Japan rice prices double, raising pressure on PM Ishiba
Tokyo - Rice prices in Japan soared 99.2 per cent in June year-on-year, official data showed July 18, piling further pressure on Prime Minister Shigeru Ishiba ahead of elections this weekend.
The price of the grain already rocketed 101 percent year-on-year in May, having jumped 98.4 per cent in April and more than 92.5 per cent in March.
Overall, Japan's core inflation rate slowed to 3.3 per cent in June from 3.7 per cent in May, the data from the internal affairs ministry showed.
The reading, which excludes volatile fresh food prices, was slightly below market expectations of 3.4 per cent.
Excluding energy and also fresh food, consumer prices rose 3.4 per cent, compared with 3.3 per cent in May.
Public support for Mr Ishiba's administration has tumbled to its lowest level since he took office in October, partly because of frustration over the cost of living.
One of the main sources of anger has been inflation and in particular the surging cost of rice, as well as scandals within the ruling party.
The 68-year-old leader's coalition was deprived of a majority in the powerful lower house in October.
It was the worst election result in 15 years for the Liberal Democratic Party (LDP), which has governed Japan almost continuously since 1955.
Opinion polls ahead of July 20's election suggest the ruling coalition may lose its majority in the upper house as well.
This could force Mr Ishiba to resign after less than a year in office.
Tariff pressure
He is under additional pressure to reach a trade deal with the United States before new tariffs of 25 per cent take effect on Aug 1.
Japan's important auto imports into the world's biggest economy are already subject to painful levies, as are steel and aluminium.
US President Donald Trump wants to get Japanese firms to manufacture more in the United States, and Tokyo to buy more US goods – notably gas and oil, cars and rice – to reduce the US$70 billion (S$90 billion) trade deficit with the Asian powerhouse.
Mr Ishiba, who has sent his trade envoy Ryosei Akazawa to Washington seven times to try and broker a deal, was due to host US Treasury Secretary Scott Bessent on July 18.
The Bank of Japan has been tightening monetary policy since last year as inflation crept up but worries about the impact of US tariffs on the world's number four economy has forced it to take a slower approach.
Factors behind the rising price of rice include shortages due to an intensely hot and dry summer two years ago that damaged harvests nationwide.
Since then some traders have been hoarding rice in a bid to boost their profits down the line, experts say.
The issue was made worse by panic buying in 2024 prompted by a government warning about a potential 'megaquake' that did not strike.
The government has taken the rare step of releasing its emergency stockpile since February, which it typically only ever did during disasters. AFP
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Straits Times
22 minutes ago
- Straits Times
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Find out what's new on ST website and app. Japanese Prime Minister Shigeru Ishiba shakes hands with US Treasury Secretary Scott Bessent, before their meeting at the Prime Minister's Office in Tokyo on July 18, 2025. – Japan's Prime Minister Shigeru Ishiba has been full of bluster during street rallies for the Upper House election on July 20, striking a note of defiance over US trade tariffs as he swore that his country 'will not be taken for fools'. The beleaguered Premier, who also faces domestic pressures, said at a rally speech in Funabashi, near Tokyo, on July 9: 'This is a battle fought over national interests. We must say what we have to say, squarely and bluntly, to our ally. We will not be disrespected.' He would later stress that Japan is 'not to be underestimated'. 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Mr Bessent replied: 'I am sure we can reach a good agreement.' The latter was leading a delegation to attend US 'National Day' festivities at the Osaka World Expo on July 19, and it is understood that no trade talks have been planned during his visit. Mr Ishiba told reporters after the meeting: 'Nothing has been fixed, including a meeting with President (Donald) Trump, but I believe there will naturally be an opportunity to talk directly with the President with our national interests on the line.' The lack of any diplomatic breakthrough will weigh on Mr Ishiba, who had been a maverick on the fringes of the LDP until he was propelled to power under the most unlikely of circumstances. This means Mr Ishiba has a weak support base within the party, and his tenuous grip on power will be further tested. He has set a target for the LDP and its coalition partner Komeito to win at least 50 seats, to defend their majority in the chamber. 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This means the LDP will have to bend over backwards to make even more concessions than they do now to the opposition to pass legislation. The hustings have been dominated by anti-foreigner sentiment , weaponised by the far-right Sanseito. The ultra-conservative party had its origins as an anti-vaccine group but has enjoyed a meteoric rise with its unabashed 'Japanese First' slogan and its spreading of misinformation of foreigners getting preferential treatment at the expense of citizens. Sanseito has latched on to right-wing conspiracy theories propagated by Russia-affiliated social media accounts – the government on July 16 said Japan has been a 'target of foreign election interference' – claiming that Japan is facing a 'silent invasion' of foreigners and at risk of becoming an 'economic colony' given the influx of foreign investments and tourist dollars. Another dominant issue is the cost-of-living crisis, which has been epitomised by soaring rice prices . The ruling coalition has proposed cash handouts, while the opposition is promising temporary cuts to the consumption tax of varying degrees, to provide economic relief. What has not helped Mr Ishiba's quest for the LDP's electoral victory is Mr Trump's July 7 salvo, which came days into the election hustings, that Japan will face a 'reciprocal' tariff of 25 per cent from Aug 1. This marked a one percentage point increase from the proposed rate in April, and is separate from sectorial duties already in force for cars and car parts, as well as steel and aluminium. Mr Trump has placed squarely in his crosshairs Japan's sacred cows of rice and cars, which Mr Ishiba has described as areas of national interest. Mr Trump wants Japan to import more American rice and cars. As the clock winds down on the Aug 1 deadline, Mr Trump on July 15 again bashed Japan for refusing to open up trade barriers, hinting that Tokyo was nowhere close to negotiating down the tariffs. He said: 'I think probably we will live by the letter with Japan.' Geoeonomics expert Saori Katada of University of Southern California told The Straits Times: 'Trump is not playing a bilateral game, so whatever Japan has done would not have worked.' 'The deeper the interdependence, the more effectively coercion hits,' she said, noting that a US-Japan trade agreement was already brokered between Mr Trump and then-prime minister Shinzo Abe in 2019. 'Given the existing trade deal, Japan has not much to give to the US,' she said. Dr Sota Kato, a former Japanese trade negotiator, told ST that Tokyo's belief – that it was a valued ally with a special relationship with the US, which would grant it a fast track to a deal – was misplaced. 'Japan has been sticking to a stance grounded in principle, rather than pragmatism, in this negotiation. While such an approach worked reasonably well in past bilateral negotiations with the US, it doesn't seem to be effective this time,' he said. 'If Japan is to strike a deal, it will need to move beyond rigid principles and seek practical concessions, including the reduction of some non-tariff trade barriers.' Dr Kato, who is now a research director at The Tokyo Foundation for Policy Research think-tank, pointed to inexperience for the current lack of success. Chief trade negotiator Ryosei Akazawa has visited Washington seven times without tangible results, which was 'highly unusual'. 'It appears that Akazawa may have only engaged at the bureaucratic preparatory-level, rather than taking true political initiative,' he said. 'Ishiba's limited political network is having a noticeable impact.' He felt that it would be very difficult for Mr Ishiba to reverse course and offer heavy concessions even after the election. 'If the Ishiba administration were to abruptly shift its stance, it would likely face strong criticism from farmers and the auto industry. That makes such a reversal politically difficult,' he said. The impasse with the US boiled down to a 'lack of leadership to make tough and swift decisions', he added.
Straits Times
an hour ago
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Straits Times
an hour ago
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