- China's Strengthened Export Controls Toward Japan
- Reports on a Possible Dissolution of the House of Representatives
- Stock Prices, Exchange Rates, and Interest Rates
- Hamaoka Nuclear Power Station
- Passing of Mr. Uichiro Niwa
China's Strengthened Export Controls Toward Japan
(In response to a question regarding the impact of China's strengthened export controls on dual-use items toward Japan, and what is required to improve Japan—China relations) Although many aspects remain unclear, we regard China's strengthening of export controls targeting only Japan as an explicit act of economic coercion, which is deeply regrettable. At present, it is difficult to state definitively how this will affect the Japanese economy, but if the strengthened export controls expand in practice, I am concerned that serious impacts could arise across a wide range of industries. We will continue monitoring developments carefully and work together with the public sectors in responding.
Japan—China relations remain one of our most important bilateral relationships, and we hope the two governments will continue building communication through dialogue. Keidanren also intends to seek opportunities for dialogue with Chinese leaders, ministers, the business community and so on.
(In response to a question regarding the agreement among G7 and several resource-producing countries' finance ministers to strengthen supply chains for rare earths and other critical minerals and reduce dependence on China) The importance of building international networks with like-minded countries goes without saying. We welcome the fact that such efforts are advancing within frameworks that include the G7.
Reports on a Possible Dissolution of the House of Representatives
(In response to a question about reports that Prime Minister Takaichi is considering dissolving the House of Representatives at the start of the ordinary Diet session) Dissolution is the sole prerogative of the prime minister, so I will refrain from commenting in detail.
(In response to a question about the evaluation of Prime Minister Takaichi's measures to address rising prices) Measures such as eliminating the provisional gasoline and diesel fuel tax rates and providing subsidies for electricity and gas bills are expected to help curb inflation. As inflation gradually settles around the 2 percent target often cited in monetary policy, and as strong momentum for wage increases becomes further established, we expect a sustained environment in which real wages move into positive territory. In that sense, we view the prime minister's inflation countermeasures as indirectly contributing to positive real wage growth.
Stock Prices, Exchange Rates, and Interest Rates
(In response to a question regarding the Nikkei Stock Average surpassing 53,000 yen and reaching an all-time high after reports of a possible lower house dissolution) Stock prices remain strong, in line with global trends led particularly by AI and semiconductor-related stocks.
Exchange rates and long-term interest rates also appear to be responding to market expectations surrounding monetary policy developments in Japan and the United States, and other circumstances. The yen has weakened somewhat excessively, and I believe some correction toward yen appreciation is necessary. Rising long-term interest rates may also reflect market views on fiscal management.
The government should ensure fiscal sustainability and maintain market confidence through efforts to improve fiscal health over the medium to long term. It is also important that the government communicates with an awareness of market confidence.
(In response to a question about whether current exchange rates deviate from Japan's fundamentals, and whether correcting the yen's depreciation should be left to the market or addressed through intervention by monetary authorities) Exchange rates should reflect a country's economic fundamentals, and in that sense, the current yen depreciation appears somewhat excessive.
As a rule, exchange rates are best left to the market. If Japan firmly establishes an investment-driven economy and its potential growth rate improves over the medium to long term, I am confident that economic fundamentals will be reflected in the exchange rate, and the yen will appreciate.
However, exchange rates also reflect a range of market expectations, and it is a fact that short-term speculative behavior has a significant impact. If such factors cause the yen to weaken excessively, then foreign-exchange intervention would be appropriate.
Hamaoka Nuclear Power Station
(In response to a question about Chubu Electric Power's inappropriate seismic assessment and report during the Nuclear Regulation Authority's review of the Hamaoka Nuclear Power Station, and Keidanren's response) Although we don't have a complete grasp of details, this is a serious issue that could undermine public trust in nuclear safety, which is the fundamental prerequisite for nuclear power, and is extremely regrettable.
As we have repeatedly stated in relation to the restart of the Kashiwazaki-Kariwa Nuclear Power Station, ensuring safety and gaining local understanding are essential. Operators must uphold safety, secure local understanding and maintain high ethical standards to support both. In this case, it is important that the third-party committee established by Chubu Electric Power conducts a thorough investigation, ensures full transparency and implements reliable measures to prevent recurrence.
Keidanren does not currently plan to take specific measures toward Chubu Electric Power as an individual company. We will observe closely how transparency is ensured and how the company approaches recurrence prevention.
(In response to a question about whether other electric power companies should also re-examine their reports submitted during Nuclear Regulation Authority's screenings) It is important to see how other operators perceive this issue. As Chubu Electric Power investigates the causes and ensures transparency, we expect other operators to have a self-corrective effect. Whether additional administrative action is needed will depend on future developments.
Passing of Mr. Uichiro Niwa
(In response to a request for comment on the passing of Mr. Uichiro Niwa, former President of Itochu Corporation and former Ambassador of Japan to China) I have met Mr. Niwa and regard him as a key figure who helped build Itochu into the strong general trading company it is today. I would like to express my condolences.