- The Situation in the Middle East
- Tokyo Metropolitan Assembly Elections
- Upper House Election
- Political Donations from Companies and Business Organizations
- Japan-US Tariff Negotiations
- Acquisition of US Steel by Nippon Steel
- SDGs
- General Meetings of Shareholders
- Nissan Motor Corporation
- Fuji Television
The Situation in the Middle East
(In response to a query seeking the Chairman's thoughts on the still uncertain outlook for the situation in the Middle East, despite the ceasefire recently announced between Israel and Iran, and the likely impact on Japanese firms and the economy) Looking ahead, I firmly hope to see all parties involved move to implement the terms and procedures for the ceasefire agreement. In that process, it will also be necessary to focus on remaining flashpoints across the Middle East and whether they will have an impact on other regions. Japan depends on imports from the Middle East for over 90% of its crude oil, and developments there can have an extremely huge impact on Japan's corporations as well as its economy. We will need to watch and see how the effects of the ceasefire play out not only for the stable supply of energy, but also for supply chains and human exchange. It will be needed to respond to situations in close cooperation among companies and the government.
(In response to a question regarding Keidanren's position in the unlikely event the Strait of Hormuz is closed) Although Iran's Parliament has approved the closure of the Strait of Hormuz, we will want to watch and see if and how that scenario unfolds. Working through its partnership with the US, it will be important for Japan to make every possible diplomatic effort to ensure such a development is avoided.
Tokyo Metropolitan Assembly Elections
(In response to a question seeking the Chairman's thoughts on the results of the Tokyo Metropolitan Assembly elections held June 23, and the impact the issue of politics and money likely had on the election outcome) I view the election outcome as an expression of the will of Tokyo's citizens. In this election Tomin First no Kai , which is a powerful regional party, carefully appealed to voters with its policies and won growing support in return, resulting in becoming the largest party. In contrast, the Liberal Democratic Party lost a considerable share of seats in the assembly, and the issue of political funds has been cited as one of the factors behind that setback. I want the LDP to heed this election outcome and work in earnest to manage the government.
Upper House Election
(In response to a question regarding key points for the upcoming Upper House election on July 20) I view that event as an important election with a major influence on the nation's political affairs. In this age of uncertainty on the international front, I look forward to seeing the political parties and candidates move forward with debate on matters of policy. All of the political parties have championed campaign pledges aimed at addressing a wide array of issues, and I know they are injecting their energy into those commitments. However, from the perspective of the national electorate, measures to battle rising prices count as the most pressing issue. I venture that reducing the consumption tax and issuing cash payouts will be among the main issues up for debate.
On the other hand, given that the term of office for Upper House lawmakers is a relatively long six years, I look forward to seeing them debate medium- and long-term issues, as well. For example, I want them to deliberate on measures aimed at boosting productivity as a foundation for wage increases and reforms that will lead to an increase in the economy's potential growth rate, as well as social security reforms and improved approaches to fiscal management.
Political Donations from Companies and Business Organizations
(In response to a request for the Chairman's perspective on the failure of the current ordinary Diet session to reach a conclusion on revisions to the legal framework for political donations from private companies and business organizations) I want the Diet to continue its debate on this matter because it is an important discussion about sharing the costs required to sustain democracy and ensuring the transparency of political funding. Keidanren maintains its stance that political donations are an important means by which private firms fulfill their societal role because sustaining a democracy properly comes with considerable costs.
(In response to a question regarding Keidanren's policy evaluations of the Liberal Democratic Party and other leading political parties, and Keidanren's call for political donations) After assessing the policy positions of the major parties on issues like innovation or allowing a choice of separate surnames for married couples, and in keeping with a comprehensive assessment that reflects the perspective of upholding a system based on the general framework of a parliamentary democracy, calls for political donations will be made in an appropriate manner.
Japan-US Tariff Negotiations
(In response to a question regarding the stance the Japanese government should take as the July 9 expiration of the pause on additional US reciprocal tariffs draws near) Japan and the US appear to be no closer to reaching a trade deal, and I have the feeling the two sides still differ in their perceptions of the issues at stake. On the other hand, I believe the top-level talks that were held thanks to an opportunity provided by the G7 Summit marked a significant turning point in terms of continuing the negotiations at the ministerial level. In future ministerial-level talks, I am hopeful Japan's negotiating team will continue to engage its counterparts with the determination to avoid any concessions that would be detrimental to Japan's national interests in the medium and longer term. Although I am not fully informed regarding the status of negotiations on the reciprocal tariffs, itemized tariffs, and other matters at issue, I venture the Japanese side will appropriately assess all details and negotiate accordingly while sticking to its basic position that the entire series of new US tariff measures be canceled.
(In response to a question as to whether the Japanese side should seriously engage at the negotiating table with a "hurry carefully" tack now that the expiration of the US pause on applying its reciprocal tariffs is approaching) Although it is true that the pending negotiations do face that deadline, the "hurry carefully" instruction is embedded into the idea that the Japanese team should engage in these negotiations with the care to avoid any concessions that would be detrimental to Japan's interests. This stance should be upheld.
(In response to a question regarding the impact the Trump tariffs have had on Japanese companies and the economy thus far) For now, many Japanese firms face downside risks to their earnings and cannot make firm decisions about proactive investment in the United States. Also, regarding their business strategies for the medium and longer term, I am told some companies faced with these risks have expressed a stronger need than in years past to move forward with efforts to revise their business portfolios.
On the other hand, the Trump tariffs do not appear to be exerting a major impact on the Japanese economy at this point in time. As I see it, capital expenditures and corporate earnings remain firm, and the Japanese economy appears to be in a mild recovery. Against that backdrop, the outlook for the Japan-US tariff negotiations has become a major factor for uncertainty, and we will want to keep a close watch on the automotive sector, in particular, as it conceivably could be heavily impacted. Additionally, small and medium-scale enterprises have also been exposed to conditions of uncertainty, so I am hopeful appropriate domestic measures will be taken to aid them.
Acquisition of US Steel by Nippon Steel
(In response to a query seeking the Chairman's assessment of Nippon Steel's successful acquisition of US Steel) Although it was a long time coming, I strongly welcome the agreement brought about by the latest round of negotiations over the purchase of US Steel. I commend the negotiators for their tireless efforts. In the years ahead, I believe this acquisition will strengthen our industrial competitiveness within the US, create more US jobs, improve the position of Japan's industrial sector, and serve as a foundation for a stronger Japan-US partnership.
Although I am hopeful this acquisition will put Japan-US trade negotiations on a better footing, I am not certain what impact it will have in that context.
SDGs
(In response to a question regarding the reasons why Japan dropped from 18th to 19th place last year—below countries in Europe and North America—in the rankings of SDG progress published by the Sustainable Development Solutions Network [SDSN], and in particular, why it has fallen behind in action to foster gender equality and address climate change) Japan received a lower gender equality ranking due to the low percentage of seats held by women in its national parliament and its gender wage gap. Regarding efforts to promote the participation of more women in the workforce, Keidanren has launched its #HereWeGo203030 initiative, which aims to boost the ratio of corporate executive positions held by women to 30% by the year 2030. Individual firms have shown progress in applying this initiative. As of July last year, the percentage of women in executives' positions had risen to 15.6% among companies targeted by the government, namely those listed on the Tokyo Stock Exchange Prime Market. Efforts to close the gender gap are showing progress. In the context of action against climate change, Japan has not made as much progress as the EU in reducing the volume of fossil fuels it consumes. However, considering its integrated pursuit of the Green Transformation (GX), a circular economy, and nature-positive goals, as well as its energy portfolio, it should be focused on the measures in climate action Japan has launched in the interest of averting a heavy impact on its industrial activities or national standard of living.
(In response to a query regarding the status of discussions held on the SDGs by the meeting of Keidanren chair and vice-chairs in June, Keidanren's future SDG achievements, and its post-SDG targets for action) Keidanren is interested in publicizing information on its views and actions in this area. I recently shared with Keidanren's vice-chairs, our basic views on how corporations can demonstrate their leadership in achieving the SDGs and pursuing post-SDG initiatives beyond the year 2030. Specifically, we want to promote action based on five key concepts. One, for example, is the idea of encouraging companies to view sustainability—a form of social contribution—as an opportunity for growth and link it with economic growth and improved standards of living and well-being of citizens. Another is the idea of strengthening dialogue and cooperation with multiple stakeholders. In effect, Keidanren is moving to deepen its involvement in undertakings aimed at bringing society to a new stage.
General Meetings of Shareholders
(In response to a question seeking the Chairman's thoughts on the current realities of disclosure through securities reports and improvements that should be made) Engaging in sound business practices as preparers is a major prerequisite for disclosure. Mistakes discovered in a company's disclosure documents can harm its reputation and undermine its corporate value. I am aware that in an increasing number of recent cases, Keidanren member-companies have released their annual securities reports a day or a few days prior to their general shareholders' meetings. However, with the implementation of the system for sustainability reporting, it is anticipated we will see a sharp increase in the volume of securities reports going forward. Given this context, it is unrealistic to expect that companies acting on their own will be able to engage in meaningful disclosures that also give investors enough time for analysis. To achieve the original goals of disclosure, it will be necessary to proactively pursue integrated systemic reforms to the Companies Act and Financial Instruments and Exchange Act while maintaining cross-sectoral communications among all stakeholders, including companies, investors, the regulatory authorities, and related institutions.
(In response to a question regarding whether the text "integrated study leading to support for disclosures of securities reports prior to general meetings of shareholders," as articulated in the Basic Policy on Economic and Fiscal Management and Reform [also known as "Big-Boned Policy 2025"], is in line with Keidanren's position) Keidanren has called for integrated systemic reforms, and its key points have been incorporated into "Big-Boned Policy 2025."
Nissan Motor Corporation
(In response to a query seeking the Chairman's thoughts on Nissan Motor's move to reshuffle its management in response to frustrations vented by shareholders at its recent general shareholders meeting) Nissan is a company that has a major influence not only on the local communities where it operates, but on the Japanese economy as a whole. I want to see it implement an effective and reliable management reorganization process.
Without being informed about the specifics of the discussions that took place at the shareholder's meeting, I can't comment in any detail. However, it will be crucial for Nissan to reorganize its management and boost its corporate value over the medium and longer term by being receptive to the views of its shareholders and resolving its managerial issues through constructive dialogue.
Fuji Television
(In response to a question regarding the Chairman's assessment of the proactive posture Fuji TV's parent company, Fuji Media Holdings, demonstrated at its recent general shareholders meeting [June 25] since revelations of the Fuji TV scandal came to light, and his stance on a decision by Nippon Life Insurance Company to resume advertising through Fuji TV) My understanding is that the government has applauded Fuji Media Holdings for taking firm steps to implement the Reform Action Plan it announced at the end of April this year. I want to see it endeavor to regain the public's trust through its implementation of that plan.
However, resuming advertising through Fuji TV is a business decision for individual companies to make. While it is important to pay attention to what goes on at general shareholders meetings, in this case, advertising on Fuji TV should be resumed only after confirming how the company plans to restore trust and the actions it is taking to that end. I don't think Nippon Life Insurance intends to resume advertising immediately after Fuji Media Holding's general shareholders meeting.