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. 10, 2025


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既得権から逃れられぬ自民党

The Liberal Democratic Party Unable to Escape Established Interests

Research Institute of Economy, Trade and Industry | Local Language | AcademicThink | Dec. 10, 2025 | Political Scandal or Corruption

The Liberal Democratic Party's current agricultural policy reflects a strong alignment with producer interests, particularly those of rice farmers, while largely neglecting consumer interests. The new minister of agriculture and fisheries maintains the stance that market forces should determine prices, yet the government continues to implement producer-focused interventions such as set-aside subsidies that reduce rice supply and market purchases to prop up rice prices. Consumer-oriented measures like tariff reductions, expanded import quotas, and stricter regulation of agricultural cooperatives remain unaddressed.

This producer bias sustains historically high rice prices, benefiting farmers but disadvantaging consumers who pay elevated prices without receiving compensatory measures like rice vouchers. The underlying cause of high prices is the considerable financial support allocated to set-aside subsidies, costing around 350 billion yen, plus an additional 400 billion yen fiscal burden associated with rice vouchers. These policies favor a segment of producers at the expense of consumers and taxpayers, indicating that the Ministry of Agriculture, Forestry and Fisheries serves vested interests rather than the broader public.

The continuation of inflated rice prices allows small-scale, part-time farmers with high production costs to persist, hindering structural reforms and farm consolidation. Farmland is not efficiently leased to full-time farmers seeking expansion, while agricultural cooperatives benefit from stable membership of small part-time farmers, securing substantial deposits and enabling investment opportunities abroad or elsewhere.

Questions are raised about whether Prime Minister Sanae Takaichi, who has handed over agricultural policy to vested interests, can truly be considered a successor to former Prime Minister Shinzo Abe, known for agricultural cooperative reform. The current high rice prices have suppressed consumption, increased imports, and resulted in stockpiles. The article warns that if rice prices eventually collapse without government intervention, it could trigger political fallout, including a significant decline in cabinet approval ratings.

Thailand launches airstrikes on Cambodia military

NHK | English | News | Dec. 10, 2025 | Geopolitical Conflict and Disputes

Thailand has conducted airstrikes on Cambodian military targets along their disputed border following the death of a Thai soldier, whom Thailand says was killed by Cambodian troops' gunfire. Both countries accuse each other of initiating the recent violence. The conflict has forced tens of thousands of people to flee the border area.

Cambodian officials denied triggering the violence and condemned the Thai airstrikes, claiming they killed four civilians and violated a peace agreement signed in October. This pact was established after deadly clashes in July. Thailand previously suspended the peace accord last month, accusing Cambodia of causing a land mine explosion that injured Thai soldiers, a charge Cambodia denies.

Malaysian Prime Minister Anwar Ibrahim, chair of ASEAN in 2025, urged both Thailand and Cambodia to exercise restraint to avoid escalating the dispute further, emphasizing the importance of peace between two key ASEAN members and the wider regional stability.

官房長官「岩手県で停電800戸」 青森に内閣府調査チームを派遣

Chief Cabinet Secretary: 800 Households Without Power in Iwate Prefecture, Cabinet Office Investigation Team Dispatched to Aomori

Nikkei | Local Language | News | Dec. 10, 2025 | Critical Infrastructure Failure

Chief Cabinet Secretary Minoru Kihara reported on the earthquake in Aomori Prefecture, which registered a seismic intensity of 6+. In response, a Cabinet Office investigation team of five members has been dispatched to Aomori to assess the damage and local response efforts. The situation at the Rokkasho nuclear facility is under confirmation, and a disaster response meeting with relevant ministries was scheduled for 3 a.m.

Damage from the earthquake includes fires and power outages primarily in Hachinohe City, with multiple emergency calls reported. Approximately 800 households in nearby Iwate Prefecture are also experiencing power outages. No information on water or communication outages was available. The public was advised to remain alert for potential aftershocks of similar intensity over the next week.

No abnormalities have been reported at the Higashidori and Onagawa nuclear power plants. Due to a tsunami warning, people were urged to evacuate immediately to higher ground or designated evacuation sites. Prime Minister Sanae Takaichi emphasized timely public information, rapid damage assessment, and close coordination with local governments to prioritize life-saving and rescue operations.

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