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

News
Media
297

Government
Releases
23

City/State
Releases
71

Embassy
Releases
0

Foreign
Service
Advisories
0

Academic/
Think
Tank
6

Podcasts
0

Videos
0

Social
Media
0

Business
Releases
0

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‘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.

Hegseth calls on US allies to shoulder more defense burden

NHK | English | News | Dec. 9, 2025 | Geopolitical Conflict and Disputes

US Defense Secretary Pete Hegseth emphasized US defense priorities focused on deterring China and increasing defense burden sharing among US allies and partners. Speaking at a forum in California, he highlighted four key areas: defending the US homeland and western hemisphere; deterring China through strength rather than confrontation; urging allies and partners to increase their defense contributions; and boosting the US defense industrial base.

Hegseth stressed that maintaining a balance of power in the Indo-Pacific is essential for sustained peace, clarifying that the US does not intend to "strangle China's growth." He argued that the US and its allies must be strong enough in the region to prevent any aggression, thereby preserving peace and stability.

He called on US allies to contribute more to their defense budgets, warning that free riding by allies would no longer be accepted. Hegseth praised NATO's commitment to allocate five percent of GDP to defense and expressed hope that Indo-Pacific allies will adopt a similar approach in the coming years using the NATO model.

沖縄周辺で空母から発着１００回６、７日に中国「遼寧」の艦載機

100 Takeoffs and Landings from Aircraft Carrier near Okinawa on June 6 and 7 by China's Liaoning Carrier-Based Aircraft

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

On June 6 and 7, China's Navy aircraft carrier Liaoning conducted about 100 takeoffs and landings of its carrier-based fighter jets and helicopters near Okinawa. The operations took place over the Pacific, between Okinawa's main island and Miyako Island on the 6th, and between Okinawa main island and Minami-Daito Island on the 7th.

On June 6, a J-15 fighter jet from the Liaoning intermittently illuminated a Japan Air Self-Defense Force F-15 fighter with its radar, prompting a formal protest from the Japanese government. The Liaoning, accompanied by three missile destroyers, sailed southward between Okinawa main island and Miyako Island before altering course northeastward from about 270 kilometers west of Okidaito Island.

The carrier-based aircraft made repeated takeoffs and landings, about 50 on each day, without entering Japanese territorial waters or violating airspace. Japanese Maritime Self-Defense Force escort ships monitored the deployment, and Air Self-Defense Force aircraft scrambled in response.

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