Ex-PM Abe’s Office Investigated Over Cherry Blossom Party Scandal – The Diplomat

Tokyo Report | Politics | East Asia

A scandal from 2018 continues to dog the former Japanese prime minister.

Credit: Russian Presidential Press and Information Office

Former Japanese Prime Minister Shinzo Abe acknowledged Tuesday his office is being investigated for questionable expenses linked to a dinner party his office hosted for his supporters ahead of an annual cherry blossom viewing party — a scandal that has been on the backburner for months.

Abe made the comment in response to reports Monday that the Tokyo District Public Prosecutors’ Office has been interviewing his aides over the scandal. None of his aides or supporters have been arrested so far.

Abe, who was in power for nearly eight years as Japan’s longest-serving leader, stepped down in mid-September, citing ill health, but some critics have said the scandal might have been a reason. His successor as prime minister, Yoshihide Suga, who served as chief Cabinet secretary in Abe’s government, scrapped the cherry blossom viewing party the day he took office.

The scandal involves a 2018 annual dinner party for which Abe’s guests paid a 5,000 yen ($48) fee. Opposition lawmakers have said that the fee was too low for a party at an upscale Tokyo hotel, and that Abe’s office allegedly covered the difference without reporting it properly.

“My office is fully cooperating with the investigation launched in response to a criminal complaint,” Abe told reporters Tuesday. He declined to give details of the investigation and said he had already provided an explanation during parliamentary sessions earlier this year when questioned by opposition lawmakers.

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The investigation comes in response to criminal complaints filed earlier this year by a group of hundreds of lawyers and scholars asking Tokyo prosecutors to investigate whether Abe and executives from his political support group had subsidized party fees for Abe’s supporters in 2018 in alleged violation of campaign and election funds laws.

Japanese law prohibits politicians from giving gifts to constituents.

Abe has repeatedly denied any wrongdoing.

By Mari Yamaguchi for the Associated Press in Tokyo, Japan.

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Abe’s likely successor says future consumption tax hike inevitable

TOKYO — Chief Cabinet Secretary Yoshihide Suga, who is leading the race to become Japan’s next prime minister, suggested Thursday that the nation’s consumption tax needs to be raised beyond the current 10% in the future, citing the rapidly aging population. 

“When we think about the future, we have no choice but to raise the rate again, after carrying out thorough administrative reforms,” Suga said in an appearance on TV Tokyo. “No matter how hard we try, Japan’s population is going to shrink.”

This is the first time Suga, a longtime lieutenant of Prime Minister Shinzo Abe, has referred to the possibility of a consumption tax hike since the ruling Liberal Democratic Party’s leadership race kicked off. He has maintained Japan must first be on the track for recovery before it improves its balance sheet.

Japan is in dire fiscal straits. Long-term national and regional debt now stand at 1.1 quadrillion yen ($10.4 trillion), or twice Japan’s gross domestic product. The Bank of Japan is essentially making up for the shortfalls in the government budget through purchasing large amounts of government bonds.

Prime Minister Shinzo Abe raised the then 5% consumption tax rate to 8% in April 2014, and then to 10% in October 2019. Prior to the last hike, Abe said in July last year that a hike beyond 10% “will not be necessary for the next 10 years or so.”

Japan watchers are most interested in how the next leader plans to grow the Japanese economy, which will also help address the nation’s towering debt.

“The ideal is for Japan to be able to grow without relying on fiscal or monetary policy,” said Katsutoshi Inadome at Mitsubishi UFJ Morgan Stanley Securities.

“We will see if they [the candidates] are serious about reforms in technology and telecommunications,” said Yoshimasa Maruyama at SMBC Nikko Securities.

The candidates’ approaches to monetary policy are also drawing scrutiny.

Suga has signaled he would stay the course on aggressive easing under Abe — one of the three arrows of Abenomics. 

“I would like to work with the BOJ like Prime Minister Abe did,” he has said. But Suga has also hinted at the possibility of further easing, saying that he would “advance monetary policy if the situation requires it.”

Although Article 3 of the Bank of Japan Act says its “autonomy regarding currency and monetary control shall be respected,” Article 4 urges the central bank to “always maintain close contact with the government” to ensure its policies are compatible with the government’s. The BOJ issued a joint statement with the Abe administration in 2013 declaring its commitment to bringing Japan out of deflation.

“The market reacted favorably to the idea that he would keep the same monetary policies,” said Yuji Saito at Credit Agricole Corporate and Investment Bank. 

But market players are wary of interest rates digging deeper into negative territory, since that would make it harder for already strained financial institutions in Japan to turn a profit. When the BOJ first introduced negative rates in 2016, investors dumped banking stocks and the yen strengthened against the dollar.

“There will be a negative response if rates go lower,” Saito said.

“Further easing will fuel concerns that future pensioners will receive less cash, and lead individuals to save more,” said Minori Uchida at MUFG Bank.

Both of Suga’s opponents have raised alarms about further easing.

“Interest rates are already in negative territory, and we know how that is impacting regional financial institutions,” LDP policy research chief and former Foreign Minister Fumio Kishida said. He argued that Japan should eventually normalize its monetary policy in cooperation with the international community.

Meanwhile, former Defense Minister Shigeru Ishiba said he was worried about the BOJ’s outsize influence on the stock market through large-scale purchases of exchange-traded funds. “What does it mean for the health and sustainability of the stock market for the government to play such a big role?” he said.

“Many people believe the BOJ should gradually cut back on purchasing assets,” said Shuichi Osaki at Bank of America Merrill Lynch. “But that would be difficult, since it goes against the goal to raise inflation to 2%.”

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Fear of crumbling US-Japan pact drove Abe’s defense expansion

TOKYO — Shinzo Abe leaves the post of Japan’s prime minister with many tasks unfinished, including the economic revitalization promised by Abenomics, but his achievements in diplomacy and security should be recognized by future generations.

The most significant of these is mending and strengthening the relationship with the U.S. after it frayed under Abe’s predecessor, Yukio Hatoyama of the now-defunct Democratic Party of Japan. Abe also partnered with Australia and India to lay a stepping-stone for security cooperation in the Indo-Pacific.

Yet Japan’s safety remains far from assured. The surrounding security environment has deteriorated to the point of canceling out Abe’s accomplishments.

Abe himself is no doubt keenly aware of this fact. While in office, aides say, he was constantly concerned that Japan’s stability could not be maintained without further reinforcing its alliance with the U.S.

His government implemented landmark security legislation in March 2016 that enables Japan to exercise a limited right to collective self-defense — the ability to come to the aid of allies under attack — to support American forces.

Abe also reversed the shrinking of Japan’s defense budget, which steadily grew from fiscal 2013 to fiscal 2020, enabling Tokyo to enhance the capabilities of the Self-Defense Forces. His establishment of a National Security Council created a framework allowing for speedy course changes in foreign policy.

Some opposition parties’ politicians and experts condemned Abe, whom they perceived as trying to loosen checks on the use of force and make Japan a nation that can wage war again. Some observers interpreted his insistence on revising a constitution drafted under American military occupation as a means to strengthen Japan’s forces and ultimately enable it to stand on its own, independent of the U.S.

But looking back on the inner workings of Abe’s government paints a different picture. Far from seeking to become independent of Washington, Abe was desperate to keep American forces involved in Japan’s defense and ensure its stability.

According to sources in the government and Abe’s Liberal Democratic Party, the prime minister worried that if Japan did not do more to build up its own defenses, U.S. voters would be less and less willing to accept America’s obligation to defend the country. He also noted that North Korea’s nuclear arsenal and China’s military expansion had significantly increased the costs and risks to Washington.

And so, he argued, it would become difficult to preserve stability even with the alliance if Japan did not play a wider variety of roles in its own defense.

It is true that the balance of naval power between the U.S. and China is shifting in Beijing’s direction, at least in numerical terms. A report released Tuesday by the U.S. Department of Defense acknowledged that China has “the largest navy in the world,” with about 350 ships and submarines to the U.S. Navy’s 293. China has well over 1,000 land-launched medium-range cruise missiles, while America has none.

Abe pushed ahead with the 2016 security legislation in the face of polarized public opinion and a sinking approval rating because he feared that the Japan-U.S. alliance could eventually weaken or even collapse.

Are these fears overblown? Exchanges between Washington and Tokyo in recent years hint that they may not be.

In his 14 meetings with Abe, U.S. President Donald Trump repeatedly griped about a relationship he considered “unfair.”

When the U.S. sent three aircraft carriers to the Korean Peninsula during the escalation of the North Korea crisis in 2017, Trump reportedly complained about the massive cost and said Tokyo ought to do more.

The president has also openly questioned the two countries’ defense pact, calling it “unfair” that the U.S. is obligated to protect Japan but not the other way around. It would be a serious mistake to assume that this is just another case of “Trump being Trump” and thus should not be taken at face value.

It was not Trump, but his predecessor Barack Obama, who said that the U.S. “would not play the role of the world’s policeman.” Even if Obama’s former vice president, Joe Biden, defeats Trump in the upcoming presidential election, this attitude is unlikely to change.

Over the past two decades, the U.S. has grappled with wars in the Middle East and Afghanistan and, domestically, historically high inequality and division. There is a growing sense among the public that Washington should first focus on fixing matters at home rather than protecting foreign countries.

In a survey released last November by the U.S.-based Eurasia Group Foundation, 57.6% of respondents said the U.S. should reduce its military presence in Asia. The coronavirus pandemic has probably strengthened this view.

For the government following Abe’s, it will be vital to recognize this trend from the outset and ensure the alliance does not run out of steam. There are numerous issues that will need to be worked out with Washington right away, including a new missile defense system with the shelving of Aegis Ashore, as well as the question of whether the SDF should develop counterattack capabilities.

Meanwhile, many in the opposition parties still object to the security law. If so, they should offer a detailed alternative plan for how to strengthen the alliance and respond to a difficult security environment.

Building a stable relationship with China through deeper economic cooperation and dialogue will also be important. Since 2017, Abe has offered support under certain conditions for projects under President Xi Jinping’s Belt and Road infrastructure initiative, and Xi had been slated for a state visit to Japan this year before the coronavirus pandemic.

Yet amid this, Beijing has made incursions around the Japan-administered Senkaku Islands, which China claims as Diaoyu and expanded its military presence in the East and South China seas.

The next prime minister will have no choice but to continue its efforts to defuse tension with China while taking steps to bolster national security.

Even with more consecutive days in office than any other Japanese prime minister, strengthening the alliance with the U.S. was no easy feat for Abe. Continuing these efforts — and maintaining a system to ensure that the horrors of war are not repeated — will be his successor’s most important duty.

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Shinzo Abe’s Legacy – WSJ

Japanese Prime Minister Shinzo Abe said Friday he’s resigning for health reasons, and it’s his country’s loss. His intentions were right even if he often struggled to overcome entrenched opposition to the reforms he knows Japan needs.

Mr. Abe leaves office as the country’s longest-serving prime minister, having entered the post (for the second time) in 2012. His first turn in the top job, in 2006-2007, was cut short by the same ulcerative colitis that’s prompting him to depart now. Mr. Abe’s eight years in office were characterized…

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