The BGA Japan Team, led by Managing Director Kiyoaki Aburaki, wrote a client update on the recent cabinet reshuffle in Japan. The update addressed the context of the development, its significance and the potential implications for companies.

Context

  • Japanese Prime Minister Fumio Kishida reshuffled his Cabinet on August 10 in response to public outrage over the ruling Liberal Democratic Party’s (LDP) ties to a controversial religious group. The appointment of new LDP officials was originally scheduled for early September but was accelerated one month when news surfaced about the LDP’s dubious relationship with the Unification Church.
  • Reports accuse the church of supporting several LDP lawmakers’ election campaigns. Revelation of the church’s influence in Japanese politics has fomented growing public distrust of the LDP and Kishida’s Cabinet, culminating in the party’s sharp drop in popularity.

Significance

  • Observers believe the reshuffle was intended to bolster the LDP’s standing. According to this line of logic, this could help minimize political fallout following the party’s steep decline in several polls.
  • Maintaining a balance of power among the LDP’s major factions — including that of former Prime Minister Shinzo Abe, who was murdered on July 8 for his ties to the Unification Church — could have been another consideration. This is particularly the case as Kishida seeks to minimize personnel disputes and ensure party unity.

Implications

  • Businesses should expect political stability and greater cohesion within the LDP, which will drive government productivity. With no national elections for the next three years, Kishida will face few obstacles to effectively managing his administration. In major opinion polls, more than half of the Japanese public supports Kishida’s response to the Russia-Ukraine crisis, increase in defense spending and COVID-19 strategy.
  • Companies should monitor the LDP’s and Kishida’s political support, which is expected to gradually improve. Once LDP ties with the Unification Church are severed, it is anticipated that the Kishida administration will likely recover public support over time.

BGA will continue to keep you updated on developments in Japan as they occur. If you have any comments or questions, please contact BGA Japan Managing Director Kiyoaki Aburaki at kaburaki@bowergroupasia.com.

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Managing Director

Kiyo understands the Japanese business community inside and out from his three decades working for Japan’s most powerful business organization, Keidanren. He covers international trade and investment, defense and aerospace, information technology, entrepreneurship, deregulation and data privacy policy. He also played a leading role in developing and implementing political strategies for the private sector. Kiyo has led Keidanren’s strategic international initiatives since 2013, and most recently headed up the federation’s international engagement. He worked closely with former Prime Minister Yasuo Fukuda to establish Japan’s Track 1.5 dialogues with the United States and China. The dialogues produced important results by strengthening ... Read More