Long-term interest rate hits 29-year high, fiscal concerns intensify over 'Basic Policy'

Long-term interest rate at 2.83%, 29-year high; fiscal concerns over Basic Policy In the Tokyo bond market on the 6th, the yield on newly issued 10-year government bonds, a benchmark for long-term interest rates, temporarily rose to 2.83%, reaching a high level not seen since May 1997, about 29 years. Bonds were sold due to concerns that the Takaichi administration's draft 'Basic Policy on Economic and Fiscal Management' released at the end of June removed language on fiscal consolidation, and the market is reacting with what is being called a 'Basic Policy shock.' 12

LDP and CDP agree on intensive deliberations and party leaders' debate; Diet on path to normalization The LDP and Constitutional Democratic Party's House of Councillors Diet Affairs Committee chairmen met on the 6th and agreed to hold intensive deliberations of the House of Councillors Budget Committee with Prime Minister Takaichi in attendance and a party leaders' debate within the current Diet session (until the 17th). The opposition side plans to respond to deliberations on government-proposed bills, raising the prospect of the Diet normalizing for the first time in about a week. The party leaders' debate is being coordinated around the 15th. 345

Prime Minister Takaichi says putting review of Three Non-Nuclear Principles 'on the table for discussion' Prime Minister Takaichi stated in the House of Councillors Committee on Audit on the 6th, in response to a request from Shigefumi Matsuzawa of Nippon Ishin (Japan Innovation Party), that he would put the review of the Three Non-Nuclear Principles 'on the table for discussion.' The government plans to revise three security-related documents by the end of the year, and the Prime Minister emphasized that he would 'discuss all issues thoroughly,' but refrained from speculating on specific review details. 46

LDP considers expanding wiretapping and creating foreign interference crime The LDP's Intelligence Strategy Headquarters' draft outline of points for recommendations includes consideration of expanding the scope of permissible communications interception for 'security purposes' to prevent espionage, and creating a new 'foreign interference crime.' It also specifies the establishment of an independent body to oversee activities. The party calls for careful institutional design as it may conflict with the constitutional secrecy of communications. 7

Consumption tax reduction debate to resume on the 13th; cross-party national council agrees The cross-party National Council on Social Security agreed that each party will resume discussions on reducing the consumption tax on food items by holding a working-level meeting on the 13th. This decision follows the prospect of the House of Councillors normalizing. Discussions had stalled due to the Diet's paralysis, but from the 13th onward, compilation of specific proposals is expected to proceed. 8

China launches ballistic missile from nuclear submarine; government maintains vigilance Regarding the Chinese Navy's launch of a ballistic missile from a strategic nuclear submarine, Chief Cabinet Secretary Kihara explained on the 6th that it did not pass through Japan's airspace or exclusive economic zone (EEZ). The government considers China's military activities a 'serious concern' and will continue to maintain vigilance and monitoring. China had notified Japan before the launch. 9

Hama Sushi nuisance: 43-year-old unemployed man rearrested after fine The Saitama Prefectural Police rearrested suspect Yuta Nishi (43) on the 6th on suspicion of forcible obstruction of business for posting a video of touching the nozzle of a soy sauce bottle at a 'Hama Sushi' restaurant. The same suspect had just received a summary order of a 500,000 yen fine in June for a similar act, and the operating company had reported the new posting. 10