to a favorable travel balance, with foreign visitor numbers rising by 30.6% to 3.19 million. Additionally, the weak yen encouraged higher foreign spending in Japan compared to the expenditure of Japanese tourists abroad.
Tokyo Women's Medical University Governance Crisis
Jan. 15, 2025 | Indirect Indicator

Kinuko Iwamoto, the former chancellor of Tokyo Women's Medical University, has found herself at the center of a scandal following her arrest by the Tokyo Metropolitan Police.

She stands accused of diverting approximately 117 million yen intended for construction consulting fees to her personal use. Between July 2018 and February 2020, payments were allegedly made to an architect for services that were never rendered, with portions of these funds reportedly funneled back to Iwamoto. In response to these allegations, the university is fully cooperating with the ongoing investigation and is committed to strengthening its governance measures to prevent such misconduct in the future.

Iwamoto's arrest is the culmination of a detailed third-party investigation that exposed significant governance failures, leading to her dismissal in August 2024. The investigation revealed that Iwamoto, who ascended to the presidency in 2019 after serving as vice president since 2014, orchestrated fictitious payments under the guise of service fees for constructing new school buildings. Authorities believe she worked in collusion with a former employee and a male architect. These illicit activities have inflicted severe financial damage on the university and severely tarnished its reputation.

Earlier in March, in connection with an inquiry into improper salary payments to non-existent university employees, authorities conducted searches at the university and Iwamoto's home. This inquiry, which began following alumni complaints, also shed light on Iwamoto's allegedly autocratic leadership style. Known as the "empress" during her tenure, she reportedly suppressed dissent and created an oppressive atmosphere, even facing accusations of surveilling a former hospital executive who reported corruption.

The investigation also uncovered Iwamoto's suspected ties to an architect hired in April 2016. This architect received lavish compensation without fulfilling contractual duties, accruing about 310 million yen in advisory fees over four years. Additionally, approximately 37 million yen was reportedly funneled through aides for luxury purchases. As the investigation progresses, more financial irregularities involving excessive compensation and unauthorized payments are coming to light.

This scandal has brought intense scrutiny to Tokyo Women's Medical University, prompting calls for reform. Osamu Shimizu, the current chancellor who assumed office in December, has publicly apologized to stakeholders. He has assured them of the university's commitment to enhancing governance, bolstering accountability, and preventing future mismanagement. Iwamoto's actions have jeopardized the institution's standing, prompting officials to advocate strongly for increased transparency and responsibility.

Monitored Intelligence for Japan - Jan. 15, 2025


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North Korea launches missiles toward eastern waters in 2nd launch of year, South says

Asahi Shimbun - E | English | News | Jan. 15, 2025 | North Korea

North Korea test-fired multiple short-range ballistic missiles into its eastern waters, marking its second launch of the year. The missiles flew approximately 250 kilometers before landing between the Korean Peninsula and Japan. South Korea's military condemned the test as a serious provocation that threatens regional peace, ramping up surveillance and sharing launch details with U.S. and Japanese forces.

This missile launch follows an earlier test on January 6, involving a hypersonic intermediate-range missile aimed at distant Pacific targets. North Korean leader Kim Jong Un is focused on expanding the nuclear-capable arsenal to counter perceived threats from rivals. In 2024, North Korea has intensified weapons testing, showcasing advanced systems including solid-fuel intercontinental ballistic missiles and short-range missiles designed to evade missile defense.

Concerns over North Korea's military advancements have heightened, particularly regarding potential technology transfers from Russia amid their alignment on the Ukraine conflict. During a year-end conference, Kim criticized U.S. efforts to strengthen security ties with South Korea and Japan, portraying them as a nuclear military bloc. While North Korean state media did not elaborate on Kim's strategies or mention Donald Trump specifically, any prospects for diplomatic engagement appear unlikely due to Kim's strengthened military posture and the complex geopolitical landscape.

【#1213】Ishiba’s Precarious Leaning towards Japan-China-S. Korea FTA

Japan Institute for National Fundamentals | English | AcademicThink | Jan. 15, 2025 | Shifting Geopolitical Alliances

The government of Prime Minister Shigeru Ishiba is adopting a pro-China stance by planning to invite Chinese Foreign Minister Wang Yi to Japan in February for a trilateral meeting with South Korea. Significant discussions regarding a Japan-China-South Korea free trade agreement (FTA) are underway as China seeks to restart negotiations that stalled in 2019. The leaders of the three nations previously committed to accelerating FTA discussions, aiming to create a comprehensive agreement that exceeds the standards of the Regional Comprehensive Economic Partnership (RCEP).

China is urging Japan to engage in negotiations on the proposed FTA. However, Japan is wary of China's industrial subsidies and preferential treatment for state-owned enterprises. Progress will depend on China addressing these structural issues, which have led to global market distortions through overproduction and dumping of exports, particularly in electric vehicles and solar panels. Japan, along with the U.S. and Europe, stresses the need for fairness from China amid ongoing economic tensions, such as bans on Japanese fishery products and restrictions on critical minerals.

As Japan enters FTA talks, it risks backlash from the incoming Trump administration, which may perceive Japan's actions as being too favorable to China. Foreign Minister Takeshi Iwaya’s recent diplomatic engagements with China have raised concerns domestically about U.S. perceptions regarding Japan’s market integration with China. To alleviate these tensions, Japan must ensure that its FTA negotiations focus on addressing China's structural issues.

Additionally, China aims to strengthen its position for potential engagement with the Trans-Pacific Partnership (TPP) through a successful trilateral FTA, which could limit U.S. influence in the region. Should Japan pursue FTA discussions without discretion, it risks falling into China's strategic trap, potentially jeopardizing its trade and foreign policy in the long term.

「本当に安全か」オスプレイ、半年後に佐賀移駐 事故連発に増す懸念

"Is it really safe?" Ospreys to be relocated to Saga in six months; growing concerns over series of accidents

Mainichi Shimbun | Local Language | News | Jan. 15, 2025 | Accidents

Accidents and safety concerns surrounding the Osprey transport aircraft are drawing scrutiny as the Ministry of Defense plans to deploy them at Saga Airport by early July. Various incidents have raised alarms, including a JGSDF accident in Okinawa and the cancelation of demonstration flights due to safety issues. Saga Prefecture Governor Yamaguchi Yoshiyoshi has expressed concerns about precautionary landings and the differing safety responses between Japan and the United States.

The US military recently suspended Osprey operations following a gearbox malfunction linked to a crash in New Mexico, amplifying worries in Japan. Governor Yamaguchi criticized the GSDF for its slow response in halting flights and stressed the need for better communication between the two countries. As 17 V22 Ospreys are set to be transferred from Kisarazu Garrison and construction of the Saga Garrison progresses, safety remains a critical issue.

Ospreys have a history of significant accidents, leading to suspensions of operations in both countries. Local fishermen and residents are increasingly questioning the safety of their deployment due to a series of emergency landings, which the Ministry has characterized as precautionary. Despite the Ministry's assurance of the Osprey's safety, ongoing incidents are eroding public confidence.

To address these issues, the Ministry of Defense will establish a liaison office in Saga Prefecture to improve communication ahead of the deployment. Governor Yamaguchi has called for transparency regarding safety concerns, advocating for clear explanations and measures to build community trust as the deployment date approaches.

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