- Middle East Situation
- Provisional Budget Bill
- National Council on Social Security
- China's Export Ban on Dual-Use Items to Certain Japanese Companies
- Strengthening Defense Capabilities and Defense Equipment Transfers
- Regional Minimum Wages
Middle East Situation
(In response to a question about President Trump's reaction to Prime Minister Takaichi's remarks at the Japan-U.S. summit on dispatching vessels to the Strait of Hormuz, and about expectations for the Japanese government's future response) Given the constraints imposed by the Constitution of Japan, Prime Minister Takaichi's explanation that there are things Japan can and cannot do under the law is exactly right. If a ceasefire is achieved, there will be greater scope for Japan to provide support and make a contribution. Until then, the basic approach should be to do whatever is legally possible, including diplomatic efforts in coordination with the countries concerned to help bring about an early de-escalation.
(In response to a further question about the impact of prolonged tensions in the Middle East) At present, the risk of a prolonged crisis is rising, but it is extremely difficult to determine what impact this will have on the real economy and people's livelihoods. Nevertheless, we need to be fully prepared for the possibility that the situation will become protracted, and if that is judged to be inevitable, there will be a need to implement appropriate economic measures. With disruptions in crude oil transport beginning to have tangible effects, swift responses are being taken, including emergency measures to cushion sharp fluctuations, the release of oil reserves by Japan on its own and through the International Energy Agency (IEA), and efforts to secure alternative sources of supply. We hope the government will continue to do everything possible to ensure a stable energy supply through coordination with the countries concerned and public-private cooperation. At the same time, while watching the impact on the real economy and people's livelihoods even more closely, Keidanren intends to carefully assess the need for economic measures based on the views of its member companies.
(In response to a question about subsidies to curb gasoline price increases in the event of prolonged tensions in the Middle East) Without the current emergency measures to cushion sharp fluctuations, prices could rise by several tens of yen per liter above the benchmark of roughly 170 yen per liter. In that context, the purpose of these measures is understood to be to cushion sudden price swings and thereby mitigate their impact on the economy and people's livelihoods. The use of reserve funds recently approved by the Cabinet is understood to be intended to respond swiftly to larger-than-expected fluctuations. Fundamentally, however, there is a need to consider the next steps with the risk of a prolonged disruption in oil supply in mind. First and foremost, it is important to make use of reserves over a longer period, and urgent, comprehensive consideration should be given to what measures are needed on both the supply and demand sides.
(In response to a further question about the anticipated scale of future economic measures) At this point, it is not even possible to estimate how long the deterioration of the Middle East situation will continue, and it is impossible to foresee the extent of the severe impact on the real economy and people's lives. Accordingly, we would prefer not to comment on the anticipated scale of economic measures.
(In response to a question about the IEA report published on March 20 and its 10 measures for addressing the energy crisis) I understand that the effectiveness of these measures has already been demonstrated and that some countries have already adopted some of them. If the worsening situation in the Middle East is prolonged, it is first and foremost important to make use of oil reserves over a longer period, and a comprehensive review of measures on both the supply and demand sides will be urgently needed. While the IEA report presented demand-side measures, Japan has a history of implementing various initiatives during repeated energy crises in the past. After reviewing and evaluating that track record, Japan needs to respond autonomously while anticipating future risks.
(In response to a further question about whether Keidanren plans to issue any kind of appeal to member companies) There is no need to make an immediate appeal. However, if it is determined that prolonged tensions in the Middle East are unavoidable, it may become necessary to ask member companies to cooperate on both the supply and demand sides in order to protect people's livelihoods.
(In response to a question about rising prices for naphtha and other petroleum-related products) When petroleum-related products are subject to supply uncertainty, it is rational corporate behavior for manufacturers to raise prices. Whether the government should, for example, provide support to offset the price gap will be an issue going forward, but this is an extremely difficult question, including from the standpoint of funding, and a broader review of measures beyond support for the price gap is also required. In any case, to ensure a stable energy supply going forward, it is important to pursue diplomatic efforts in coordination with the countries concerned while also diversifying procurement sources through public-private cooperation.
(In response to a question about whether the government should conduct another release of oil reserves) I understand the reserve releases already carried out have contributed to stabilizing supply and market prices. Any further release of reserves should be carefully thought out, comprehensively taking into account such factors as timing, duration, scale, the targeted price level, and the psychological impact on businesses and the public. At this point, I do not believe a further release of reserves should be carried out immediately. On the other hand, if the impact of a prolonged situation proves to be significantly severe, a further reserve release should be considered.
Provisional Budget Bill
(In response to a question about the government beginning to compile a provisional budget bill and views on Diet deliberations to date) The budget is a critical decision that sets the country's direction, and it is only natural that time is spent on Diet deliberations. However, uncertainty surrounding the Middle East has risen sharply, and there are extremely strong concerns about the impact on the economy and people's lives. From the standpoint of flexible policy response, the need to enact the next fiscal year's budget swiftly is fully understood, and a balance between speed of deliberation and thorough debate should be ensured. In this context, the decision to compile a provisional budget is understood to have been announced in order to prevent a gap in budget coverage in preparation for unforeseen circumstances.
(In response to a further question about whether measures in response to the Middle East situation should be incorporated into the next fiscal year's budget as the ruling and opposition parties deliberate thoroughly) Measures in response to the Middle East situation have already begun to be implemented. Amid these circumstances, consideration must be given to how long the current instability in the Middle East will persist within the timeframe of enacting the next fiscal year's budget promptly. If, under the assumption that a prolonged situation is inevitable, new economic measures are to be introduced, the deliberation of those measures would also require some time, so the priority should be to enact the next fiscal year's budget first.
National Council on Social Security
(In response to a question about concerns regarding the Council) It is only natural that a two-year consumption tax cut on food and beverages and refundable tax credits will initially be discussed intensively, given that these were key issues in the recent House of Representatives election. That said, the primary aim of Keidanren's longstanding call for the establishment of a National Council has been to foster public discussion on building a comprehensive vision for a sustainable, fair, and equitable social security and tax system—specifically, an all-generation social security system. To ensure the sustainability of the social security system, a vision for reform should be presented. To that end, it is necessary to make the medium- to long-term outlook for benefits and burdens visible. In doing so, analysis should not be limited to macro-level projections but should also include micro-level analyses by income bracket, household type, and generation, taking into account groups such as the employment ice-age generation and workers on fixed-term contracts, so that reforms to benefits and burdens can be advanced based on actual conditions. This is the heart of social security system reform, and we intend to press for continued discussion beyond the interim report expected before this summer.
China's Export Ban on Dual-Use Items to Certain Japanese Companies
(In response to a question about whether member companies have raised concerns about specific impacts, more than a month after the measures were imposed) We are hearing various concerns indirectly. There are reports that export permits are difficult to obtain or are taking considerable time, but it is understood that solutions are being sought in coordination with the Japanese government on a case-by-case basis. While individual companies may find it difficult to disclose specific impacts given the implications for corporate value, we will continue to place importance on the views of member companies as we explore avenues for resolving the situation and restoring Japan-China relations.
Strengthening Defense Capabilities and Defense Equipment Transfers
(In response to a question about the approach to government discussions on strengthening defense capabilities and expanding arms exports) Peace and human rights are universal ideals shared by all humanity, and in light of Japan's historical experience, we must deeply appreciate the importance of the pledge never again to wage war. At the same time, when we look at the world today, there is the stark reality of regional conflicts and of deepening division and confrontation, and Japan must strengthen its defense capabilities accordingly. Looking back at history, science and technology have in some respects developed out of military applications, and Japan too needs to advance science and technology and strengthen its defense capabilities with an awareness of dual-use applications. Strengthening defense capabilities and defense equipment transfers should be thoroughly discussed at the national level, and the pursuit of overarching ideals and practical responses should proceed in a way that is grounded in reality.
(In response to a further question about the government's policy on expanding arms exports and the course of discussions with the government, as well as Keidanren's future approach) I am not aware of the starting point of the government's discussions on expanding defense equipment transfers, but if Keidanren is asked to take some form of action toward expanding such transfers, the matter would be subject to deliberation within Keidanren. Given Japan's history of attaching importance to peace, human rights, and the pledge never again to wage war, a discussion on the proper approach to defense equipment transfers is necessary.
Regional Minimum Wages
(In response to a question about the fact that the effective dates of FY2025 regional minimum wages have carried over into 2026 in some prefectures) While we do not have an exact grasp of the details, the basic principle is that each regional minimum wage council determines the effective date and implements it in an orderly manner. We recognize it as an issue that this has occurred at a time of rising prices.