- Keidanren Picks Next Chairman
- Choice of Separate Surnames for Married Couples
- Acquisition of U.S. Steel by Nippon Steel
- Monetary Policy
Keidanren Picks Next Chairman
(In response to a question regarding expectations toward Nippon Life Insurance Co. Chairman Yoshinobu Tsutsui, the candidate selected during a January 14 meeting of Keidanren's Chairman and Vice Chairs to serve as the business lobby's next chairman) Amid the mountain of challenges we face both domestically and worldwide, difficulties still characterize the political situation in Japan, where we now have a minority government in power. Our hopes toward Mr. Tsutsui are that he will apply his societally oriented perspective to help Japan achieve a sustained cycle of growth with the balanced sharing of wealth and build a sustainable society rooted in justice and impartiality. We anticipate that he will demonstrate strong leadership as a representative of the business community.
(In response to a suggestion implying the appointment of a chairman from the financial sector—an investment-restricted industry—might make it harder for Keidanren to be straightforward in presenting its demands and requests to the government) Keidanren chairmen are expected to put behind all vested interests in the individual industries or sectors they hail from and lobby with sound reasoning for the advancement of the Japanese economy as a whole and improved living standards for all citizens. Accordingly, having a career background in an investment-restricted industry must not prevent them from speaking their mind with the government, and we do not anticipate any such issues of this nature with Mr. Tsutsui at the helm. Precisely because he hails from a restricted industry, to date, Mr. Tsutsui likely has already amassed a record of extensive involvement in political and government affairs. He has been entrusted to serve as my successor on the expectation he will be able to fully harness that experience and appropriately lobby the government.
(In response to a suggestion that Mr. Tsutsui might not be suited for the Keidanren chairman's role in promoting stronger corporate governance, given his background with Nippon Life Insurance, a mutual insurance company that remains unlisted) I am not worried about any influences arising from differences in corporate format. To the contrary, I think there is a major advantage in having the ability to impartially consider a broad diversity of business sectors from a long-range perspective. Mr. Tsutsui has been engaged as the top executive for one of Japan's leading institutional investors, and I want to see him demonstrate leadership based on the wealth of experience he has established to date.
(In response to a question regarding Mr. Tsutsui's expected appointment as Keidanren's next chairman following his retirement as chairman of Nippon Life) When appointed, many of Keidanren's past chairmen were still actively employed as corporate chairs or CEOs, but some immediately stepped back from the front lines of corporate management once they assumed the reins at Keidanren. What's important is not their title or position, but their experience and knowledge in leading their company or industry as a top executive. In that respect, we have no concerns whatsoever about Mr. Tsutsui, as he has already built a long career both as the president and chairman of Nippon Life. Moreover, as an organization that operates in the interest not only of the corporate community but Japanese society as a whole, Keidanren has chosen Mr. Tsutsui based on the value we place on personal character and acumen, in addition to experience and knowledge.
(In response to a question about Keidanren's decision to appoint a new chairman from outside the manufacturing sector) The manufacturing sector has created many jobs and also generated innovations through research and development, and it will continue to be an extremely important sector within Japanese industry.
However, the challenges Japan faces now extend beyond industry and across a range of societal issues, including weakened fiscal discipline, widening and entrenched levels of inequality as well as its reproduction, the declining birthrate, and environmental degradation. Taking these matters into account, we selected a candidate without being too particular about whether they should be from the manufacturing community or some other sector.
Choice of Separate Surnames for Married Couples
(In response to a question seeking the Chairman's views on comments made during an informal meeting on January 14 by Ms. Junko Mihara, Minister in Charge of Women's Empowerment and Minister of State for Special Missions, regarding a framework allowing a choice of separate surnames for married couples, and the Chairman's expectations toward the Ishiba administration) Minister Mihara's comments were more in-depth and forward-looking than the opinions expressed on this matter by government officials so far. My impression is that they echoed the strong interest in and hopes for the adoption of this framework by various segments of society.
The framework itself would not mandate separate names for married couples; rather, it would be aimed only at allowing more choice. The Japanese public also presumably desires a full discussion leading to the eventual adoption of such a framework. I would like to see the current regular Diet session engage in a constructive debate on this matter.
Acquisition of U.S. Steel by Nippon Steel
(In response to a question regarding recent developments surrounding Nippon Steel's plans to acquire United States Steel) From various standpoints, including that of economic security, the United States is a nation that has sought to build its supply chains together with other nations that value free and open trade and investment. Although the acquisition plan in question makes economic sense for the US, it is unclear why US President Biden issued the order to block it. Up to now, the US has maintained and championed a free and open environment for investment, and within that climate, Japan has become the top source of foreign direct investment in the US by value. Moreover, Japanese companies are ranked second worldwide in terms of the number of jobs they have created in the US, and as such, have made enormous contributions to the US economy. Given this context and perspectives on the path Japan's dealings with the US might take going forward, this issue with the U.S. Steel acquisition is a matter of serious concern.
Monetary Policy
(In response to a question regarding remarks made by Bank of Japan Deputy Governor Ryozo Himino to the effect that the BOJ's Policy Board would want to conduct discussions and decide whether to raise interest rates at its next meeting [on January 23–24]) The rate of price inflation in Japan has reached a sustained level of at least 2%. Normally, matters of monetary policy are considered with attention to price trends. Although I am not aware of the details of the deputy governor's comments, Japan is currently the only G7 member with negative real interest rates, which suggests it should want to normalize monetary policy as soon as it can.
(In response to a question about the neutral interest rate level in Japan and the BOJ's monetary policy) Opinions are varied on what the neutral interest rate level should be in Japan. As underlined by the results of Keidanren's questionnaire survey on interest rates (released on December 17), most respondent member-companies cited a range of "over 0% to 1 percent" as the rate level they would want to see over the coming three to five years, while a level of "over 1% to 2%" was the second most-frequent choice.
In 2024, Japan's GDP topped 600 trillion yen for the first time; domestic capital investments climbed beyond the 100 trillion yen mark on an annual basis, and employers enacted their largest wage increases in the past three decades, for the second year in a row. Price inflation is now settling in around a level of 2%. The Japanese economy has reached a turning point that will determine whether it is able to fully shake off its deflationary pressures. My impression is that the BOJ wants to steer an appropriate course for monetary policy.