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Domestic Politics Local Elections April saw the holding of the fifteenth quadrennial unified local elections in Japan. On The 13th voting for ten prefectural governorships, forty- seven prefectural assemblies and a range of mayoral and local assembly seats was held. On the 28th elections for mayor were held in over three hundred cities and fourteen of Tokyo's twenty three districts. Over ten thousand municipal assembly seats were also contested, as were three lower house and one upper house by-elections. Most attention focused on the gubernatorial election in the nations capital where the controversial incumbent, Ishihara Shintaro, was seeking a second four-year term. Mr. Ishihara easily beat off his challengers, scoring a landslide victory with over 70% of the vote. Turn out was 45%. Mr. Ishihara, previously a diet member as well as a prize-winning author, had campaigned on a platform of support for small business and environmental action to address the issue of air pollution. After his victory he said that he would re-double his aggressive efforts to stimulate Tokyo's economy by creating a bank catering to small and medium sized enterprises. The bank, to be backed by metropolitan government money, would lend to those business that were having difficulty in securing affordable credit from commercial lenders. Mr. Ishihara also raised the idea of building a large casino complex in the Odaiba district, tax revenues from which would assist the city government's finances. 41% of Ishihara voters said that they supported the Governor because he had the ability to implement policies, 15% said it was because he was best able to come up with new policies. A reported 60% of those who voted for him said they hoped he would one day become Prime Minister. Mr. Ishihara, who said he intended to be'more radical than before' in his second term, brushed off questions about a return to national politics but did not explicitly rule out a return to the diet. Despite having entered his eighth decade Mr. Ishihara is widely thought to harbour Prime Ministerial ambitions. His immediate priority as governor however might include taking the government of the present Prime Minister to court over its failure to control air pollution. Of the two thousand six hundred and thirty four seats being contested the LDP won one thousand three hundred and nine, up slightly from four years ago. New Komeito, a member of the ruling coalition, also increased its number of seats as did the opposition DPJ and Liberal Party. The Japan Communist Party and the Social Democratic Party both lost ground. Turn out was 52.5% with thirty-five of forty-seven prefectures reporting record low numbers of voters. Falling turnout also marked the second round of voting on the 28th. In a clear example of the waning of national party influence in local assemblies a record high of over six thousand seven hundred independents won seats. LDP backed candidates won only eight hundred and fourteen seats, handing the party its lowest total ever. There was better news in the capital however; thirteen of the fourteen mayoral elections held in Tokyo returned LDP backed candidates. In the by elections the candidates of the ruling coalition scored easy victories in rural seats in Ibaraki and Yamanashi. The opposition DPJ did not field candidates in these races showing the weakness of its appeal to countryside voters. In the lower house Tokyo Ward 6 election however its candidate Komiyama Yoko beat off the LDP's Ochi Michio to retain the seat for the opposition. The by-election was necessitated by the murder of DPJ incumbent Ishii Koki by a disturbed, self-proclaimed rightist in October 2002. In the three upper house by-elections candidates belonging to, or supported by the ruling coalition all won easy victories. Business and Finance Company Results Company results reported in April showed mixed fortunes for different Japanese sectors. Difficult conditions in the international market combined with continued sluggish domestic demand harmed many firms, while the continued slide in share prices meant big losses for others. The most high profile casualty of the strained global economy was Sony Corp. Despite posting net profits of ¥115.52 billion (up 750% on FY01) the company's share price declined steeply and its debt rating was placed under review by Moody's credit agency. The cause of Sony's problems is a disastrous 4th quarter loss three times the expectation of analysts. Many observers fear that the failure of the core electronics division to respond to cost cutting and restructuring will drag down Sony's profitability next year. Revenue in the flagship division slipped 6.5% with particular weakness in the personal computer market where the Vaio PC has seen a slump in sales. Despite this Sony's performance in FY02 was impressive. The motion picture division saw sales rise 26% while the games division saw cost cutting measures lead to a rise in operating profit despite a fall in sales of almost 5%. Many electronics firms have joined with Sony Corp. in predicting a tough operating environment for their firms in FY2003. Company Results FY02 Matsushita Electric Industrial Co. Hitachi Ltd Mitsubishi Electric Co. Honda Motor Co. Mazda Motor Co. Toyota Motor Co. Nissan Motor Co. Softbank Ito Yokado Co. Aeon Co. Takashimaya Co. Other Issues APRIL 23 Japan's trade surplus rose for the first time in four years in FY2002, rising 36.6% compared to last year. The value of exports rose by 8.5% on the back of strong sales of automobiles and semiconductors, while the increase in the price of oil was largely responsible for the 3.7% rise in the value of imports. Japan's trade surplus with the rest of Asia was calculated at ¥4.59 trillion. Japan continues to run a trade deficit with China, which over the financial year absorbed ¥7.96 trillion worth of Japanese exports. This made China Japan's largest market for exported goods. The US was second with ¥7.07 trillion. APRIL 26 The Nuclear and Industrial Safety Agency gave permission for Tokyo Electric Power Co. to re-open the No.6 reactor of its Kashiwazaki-Kariwa power plant. The plant was one of the seventeen operated by TEPCO that was shut down to allow safety checks to be undertaken. The reactor was taken off line in January following revelations that TEPCO had routinely falsified documents dealing with safety issues for years. Executives have been pushing for the quick re-opening of the other nuclear plants warning of the possibility of blackouts in Tokyo. According to figures published by the firm, oil and gas fired power stations currently on-line can only supply 55,000kw of the expected 64,000kw of demand expected in the peak summer season.. Foreign Politics Severe Acute Respiratory Syndrome Although no cases of SARS have been officially confirmed in Japan, the spread of the highly contagious disease through South East Asia has effected Japanese businesses and disrupted travel to and from the region. Mainland China and Hong Kong, two of the worst hit areas, are the second and fourth most popular destinations respectively for Japanese going abroad, with a combined 3.7 million visitors in 2001. The damage done by the disease to the travel and airline industry has been extensive. Several Japanese travel agencies cancelled package tours to the area and passenger traffic through Narita Airport, the nation's busiest, has declined by a third. The airport operator forecast the fall would cost it about ¥1.5bn in April. Already suffering from the downturn in air travel following the September 11 attacks, the slowing global economy and the war in Iraq, airlines are now facing further pressure. JAL, Singapore Airlines, Cathay Pacific and Hong Kong's Dragon Air have all cut flights from Japan to affected areas. Demand dropped sharply as fear of the disease grew following its spread. One flight from Kansai International Airport to Hong Kong early in the month departed with 90% of the seats unoccupied. Transport Minister Ogi Chikage was reportedly considering emergency government loans to airlines and travel companies hardest hit by the outbreak. Japanese authorities have reacted to the potential threat that SARS poses, but not without some confusion. Some days after the World Health Organization had cautioned about traveling to affected areas the Ministry of Foreign Affairs issued an advisory urging people to postpone non-essential trips to Hong Kong and the next-door Guangdong Province. When criticized over the delay in issuing such a warning Senior Vice Foreign Motegi suggested that it had been caused by the slow pace of decision making within the Health, Labour and Welfare Ministry regarding the seriousness of the outbreak in those areas. The Health ministry advisory council also recommended the government to declare SARS'an infectious disease', which under the Infectious Disease Law, would allow medical personnel to order the forcible hospitalization of suspected sufferers. Government sources also said that prefectural authorities had been requested to outline what steps they had taken to deal with a potential outbreak, and that the number of hospitals and specialist medical facilities designated to handle highly contagious diseases had been increased. Screening facilities at major airports were also improved. Narita deployed sensors that detect elevated body heat, a symptom of infection. An American Airlines flight from Japan to San Jose was temporarily quarantined when passengers began complaining of symptoms consistent with the disease. It was later determined that the cause was not connected to the SARS virus. So far two Japanese nationals, in Beijing and Seoul, have been hospitalized over fears that they have contracted the illness. The estimated three thousand Japanese students studying in Beijing were also advised by the Japanese embassy there to leave. The Chinese capital is one of the worst hit areas. Efforts to keep the disease out may have so far spared Japan the kind of difficulties that Toronto, Canada has undergone but Japanese nationals and businesses in affected areas of China have suffered. Foreign Ministry figures suggest that over thirty thousand Japanese are living and working in Hong Kong and Guangdong. Guangdong is home to the Chinese operations of over a thousand Japanese firms, who's investments in FY2001 totaled ¥80.52bn. While most companies have not recalled staff from the area, business trips have declined, and production in some factories has been increased to offset losses that might be incurred should the plants be shut down in the event of an intensification of the disease. Japanese assets in China are covered by overseas investment insurance as part of a state backed scheme, but this is reported not to cover losses sustained due to the outbreaks of epidemics such as typhus. North Korea The issues of North Korea's nuclear and missile development program and their abduction of Japanese nationals continue to trouble relations between Tokyo and Pyongyang. Early in the month there was confusion when Chief Cabinet Secretary Fukuda Yasuo said he had obtained intelligence suggesting that North Korea had fired a Silkworm, anti-ship missile into the Sea of Japan. Seoul however denied that such an act had taken place and Fukuda later admitted that he had no definite confirmation of the launch. The North had carried out similar launches in February and March. Pyongyang had been making increasingly provocative moves since the start of this year, largely interpreted as attempts to force Washington to agree to its demand for direct talks regarding a non aggression treaty. The Bush administration had insisted on multilateral talks focusing primarily on the nuclear issue. The latest dispute between the two sides erupted in October when the US suspended fuel shipments to the North over its admission that it had violated the 1994 agreement by continuing with a covert nuclear weapons program. The North responded by announcing it was pulling out of the Non-Proliferation Treaty. On the 10th of April the three-month waiting period for the North's withdrawal expired. Chief Cabinet Secretary Fukuda said that he did not believe the North had fulfilled all the requirements for withdrawal and that the treaty was therefore still binding. When the two sides met as scheduled at the Diaoyutai State Guest House US Assistant Secretary of State James Kelly urged to the Koreans to clarify their position on reprocessing. It was also reported by the Washington Post that the North Korean chief negotiator Li Gun told Mr. Kelly in a corridor outside the meeting room that the North already possessed nuclear weapons and that it was'... up to you whether we do a physical demonstration or transfer them.' The comments were not recorded and so no independent confirmation of them was possible. Both South Korean and Japanese officials stressed caution and refused to accept Li Gun's remarks at face value. Japanese Defense Agency chief Ishiba Shigeru said'We have to confirm the facts: whether this claim is true or whether it is part of a policy of brinkmanship'. North Korea has in the past been ambiguous about its possession of nuclear weapons, making conflicting or unclear statements. The threat posed by North Korea, which on the 9th reminded Japan that it was within striking of its missiles, has been a factor in the budget planning currently being undertaken by the Defense Agency. Continued funding for missile defense research is expected to be one of the requests made by Mr. Ishiba the Director of the JDA. Earlier in the month he met with US Assistant Secretary for Defense JD Crouch, who urged Japan to adopt a plan for high altitude missile defense that has been a subject of technical co-operation between the two countries since 1998. April 14th marked the six-month anniversary of the return of the five Japanese abducted by North Korea. Enormous media interest was generated by their return, and some commentators in Japan suggest that they have become tools for a right-wing vilification campaign of North Korea. Four of the abductees, Kaoru and Yukiko Hasuike, and Yasushi and Fukie Chimura, began part-time work in local government offices in their home prefectures this month. The fifth, Soga Hitomi has been volunteering as a nurse. The children of the Chimura's are still in North Korea, as are the children of Mrs. Soga, whose husband is a former American serviceman. On the day of the half year anniversary Mrs Soga read a prepared statement saying that her'...mind is filled only with concern about my family over there'. She also expressed the hope that in dealing with the abduction issue the Japanese government'...will not just speak words but take visible action'. Pyongyang has accused Tokyo of deliberately preventing a reunion from taking place. KCNA said that Tokyo's alleged refusal to let the abductees return to Japan was'...arousing censure and denunciation from the global community'. Sharp disagreements have emerged between Hasuike Toru, brother of the abducted Hasuike Kaoru, and Foreign Minister Kawaguchi over the governments handling of the re-union issue. He accused her of making'reckless' remarks that suggested she was not really concerned with the matter. The Foreign Minister had suggested that'history' was responsible for the continued separation of the families. The campaign to generate foreign interest in the abductions, which supporters have begun referring to as acts of terrorism, saw the relatives of several abductees alleged to have died in North Korea visit Los Angeles. During the time they spent there, meeting with members of the Japanese-American community, the United Nations Human Rights Commission in Geneva passed a resolution criticizing Pyongyang's role in the abductions and calling for full resolution of the outstanding issues. The families of other abduction victims alleged to have perished in the North flew to Geneva shortly after the resolution was passed to give evidence to the Commission's working group on Enforced or Involuntary Disappearances. Other Issues Iraq APRIL 10-12 Foreign Minister Kawaguchi Yoriko visited Europe to discuss Iraqi reconstruction and the North Korean nuclear issue with the foreign ministers of the UK, France and Germany. APRIL 10 Kan Naoto, President of the DPJ, criticized the government's plans to send Japanese civilian staff to work alongside officials of the US Office of Reconstruction and Humanitarian Affairs (OHRA). Mr. Kan said '...conceptually, it appears to be impossible for Japanese government officials to be part of the body'. OHRA is run by US Department of Defense officials. APRIL 16 An unnamed senior member of the ruling coalition said that the government expected to submit bills dealing with the dispatch of SDF staff to Iraq to the Diet in June. Foreign Ministry sources have said that any SDF involvement in Iraq would be in the fields of non-military co-operation such as providing logistic support to military personnel charged with keeping public order. APRIL 25 METI officials announced that Hisanori Nei, head of the Petroleum Refining and Reserve Division of the Natural Resources and Energy Agency and an engineer with experience in the Middle East, would travel to Iraq to work alongside OHRA. APRIL 26-MAY 3 Prime Minister Koizumi visited Britain, Spain, France Germany and Greece to discuss international co-operation in re-building Iraq. He also raised the issue of North Koreas remarks over its possession of nuclear weapons at talks held with the US and China in Beijing.
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