SYDNEY: Australian Prime Minister Anthony Albanese and his Japanese counterpart Fumio Kishida agreed on Saturday (Oct 22) to strengthen security ties between the two US allies amid China’s push for greater influence in the Asia-Pacific region.

At the annual Australia-Japan Leaders’ Meeting, held in the Western Australia capital Perth, the two signed a security cooperation agreement updating a 2007 pact, to respond to a changed regional security environment.

As part of the bolstered security partnership, Albanese said Japan’s military would train and exercise in northern Australia alongside Australian Defence Force personnel.

In their fourth summit since Albanese took office in May, they said the agreement would serve “as a compass” for security cooperation for the next decade. They agreed to consult and study responses to emergencies that could affect regional security.

Albanese and Kishida also discussed climate change, expressing support for a regional transition to net zero carbon emissions and boosting investment in clean energy tech.

“Both our countries are committed to net zero by 2050,” Albanese told reporters after a signing ceremony.

Among those efforts, the leaders agreed to help build secure supply chains between the two nations for “critical minerals, including those that are required for building the green technologies of the future,” Albanese said.

“This partnership will mean we build secure supply chains, promote investment, develop Australia’s domestic sector and make sure Japan’s advanced manufacturers have the critical minerals they need.”

As well as building a framework for secure supply chains, the partnership would promote information sharing and collaboration, including research, investment and commercial arrangements between Japanese and Australian critical minerals projects, the Australian government said in a statement.

Kishida told reporters signing the updated joint security declaration was one of the largest achievements of his visit.

“I expressed my determination that all necessary options for the defence of our country, including the so-called counterstrike capability, would become contemplated and Japan’s defence capability will be fundamentally reinforced in the next five years, which is supported by Anthony,” he said.

The Japanese leader said the two nations had been working to achieve a free and open Indo-Pacific under “an increasingly severe strategic environment”.

“Through this experience, the bonds that tie Japan and Australia together have become much stronger. And our two countries have become the central pillar of cooperation among like-minded countries,” he said.

Australia is a major supplier of iron ore, coal and gas to Japan. Locating the meeting in Perth, 3,700km from the national capital Canberra, was meant to showcase Western Australia’s importance in supplying Japan’s energy needs, including renewable energy. The state is also a key source of beef and wheat to Japan.

Canberra and Tokyo recently bolstered security ties in response to China’s growing military strength in the region. In May, Kishida and Albanese pledged to work toward a new bilateral declaration on security cooperation.

A previous joint declaration outlined security cooperation in areas such as counter-terrorism and North Korea’s missile and nuclear weapons programmes. The two countries in 2014 elevated their relationship to a “Special Strategic Partnership”.

TOKYO: Japan stands ready to take appropriate steps against excess volatility in the foreign exchange market and is watching currency movements with a great sense of urgency, top government spokesman Hirokazu Matsuno said on Thursday (Oct 13).

Japanese authorities stepped into the foreign exchange market last month, selling the dollar and buying the yen for the first time in 24 years. Markets are looking for any clues on whether they will intervene again and the potential timing.

“I won’t comment on day-to-day market moves but we’re keeping close watch with a great sense of urgency,” Matsuno told reporters.

“We will take appropriate steps on excess moves.”

Matsuno declined comment on a statement issued by the Group of Seven financial leaders on Wednesday, in which they reiterated excessive exchange rate moves were undesirable.

The dollar was trading near 147 yen, edging closer to a high of 147.64 recorded in August 1998. Japanese authorities intervened to prop up the yen when it touched 145.90 per dollar.

Currency intervention is costly and could fail to influence the yen’s value in the huge global foreign exchange market. Investors also doubt the efficacy of intervention given that the dollar’s strength has been driven by interest rate differentials due to widely divergent US and Japanese monetary policies.

Minutes from the Federal Reserve’s policy meeting last month showed that officials agreed they needed to raise interest rates to a more restrictive level to meet their goal of lowering “broad-based and unacceptably high” inflation.

Japanese authorities spent 2.8 trillion yen (US$19.2 billion) to intervene in the foreign exchange market to buy yen last month.

“WE DIDN’T WANT PEOPLE TO FORGET GHIBLI’S WORKS”

Governor Hideaki Omura on Wednesday said that it had taken “five years and five months” to complete the park, praising Studio Ghibli as “the summit” of Japanese culture.

Studio Ghibli was founded in 1985 by animators Isao Takahata and Hayao Miyazaki, and has captivated fans around the world with works blending nostalgia, courage, greed and interaction with the natural world.

Miyazaki’s son Goro told reporters on Wednesday that the park was originally conceived as a way to leave Studio Ghibli’s works to future generations, in anticipation of his father’s expected retirement.

“We didn’t want people to forget Ghibli’s works,” he said.

“But we were betrayed again,” he added with a laugh. “He’s making a feature film now!”

He said the theme park had been designed to have “minimal impact” on surrounding nature, with instructions that “trees shouldn’t be cut down or changes made to the environment”.

DEMAND SOARING

In Japan, tourists will find a country that is still adhering to many of the health guidelines that helped it to keep pandemic deaths to around 45,500, lower than many other developed economies.

Masks are ubiquitous, and though not mandated by law, parliament is set to pass legislation allowing hotels to deny service to customers who refuse to wear one or observe other health rules.

Masks are worn not only indoors and on public transport, but even outdoors, despite the government saying they are not necessary outside in uncrowded settings.

Hand sanitiser is placed at the entrance of most businesses, while plastic dividers are also often used in restaurants.

Another major change for tourists will be the weakness of the yen, which is hovering around 145 to the dollar, a level not seen for two decades.

The government has already had to intervene once to prop up the currency, and Prime Minister Fumio Kishida cited the yen’s weakness as a factor he hoped would draw tourists when he announced the reopening.

There is certainly no shortage of demand, according to travel agents.

Since the September announcement of the planned reopening, “we’ve been absolutely drowning, we don’t have enough time to deal with all the requests”, said Antoine Chanthavong, of Paris-based travel agency Destination Japan.

Still, for now at least, tickets are not coming cheap, with fuel prices soaring and airlines forced to take circuitous routes to avoid Russian airspace.

And for all the rebound in demand, there is little expectation that tourist numbers will soon reach their 2019 levels.

Before the pandemic, travellers from Hong Kong and China made up 37 per cent of all foreign visitors to Japan, and 44 per cent of tourism income.

But tough COVID-19 restrictions in China make it unlikely visitors from there will be flocking back to Japan anytime soon.

South Korean public support for indigenous nuclearisation has been steady, and growing, for more than a decade. This has opened policy space for nuclearisation advocates to make the case for nukes at the elite level.

A persistent Track II discourse among nongovernmental national security analysts will, in turn, pressure a formal, Track I response. Already in 2017, the then-leader of the main opposition party publicly suggested South Korea needed nuclear weapons.

CHINESE AND NORTH KOREAN PRESSURE FORCING MORE RADICAL CONSIDERATIONS

Polling regularly returns support for this option for the reasons one would expect – China and North Korea.

China is a large, powerful state on Seoul’s doorstep. It has increasingly tried to bully South Korea, regarding, for example, missile defence or Chinese travellers during the pandemic.

And North Korea, obviously, is an ongoing, arguably existential threat. It is an opaque nuclear weapons state that routinely threatens South Korea and rejects even the most basic arms control regarding its warheads and missiles.

It has fired a flurry of seven missile launches in just over two weeks, with one that flew over Japan in blatant disregard for Japanese sovereignty.

On Monday (Oct 10), North Korean state media said that the exercises involved ballistic missiles with mock nuclear warheads, and were meant to deliver a strong message of war deterrence.

“Even though the enemy continues to talk about dialogue and negotiations, we do not have anything to talk about nor do we feel the need to do so,” KCNA quoted North Korean President Kim Jong Un as saying.

ATTRACTIONS, AIRLINES LOOK FORWARD TO WELCOMING TOURISTS

Abe employs about 50 people and resorted to layoffs after the pandemic struck in 2020. Some Akihabara shops have closed down since then, but he bided his time.

“Hanging on is where power lies,” Abe said. “Now, I am a bit worried about a shortage of workers.”

Retailers in Akihabara and other businesses in Japan that relied heavily on visitors from all over have had a tough couple of years. Major retail chain Laox shuttered its Akihabara store, keeping open only its outlets at Narita airport and in the ancient capital of Kyoto.

The city of Nara, famous for its temples, shrines and sake breweries, is banking on the return of tourists from other parts of Japan along with those from abroad. A pastoral getaway with deer roaming free in parks and glorious autumn foliage, it is a destination recommended for people worried about risks of visiting crowded destinations, said Katsunori Tsuji of Nara Prefecture’s tourism promotion division.

“There are aspects of life that Japanese have preserved over the years in Nara that you can truly sense and enjoy, that spiritual element,” he said.

About 10 years ago, Chinese tourists visiting in huge groups to snag European luxury brands and even high-tech toilet seats bought so much that their purchases were known as “baku-gai” (a combination of the Japanese words for “explosive” and “purchase”).

Some 32 million foreign tourists visited Japan in 2019 before the pandemic. The travel and tourism sector then contributed more than seven per cent to Japan’s economy, according to the World Travel and Tourism Council.

TOKYO: As Japan throws open its doors to visitors this week after more than two years of pandemic isolation, hopes for a tourism boom face tough headwinds amid shuttered shops and a shortage of hospitality workers.

From Tuesday (Oct 11), Japan will reinstate visa-free travel to dozens of countries, ending some of the world’s strictest border controls to slow the spread of COVID-19. Prime Minister Fumio Kishida is counting on tourism to help invigorate the economy and reap some benefits from the yen’s slide to a 24-year low.

Arata Sawa is among those eager for the return of foreign tourists, who previously comprised up to 90 per cent of the guests at his traditional inn.

“I’m hoping and anticipating that a lot of foreigners will come to Japan, just like before COVID-19,” said Sawa, the third-generation owner of the Sawanoya ryokan in Tokyo.

More than half a million visitors have come to Japan so far in 2022, compared with a record 31.8 million in 2019. The government had a goal of 40 million in 2020 timed with the Summer Olympics until both were upended by the coronavirus.

Kishida said last week the government is aiming to attract 5 trillion yen (US$34.5 billion) in annual tourist spending. But that goal may be too ambitious for a sector that has atrophied during the pandemic. Hotel employment slumped 22 per cent between 2019 and 2021, according to government data.

Spending from overseas visitors will reach only 2.1 trillion yen by 2023 and won’t exceed pre-COVID levels until 2025, wrote Nomura Research Institute economist Takahide Kiuchi in a report.

Flag carrier Japan Airlines Co has seen inbound bookings triple since the border easing announcement, president Yuji Akasaka said last week, according to the Nikkei newspaper. Even so, international travel demand won’t fully recover until around 2025, he added.

GHOST TOWN

Narita Airport, Japan’s biggest international airport some 70km from Tokyo, remains eerily quiet, with about half of its 260 shops and restaurants shuttered.

“It’s like half a ghost town,” said 70-year-old Maria Satherley from New Zealand, gesturing at the Terminal 1 departure area.

Satherley, whose son lives in the northern island of Hokkaido, said she would like to return with her granddaughter this winter but probably won’t because the child is too young to be vaccinated, a prerequisite for tourists entering Japan.

“We’re just going to wait till next year,” she said.

Amina Collection Co has shut its three souvenir shops at Narita and is unlikely to reopen them until next spring, said president Sawato Shindo.

The company reallocated staff and supplies from the airport to other locations in its 120-shop chain around Japan as it refocused on domestic tourism during the pandemic.

“I don’t think there’s going to be a sudden return to the pre-pandemic situation,” Shindo said. “Restrictions are still pretty strict compared to other countries.”

Japan still strongly encourages that people wear masks indoors and refrain from loud talking. The Cabinet on Friday approved changing hotel regulations so that they can refuse guests who do not obey infection controls during an outbreak.

Many service workers found better working conditions and wages in other fields over the past two years, so luring them back may be difficult, said a consultant for tourism companies who asked not to be identified.

“The hospitality industry is very infamous for low wages, so if the government values tourism as a key industry, financial support or subsidies are probably needed,” he added.

The Japanese government is starting a domestic travel initiative this month that offers transportation and accommodation discounts, similar to its Go To Travel campaign in 2020 that was cut short following a surge in COVID-19 infections.

TIGHT LABOUR MARKET

Almost 73 per cent of hotels nationwide said they were short of regular workers in August, up from about 27 per cent a year earlier, according to market research firm Teikoku Databank.

In Kawaguchiko, a lake town at the foot of Mt. Fuji, inns had difficulty staffing before the pandemic amid Japan’s tight labour market and they anticipate a similar bottleneck now, said a trade group staffer who asked not to be identified.

That sentiment was echoed by Akihisa Inaba, general manager at the hot spring resort Yokikan in Shizuoka, central Japan, who said short staffing during the summer meant workers had to forego time off.

“Naturally, the labour shortage will become more pronounced when inbound travel returns,” said Inaba. “So, I’m not so sure we can be overjoyed.”

Whether overseas visitors wear face masks and abide by other common infection controls in Japan is another concern. The strict border controls were broadly popular during most of the pandemic, and fears remain about the appearance of new viral variants.

“From the start of the pandemic until now, we’ve had just a few foreign guests,” said Tokyo innkeeper Sawa. “Pretty much all of them wore masks, but I’m really not sure whether the people who visit from here on will do the same.”

“My plan is to kindly ask them to wear a mask while inside the building,” he added. 

Mr Nishida’s new project to set up a separate facility for children exposed to traumatic events became viable after the central government revised the law to step up support for such children until they reach the age of 22.

For a start, Nr Nishida aims to take in six adolescents, mainly from his orphanage, although he is willing to accommodate others who have needs. 

While they provide hot meals, warm beds, and educate the children, orphanages in Japan are not equipped to provide mental health therapy. This is despite orphanages in Japan housing mainly children who are victims of abuse and neglect at home, who often demonstrate signs of traumatic stress. 
Children with a clear need for psychiatric help are admitted to specialised institutes.

Mr Nishida said: “The younger they are, the higher the chances are for them to eventually become self-sufficient. We will try to bring the young hikikomori over here, help them learn how to do chores, then help them go out. It will be hard, but we hope they can mix in society.”

He has enlisted the help of Mr Oshikawa.

But Mr Nishida said without support for families, his new facility may only address the symptoms of the issue.

“I believe the problem is in the family. We should not only care for the children. I believe we need to support each household,” he said. 

According to the Health Ministry, one in 30 people has mental health issues in Japan. One in five will have a mental illness during their lifetime, the Health Ministry added.

In Kitakyushu, Mr Nishida aims to create a network of support with Mr Oshikawa’s expertise.

“Emotional, intellectual, mental disorders tend to run in their parents. I notice a pattern. If the parents have disabilities, illnesses, it’s often the case that their children have them,” he said.

Watch CNA Leadership Summit live on 10 October 2022 from 1.30pm SGT via cna.asia/leadership-summit.

TOKYO: Japan will take “unprecedented” measures to curb rising electricity bills for households and businesses as a weak yen fans inflation and global recession fears pose big risks to the economy, Prime Minister Fumio Kishida said on Wednesday (Oct 5).

The government will compile another economic stimulus plan by the end of October, including a rare measure to directly ease the rise of electricity prices that are subject to abrupt price flare-ups, Kishida told parliament, without going into detail.

In the past, the government has paid subsidies to fuel wholesalers to keep gasoline and kerosene prices low, but now policymakers are floating new ideas such as providing cash payouts and giving subsidies to utility firms to curb power price hikes.

The government is also considering a subsidy scheme for consumer and industrial gas in the upcoming package, which would further increase the size of the fiscal layout involved, Kyodo reported on Wednesday.

Faced with falling public approval rates, Kishida’s ruling party is considering a fresh spending package worth at least US$100 billion to address inflation.

“Rising energy and food prices due to Russia’s invasion of Ukraine, coupled with a weak yen, and the fears of a global economic slowdown are big risk factors to Japan’s economy,” Kishida said.

Consumer prices in Tokyo rose in September at the fastest pace since 2014, government data showed on Monday, highlighting the growing burden for households from the yen’s plunge to 24-year-lows, which is adding to already rising import costs.

To ease the pain of cost-push inflation for everything from food to energy, Japanese policymakers are urging firms to raise wages, which is essential to kick-start a sustainable growth cycle of higher wages, greater consumer spending and business investment.

Four private-sector advisers on Kishida’s top economic advisory panel have urged the government to implement policies that would help achieve real economic growth of 2 per cent to 2.5 per cent, in order to make it easier for big firms to implement the 2.07 per cent wage hikes agreed by management and labour unions earlier this year.

Analysts polled by Reuters see the economy expanding 1.9 per cent this fiscal year but slowing in 2023 as global demand softens.

The advisers said the government should make wage hikes a condition for small firms to receive government support. They also said smaller firms, many of whom are contractors in supply chains, should pass on costs to their bigger clients.

With an “unprecedentedly severe fiscal situation” due to repeated extra budgets in recent years, fiscal measures must target those who need aid the most and aim for private sector-led growth, Finance Minister Shunichi Suzuki told the Wednesday panel, according to a government official.

Kishida said earlier in parliament that it is important for Japan to link the weak yen to economic revitalisation through a recovery of inbound tourism, bringing companies back to the country and expanding agricultural exports, Kishida said.

Kishida said monetary policy was a matter for the Bank of Japan when asked by an opposition lawmaker about the BOJ sticking to its ultra-easy policy, which has helped fuel the yen’s decline, while other major central banks raise interest rates. He declined to comment on the foreign exchange rate outlook.

SEOUL/TOKYO: North Korea fired a ballistic missile over Japan on Tuesday (Oct 4), prompting a warning for residents to take cover and a temporary suspension of train operations in northern Japan.

South Korea’s Joint Chiefs of Staff and the Japanese coast guard reported on the missile test, which was launched off North Korea’s east coast.

The Japanese government warned citizens to take cover as the missile appeared to have flown over and past its territory before falling into the Pacific ocean. But it said it did not use any defence measures to destroy the missile.

TV Asahi, citing an unnamed government source, said North Korea might have fired an intercontinental ballistic missile and it fell into the sea about 3,000km from Japan.

The latest launch was Pyongyang’s fifth in 10 days, amid military muscle-flexing by the United States and South Korea, which conducted trilateral anti-submarine exercises last week with Japanese naval forces.

South Korea staged its own show of advanced weaponry on Saturday to mark its Armed Forces Day, including multiple rocket launchers, ballistic missiles, main battle tanks, drones and F-35 fighters.

The test prompted East Japan Railway Co to suspend its train operations in the northern regions, Japanese broadcaster NHK reported.

The North has completed preparations for a nuclear test, which it might look to undertake sometime between China’s Communist Party Congress this month and US mid-term elections in November, South Korean lawmakers said last week.