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GB "Japanews Digest" November 2023

Radboud Molijn
Dec 1, 20238 min read

Every week, we scour the web for the hottest Japanese news items, using a variety of news outlets. At the end of the month, we translate a selection of articles into English and curate them into a little digest so you can get an overview of the latest news that moves Japan, which can at times be surprisingly different from what the English versions of major Japanese news papers put out there. The digest is divided up into 4 categories in no particular order: Economy, Corporate, Society and Politics.


The following covers major news highlights of November 2023, presented in chronological order per category.


Economy


Cabinet Approves Economic Measures Toward Deflation Eradication, Prime Minister Kishida Aims for Wage Increases Beyond Price Rises by Next Summer (November 2)

The "Comprehensive Economic Measures for the Complete Eradication of Deflation" have been approved by the cabinet with a budget of around 17 trillion yen. To achieve wage increases commensurate with the expected rise in prices, a tax system revision for small and medium-sized enterprises is proposed. A new system, allowing some tax incentives even for companies in the red, will be announced by the end of the year. Recognizing that 70% of Japan's workforce is employed by small and medium-sized enterprises, and many of them operate at a deficit without the ability to benefit from tax deductions, the aim is to address the current situation and enable wage increases.


Individual Benefits and Tax Cuts Also Announced As an emergency measure for livelihood support, a one-time payment of 70,000 yen will be provided to low-income individuals. In addition, in June of next year, income tax reductions will be implemented for workers (including dependents). A reduction of 40,000 yen will be applied per person for both income tax and resident tax. For a four-person family, this translates to a reduction of 160,000 yen. Prime Minister Kishida explained that by combining wage increases (aimed to be realized by next summer) with income tax reductions, he hopes to create a positive cycle toward the eradication of deflation.



Supplementary Budget Approved with a Total of 13.192 Trillion Yen (November 29)

The supplementary budget, with a total amount of 13.192 trillion yen, has been approved. The budget allocates funds for various measures, including a cash payment of 70,000 yen to households exempt from resident taxes, an extension until next April of relief measures for electricity and gas expenses, and a wage increase for care workers (around 6,000 yen per month).


Source: NHK


Corporate


Toshiba Formally Decides to Delist from Stock Exchange (November 22)

A resolution to delist was adopted at an extraordinary general meeting of shareholders. Delisting will take effect on the 20th of next month. This marks the first time Toshiba will be delisted since 1949 (since the resumption of trading on the Tokyo Stock Exchange after World War II). Toshiba faced a management crisis in 2015 when inappropriate accounting practices were uncovered. There was a confrontation with overseas investors over the policy of rebuilding management. This year, the company was acquired by a domestic fund for about 2 trillion yen, and it announced its intention to pursue management reconstruction as a private (non-listed) entity.



Former Bandai Namco Temp Worker Embezzles 87 Million Yen (November 24)

Bandai Namco Holdings reported the submission of a criminal complaint regarding the embezzlement of 87 million yen by a former temporary employee. Over the span of eight years until 2023, the ex-temporary worker illicitly took discarded toys and other products, planning to be disposed of, and resold them for personal gain. This incident follows another embezzlement case by a former employee amounting to 600 million yen, which was uncovered in January of this year. Bandai Namco had emphasized the reinforcement of compliance education for its employees in response to the earlier incident.



Over 400,000 Pieces of Personal Information Leaked from LINE due to Cyberattack on Major Shareholder NAVER (November 27)

A malware attack, identified as a cyberattack, targeted the major shareholder, South Korean company NAVER, resulting in the leakage of personal information from LINE, with more than 400,000 pieces of user data compromised. LINE services are operated by "LINE Yahoo Japan Corporation," a joint venture between SoftBank and South Korean NAVER. The LINE service itself was initially established by NAVER's Japanese subsidiary, and its internal systems remained under NAVER's control. The information breach is attributed to this continuity in the internal systems.


Source: Reuters


Seven & i Holdings Acquires Seven-Eleven Operator in Australia (November 30)

Seven & i Holdings is set to acquire a local company operating under the "Seven-Eleven" license in Australia for approximately 170 billion yen. This move is positioned as an advance investment, anticipating population growth in Australia and the consequent expansion of the convenience store market.


Background: Seven-Eleven was originally a chain store brand operated by a U.S. company. Outside the United States, local companies with a "Seven-Eleven" license operate the stores. In 1991, the Japanese subsidiary of Seven-Eleven faced a management crisis and executed a reverse takeover of the struggling U.S. headquarters. Currently, the Japanese subsidiary effectively serves as the headquarters. However, excluding Japan and the United States, local companies holding the "Seven-Eleven" license continue to operate convenience stores under the Seven-Eleven brand.



Society


Former Unification Church Holds Apology Press Conference, Expresses Intent to Deposit 10 Billion Yen for Compensation to the Government (November 6)

At a press conference, Tominobu Tanaka, the chairman of the former Unification Church, apologized for causing a stir in society due to insufficient guidance to its believers. The apology was framed as an expression of regret to the public, not specifically for the damage caused by high donations.

To provide compensation funds for victims, Tanaka revealed the intention to deposit around 10 billion yen with the government. Even in the event of a dissolution order issued against the religious organization, the plan is to continue providing financial compensation to victims through these deposited funds. This move aims to dispel suspicions of the organization hiding assets, such as transferring property overseas.

Unlike the usual "deposit" system defined by civil law, this specific 10 billion yen deposit (intention) lacks a designation of specific creditors, necessitating special measures. In essence, it shifts the responsibility to the government, urging proactive involvement. Chief Cabinet Secretary Matsuno refrained from providing comments on the matter.



Japan and China Address Outstanding Issues at Summit (November 16)

The face-to-face meeting between the leaders of Japan and China took place for the first time in a year. Talks had been suspended for an extended period due to issues related to the release of treated nuclear water and security concerns. During the summit, there was a consensus reached through close communication at the leadership level. Prime Minister Kishida directly addressed contentious issues such as the disagreement over the treated nuclear water and military provocations in the Taiwan Strait during the talks.



Government Aims to Address High Billing Issues in Host Clubs (November 20)

Prime Minister Kishida addressed the issue during a parliamentary session, expressing the government's intention to strengthen measures against illegal activities by employees of host clubs. The focus is on curbing illegal actions by employees and addressing the problem where young female clients, often in their teens to twenties, accumulate significant debts through frequent visits to host clubs. There have been reports of these individuals being coerced into acts of prostitution by host club employees as a means to repay their debts.



Editor's note: Japanese host clubs are entertainment venues where charismatic male 'hosts' entertain predominantly female clientele. Hosts engage in conversation, pour drinks, and create a lively and enjoyable atmosphere. Clients pay for the hosts' company, and while these interactions are generally platonic, issues related to high billing, debt accumulation, and illegal activities have been reported in some cases.


Host clubs fall into the category of mizu shobai (lit. "the water trades"), which is an umbrella term for businesses in the nightlife and entertainment industry, typically involving the service of alcoholic beverages. It encompasses a range of establishments including as bars, nightclubs, host/hostess clubs, and similar venues where patrons can enjoy socializing and entertainment while consuming drinks. The term is often associated with the nightlife district, and these businesses play a significant role in Japan's social and entertainment culture.


Seoul High Court Orders Compensation for Former Comfort Women from Japanese Government (November 24)

In a lawsuit filed by former comfort women against the Japanese government, the Seoul High Court issued a reversal verdict in the second trial, ordering the Japanese government to pay approximately 23 million yen (2 million won) to each former comfort woman. While the initial trial dismissed the claims based on sovereign immunity, the second trial did not recognize sovereign immunity. The court considered the Japanese government's wrongful acts against Koreans during the period of Japanese rule as a de facto domestic issue, falling under the exception to sovereign immunity. The Japanese government has chosen not to participate in the legal proceedings, citing sovereign immunity.



Politics


Hiroshi Hirasada, Former Speaker of the House of Representatives from the Liberal Democratic Party, deceased (November 10)

Hiroshi Hirasada, the former Speaker of the House of Representatives from the Liberal Democratic Party, has passed away at the age of 79. Hirasada resigned from the position of Speaker last month due to health issues but had expressed his intention to continue his activities as a legislator.


Source: NHK


Kenji Kanda, Deputy Minister of Finance from the Liberal Democratic Party, Resigns from Position (November 13)

Weekly magazines reported that Kenji Kanda had been in arrears on taxes four times in the past, leading to criticism from opposition parties claiming that he was unsuitable for the position of Deputy Minister of Finance. While Kanda acknowledged the facts, he had denied resigning from his position. Prime Minister Kishida is seen as effectively replacing him. Kanda is the third person to resign from the political leadership roles (ministers, vice ministers, and parliamentary secretaries) since the cabinet reshuffle in September.



Bill for Salary Increase for Special Positions in National Civil Service Approved and Enacted (November 17)

A bill proposing a salary increase for special positions in the national civil service, including members of parliament and judiciary officials, has been approved and enacted. The annual salary for the Prime Minister will increase by approximately 460,000 yen, while ministers will see an increase of around 320,000 yen. Opposition parties criticized the salary increase for politicians amidst rising prices. In contrast, the ruling party explained the bill as a measure to prevent the momentum for wage increases associated with rising prices from stopping. Prime Minister Kishida and the political leadership plan to return the increased portion of their salaries to the national treasury.


Source: NHK


Kishida Administration's Cabinet Approval Rating Hits Record Low (Around November 20)

In consecutive public opinion polls conducted by major media outlets such as NHK, Asahi Shimbun, and Yomiuri Shimbun, the approval rating for the Kishida administration plummeted to the 20% range. This marks the first time it has fallen to the 20% range since the start of the administration. The disapproval rating rose to the 50% to 60% range. Dissatisfaction with economic measures, especially those addressing high prices, was prominently cited as a reason for the decline. The ongoing resignations due to scandals involving political leaders also contributed to the negative sentiment.


Source: NHK


Representative Acting Leader of the National Democratic Party, Seiji Maehara, Leaves Party, Announces Formation of New Party (November 30)

Seiji Maehara, the representative acting leader of the National Democratic Party, submitted his resignation on the 30th and announced the formation of a new party called "Association for the Realization of Free Education." Three former members of the National Democratic Party who also left with Maehara, along with independent legislator Hisashi Tokunaga, make up the five members affiliated with the new party.

Seiji Maehara, currently 61 years old, gained prominence as a hopeful young legislator during the Democratic Party era (1998-2016), even running for party leadership in his 40s. He served as Minister of Land, Infrastructure, Transport and Tourism and Minister of Foreign Affairs during the Democratic Party administration.


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