JAPAN: Income Threshold Tax Review & more – 14th Nov 2024

Konnichiwa from BA! This is the Rorshok Japan Update from the 14th of November twenty twenty-four. A quick summary of what's going down in Japan.

Senior officials from Japan’s ruling and opposition parties agreed on Sunday the 10th that they need to review the 1.03 million yen annual income threshold, equivalent to around 7,000 dollars. In Japan, those who make under 1.03 million yen in a year don’t have to pay income tax so some people choose to work fewer hours so that they earn under the threshold and avoid paying the duty. However, the government wants to encourage people to work more, and thinks that they can do this by raising the income threshold.

The Democratic Party for the People suggested raising the threshold to 1.78 million yen, which is 11,000 dollars. Itsunori Onodera of the ruling Liberal Democratic Party said the government might lose up to fifty-one billion dollars in tax revenue if they raise the threshold that high, but the Komeito party policy head said they could find another revenue source.

In other news, a fire broke out on the Maritime Self-Defense Force minesweeper ship on Sunday the 10th near Oshima island, just a few miles off the northwestern coast of Fukuoka Prefecture. The ship had forty-five members total on board. The fire injured one crew member and left one missing. The other forty-three members safely evacuated to other boats. The injured crew member went to the hospital, but thankfully, his injuries were minor. Rescue teams are still searching for the missing crew member.

The fire started in the engine room. Despite the firefighters’ efforts, it kept burning until the ship capsized the next day on Monday the 11th. The fire was difficult to put out because minesweeper ships are all made of wood. They are designed this way since some sea mines have magnetic triggers and could detonate if a metal ship gets close.

The Maritime Staff Office plans to set up a committee to investigate what caused the fire.

In an update to a story from last week’s show, the Diet's Lower House held a runoff vote on Monday the 11th to formally choose the prime minister now that no political party holds a 233-seat majority. The Lower House re-elected Shigeru Ishiba.

In a speech, Ishiba talked about working together with other political parties and raising wages, which have so far been outpaced by inflation.

Just as the Diet confirmed Ishida as Japan's leader, the Komeito party, the junior coalition partner of the Liberal Democratic Party, formally endorsed Tetsuo Saito, the land minister, as its new leader during a party convention on Saturday the 9th. Saito replaced Keiichi Ishii, who stepped down after losing his seat in the general election on the 27th of October.

Next up, in the Fukui Prefecture, the Nuclear Regulation Authority or NRA said the Tsuruga Number Two reactor failed its safety review and wouldn’t be allowed to restart, marking the first rejection under heightened safety standards after the twenty eleven Fukushima disaster.

The NRA made this decision after more than eight years of safety reviews, which took so long because of many data issues and operator errors. The officials said that there were too many safety risks from potentially active fault lines beneath the reactor.

The government hopes to use nuclear energy to meet its goal of carbon neutrality by twenty fifty, but they said that safety is more important. Japan Atomic Power Company, Tsuruga Number Two’s operator, said they hope to find proof that the fault lines are inactive so they can get approval to restart the reactor, which has been offline since twenty eleven.

In business news, major Japanese carmakers are worried about potential US policy changes under Donald Trump, the new president. This worry came up after Trump proposed a 200 percent tariff on vehicles manufactured in Mexico. Japanese carmakers like Honda and Nissan currently rely on their Mexican factories for exports to the US, which are tariff-free thanks to a US-Mexico trade agreement. Trump’s proposal could have a huge impact on them.

Every year, Honda produces 200,000 cars in Mexico and exports eighty percent to the US. Twenty-four percent of Nissan’s 900,000 vehicle sales in twenty twenty-three came from Mexico.

However, Trump also said he might implement some electric vehicle incentives, which could benefit Japan’s strong hybrid car market, so it’s not clear yet whether future US policies will hurt or help Japan’s auto industry.

In the retail industry, Ito-Kyogo, a company linked to Seven and i Holdings’ supermarket chain, recently sent a buyout proposal to Seven and i. Ito-Kyogo, which already owns eight percent of Seven and i’s shares, hopes to counter takeover bids from Alimentation Couche-Tard, the Canadian convenience store operator, which last month raised its offer to over forty-five billion dollars.

Seven and i’s market is worth around six trillion yen, which is thirty-nine billion dollars. The company said that they formed a special committee of external directors to review all of their options and figure out the best choice for all of their shareholders.

Fishing operations at Wajima port in Ishikawa Prefecture, central Japan, have mostly returned to normal, with thirty-two fishermen coming into port on Friday the 8th with the first snow crab haul of the season. Wajima’s fishing had been suspended for a long time because the Noto earthquake on the 1st of January had uplifted the seabed and damaged quay walls, stranding around 200 boats.

During the ten months when local fishermen couldn’t go out in their boats, they took on part-time work in civil engineering and recycling nets to support themselves. The city finished temporary restoration of the port’s unloading area in late October, but there still isn’t a lot of space for boats and the huge shift in land caused by the earthquake means that it will still take some time before fishing operations are back to normal.

However, rice prices have not returned to normal since the rice shortage in August, with prices up by eighty percent compared to last year. To address this problem, on Thursday the 14th, the company Seiyu announced it would start selling rice from Taiwan.

This move is unusual for a major supermarket, but Taiwanese rice is twenty percent cheaper than domestic rice, selling at eighteen dollars for a five-kilogram or eleven-pound bag. It also has a similar taste and texture to domestic rice. Seiyu will sell the rice in 138 stores in the Kanto region in central Japan.

In sports, Shohei Ohtani, a Major League baseball star, won his third Silver Slugger Award in the designated hitter category on Tuesday the 12th. Every year, the National League in the US gives out this award for the best hitter at each position. This makes Ohtani the second Japanese player to win the Silver Slugger Award three times, with the first player being Ichiro Suzuki.

And to close this edition, Kiyomizu-dera, one of Kyoto’s most famous temples, located in western Japan, will be holding an Autumn Illumination event starting next week on the 18th and lasting until the 30th of November. During the Autumn Illumination, the temple will string lights in the trees so visitors can see the fall foliage lit up at night.

The easiest way to reach the temple is by bus. The closest bus stops are Gojozaka and Kiyomizumichi. From there, it’s a ten to twelve-minute walk to the temple.

To know more, check out the temple’s official website with the link in the show notes!

Aaand that’s it for this week! Thank you for joining us!

Thanks for sticking around for this episode of the Rorshok Japan update! If you’ve got questions, thoughts, or just want to say hi, reach out at info@rorshok.com. Don’t forget to hit subscribe on your favorite podcast app!

Mata Ne!