Wednesday, January 16, 2008

911 inside job discussed in Japanese UPPER HOUSE

Of course the US media will not talk about it, but that is to be expected.

More and more people are beginning to understand the inside job nature of the event. In the past week I have spoken to 4 people about it and all were receptive.

On January 11th 2008, Fujita Yukihisa made a 30 minute presentation at the House of Councillors (equivalent to the U.S. Senate). He directly questioned the official version of 9/11 in a session with Japanese Prime Minister Fukuda Yasuo and members of his Cabinet.

Fujita is a member of the opposition party, Democratic Party of Japan (DPJ). He was elected to the House of Councillors in 2007. He is a former Member of the House of Representative and Former Vice Director General of the International Department of the Democratic Party of Japan.

Fujita emphasized that there was never an official police investigation into the deaths of the 24 Japanese citizens who were killed on 9/11.

He stated that many in the US doubt the official version of 9/11 and numerous individuals have collected evidence that contradicts the government's version, which can be seen on many websites.

During his speech, an aide showed several larges photos of:
- the Pentagon entry and exit hole and a scale overlay of a 757
- the flight path towards the Pentagon
- the WTC Twin Towers exploding
- the WTC 7 collapse
- the early announcment of the collapse of WTC 7 by the BBC and CBS

He demanded further investigation of 9/11.

This issue is being raised now as part of the discussion of whether Japan should increase its military and financial support of the "War on Terror"

(Source of subtitled videos: - rep.)

Videos with English Subtitles:

This second set of videos (Dawasa1357) better because it appears to be directly from NHK, and doesn't have all the links that include iffy websites.

Japanese Diet discussing the Twin Towers and questioning 9-11. With English subtitles. Fulford Translation....9-11 investigation Japan false flag terror
Part 1 of 8 -- 04:46

The historic full-length Parliamentary debate, unedited for television, is available at:

The first session of the Japanese Defense and Foreign Affairs Committee features Mr. Yukihisa Fujita exposing the military treason of the U.S. government in the events of Sept. 11, 2001 and the insider trading on the stock market.

Japanese Language with English Subtitles.

Part 7 "War on Terror" we need to question.

Forum discussion here with English Transcripts

Yukihisa Fujita is one of the five Directors of the Committee on Foreign Affairs and Defense of the House of Councillors (the upper body of Japan's legislature). (Link to Committee)

This committee has 21 members. The Chairman of the committee and the four other Directors are also members of Fujita's party (DPJ).

I'm hopeful this will result in Fujita's concerns about 9/11 being taken seriously.

The DPJ is the opposition party to current Prime Minister Fukuda. The DPJ has a majority in the House of Councillors, but are in the minority of the House of Representatives (the lower body of the legislature).

Fujita was elected to the House of Councillors in 2007 and has five more years to serve in his 6-year term
The Upper House, or House of Councillors (Sangi-in), has 242 members, who are each elected for a six-year term. Of this number, 146 members are elected in prefecture-based constituencies, mostly multi-seat, and 96 by proportional representation at the national level. One half of the Upper House is automatically dissolved for election every three years. Since the most recent half-Upper House election was held in July 2007, the next must be held in June or July 2010.









Transcript Of Japanese
Parliament's 911 Testimony
From Benjamin Fulford

Below is a transcript of testimony in the Japanese Parliament that was broadcast live nationwide on NHK television. The Member of Parliament talking about 911 is Yukihisa Fujita from the Democratic Party of Japan. After the testimony Mr. Fujita says he got lots of phone calls from other members of Parliament thanking him for having the bravery to bring up 911 in Parliament. He also got one death threat.

Meanwhile, I asked the Foreign Correspondents Club of Japan to invite him for a press conference. Each of several attempts to send an e-mail to the FCCJ about this resulting in my hotmail account freezing and my computer crashing. Also, it was amazing to watch the shameless verbal acrobatics of American corporate journalists trying to prevent this press conference from taking place. Fortunately, journalists from the rest of the world supported a press conference and we will try to get it to take place as soon as possible.

The secret government's control of Japan is falling apart. A few weeks ago one of Japan's leading commercial TV networks also broadcast a 911 truth program during prime time. One other national network and several local networks have also broadcast such programs.

The people of Japan do not want to finance genocidal mass murderers any more///

Head of the committee: We will now begin the first session of the defense and foreign affairs committee.

We will now start discussing the special anti-terror law. .We now call on Mr. Yukihisa Fujita

Fujita standing in front of microphone: .

This will be the last televised broadcast of this committee for so I would like to talk about the origin of the war on terrorism which was the attacks of 911. On September 11 of 2002 I went to a theater house for a charity concert to help build a school in Afghanistan. They chose to have the charity concert on that day as a gesture of respect for the dead. Normally 911 commemorative events are for the people who died in New York but the people who held this event decided that more innocent people died as a result of 911 in Afghanistan than in New York. So they built a grade school near where the statue of Buddha was destroyed in Bamiyan. The name of the school is "the school of hope." They also lit candles to commemorate the dead both in Afghanistan and in New York in the year 2002, one year after the attacks. So, when discussing these anti-terror laws we should ask ourselves, what was 911, what is terrorism? So today, I would like to talk about the beginning of the war on terror.

So, I would like to ask the people who call this law an anti-terror law to realize that the biggest victim of the war on terrorism has been Afghanistan so I believe helping the people of Afghanistan should be our biggest priority. I would like to ask Mr. Inuzuka about this.

Tadashi Inuzuka walking to the microphone:
As Mr. Fujita says the main purpose of this law is to provide peace and security to Afghanistan. And, as he says, the biggest sufferers have been the people of Afghanistan. Afghanistan has 1.7 times the land area of Japan and 20 some million people live there. Also, because of a drought on the Eurasian continent close to 5 million have died due to water shortages. Even now 1 million people live close to the main battlegrounds. So, the main purpose is to provide stability to those war zones so in that context what should Japan do? However, instead of providing support by providing fuel to the U.S. forces we at the Democratic Party have decided that providing water is more important. The philosophy behind our anti-terror law is to get the ruling party to help deal with this problem.

Head of the committee: Mr. Fujita

Mr. Fujita:

I would like to talk about the origins of this war on terrorism. You may recall that in November I asked you if terrorism was war or if it was a crime. And the whole start of this war on terrorism was 911. What I want to know is if this event was caused by Al Qaeda or not. So far the only thing the government has said is that we think it was caused by Al Qaeda because President Bush told us so. We have not seen any real proof that it was Al Qaeda. I would like to know why the Prime Minister thinks it was the Taliban who was responsible for 911. Committee Chief, I want to ask the Prime Minister because he was chief cabinet officer at the time.

Prime Minister Fukuda:

Since the attacks we have communicated with the U.S. government and other governments at different levels and exchanged information. According to secret information obtained by our government and reports put together by foreign governments the 911 attacks were carried out by the international terrorist organization known as Al Qaeda.

Mr. Fujita:

So, you are talking about both secret and disclosed information. My question is has the Japanese government carried out its own investigation using the police and other resources? It is a crime so surely an investigation needs to be carried out. When a Japanese journalist was shot in Myanmar you carried out an investigation. In the same way over 20 Japanese people died on 911 so surely the government carried out its own investigation and decided that Al Qaeda was responsible. So, what kind of investigation did you carry out? At the time you were Chief Cabinet Secretary so surely you would know better than anybody so I want to ask you about your investigation.

Prime Minister Fukuda:

After the 911 attacks the National Police Agency sent an emergency anti-terror team to New York. They met with U.S. government officials and gathered information about missing Japanese.

Mr. Fujita:

So you are saying over 20 people died as a result of a crime and most of those people were working in New York. Also there were some Japanese who died in the four airplanes that were hijacked. I would like to know exactly how many people died in the buildings and how many died in the airplanes. I also want to know how you confirmed this. I would like the Foreign Minister to answer for me.

Foreign Minister Masahiko Komura standing at right in front of microphone:

We found the bodies of over a dozen Japanese following the simultaneous terror attacks carried out on September 11 2001. We were also informed about the death of 11 more people by the U.S. authorities. In total 24 Japanese died in those attacks. Of those 2 were in the airplanes.

Mr. Fujita:

I would like to ask what flights the two Japanese who died in the airplanes were on and how you determined who they were. If the foreign minister does not know it is OK to get a bureaucrat to answer:

Foreign Ministry division chief Ryoji Tanizaki:

Since this a question of fact, I will answer. As the Foreign Minister said, of the 24 people who died two were on the airplanes. One of them was on United Flight 93 and the other was on American airlines flight 11.As for how we know this, well I do not have the information in front of me but we were told by U.S. authorities and, in general, they use DNA testing. So we believe that is how we know about those two people.

Mr. Fujita:

So you are saying you do not know because you do not have the documents. Also, you say you believe there was DNA testing but you do not know. So what I want to say today is that this was a crime and crimes are supposed to be investigated. So the government needs to inform the victims families of the results of their investigation. Also, instead of just observing the anniversary of 911 every year you must be gathering information and reacting to it. So, during the past six years have you been supplying the families of the deceased with information? I would like to ask the Foreign Minister to answer.

Foreign Minister Masahiko Komura:

So you do not want to ask any more about how we confirmed the deaths of Japanese but want to know about reports to the victims families? We provided the families with information about the bodies and about compensation funds. Also, for the 13 Japanese whose remains we found, we helped the families deal with the bodies. We also financial support visits to the World Trade Center site for the families on every anniversary.

Mr. Fujita:

Since I do not have much time I would like to ask about the suspicious information being uncovered and the doubts people world wide are having about the events of 911. Many of these doubters are very influential people. In such circumstances I believe the Japanese government, which claims the attacks were carried out by Al Qaeda, should be providing the victims families with this new information. In that context I would like to ask several questions.

First of all I would like to get all members of the committee to look at this panel and look at the pictures I have provided you with. This is concrete evidence in the form of photographs and other types of information. The first photograph has computer graphics attached to show how large the plane that hit the Pentagon was. A 757 is quite a large airplane with a width of 38 meters. So as you can see even though such a large plane hit the pentagon there is only a hole that is too small for the airplane. This is a photograph taken of firemen at work and you can also see there is no damage of the sort an airplane that large should make. I would also like you to look at the lawn in front and notice that there are no airplane parts on it. Let us now look at the third picture, which is also of the pentagon taken from a U.S. TV news report has captions that show the roof of the Pentagon is still intact. Again even though a huge airplane is supposed to have hit, there is not enough corresponding damage. Now let us move to the next photograph. Here is a photograph of a hole, as Minister Komura knows the Pentagon is a very strong building with many walls. Yet the airplane has pierced them. But as you know, airplanes are made of the lightest possible material. An airplane made of such light material could not make a hole like that. Next I would like to show a photograph of how the airplane hit the building. The airplane made a U-turn, avoiding the Defense Secretary's office and hitting the only part of the Pentagon that had been specially reinforced to withstand a bomb attack.

Also, in the middle of page five we have a comment from a U.S. airforce official. He says I have flown the two types of airplane used on 911 and I cannot believe it would be possible for someone who is flying one for the first time to be able to carry out such a maneuver. Also, as you know, they have not recovered the flight recorders from most of these 4 airplanes. Also, there were more than 80 security cameras at the Pentagon but they have refused to release almost all of the footage. In any case, as you have just seen there is no picture of the airplane or of its wreckage in any of these photographs. It is very strange that no such pictures have been shown to us.

As you know Japan's self-defense forces have their headquarters in Ichigaya. Can you imagine if an airplane hit a major city, if an hour and a half after an airplane hit New York that an airplane could hit the Pentagon? In such a situation how could our allies allow such an attack to take place. I would like the Defense Minister to answer this.

Defense Minister Fuyushiba Ishiba:

I have not prepared so I will have to answer ad-lib. If such a situation took place then the airforce would send fighters up to shoot down any airplanes. This is what happened with an attack on the German constitutional court. In the case of Japan our reaction would depend on what kind of airplane it was, who was flying it and what their purpose was. However, according to our laws it might be hard to order an airplane to be shot down just because it was flying at a low level. We would probably have self-defense forces fly with it and ask for a cabinet decision. Since an airplane would have many people on board we would have do discuss what to do. This happened a long time ago but a Cesna airplane was flown into the house of a person called Yoshio Kodama. There was also an All Japan Airways flight bound for Hakodate that was hijacked and had the pilot killed. It would be best if such a thing never happened but we need to prepare new laws for such situations and discuss them in Parliament.

Mr. Fujita:

Since we are running out of time I would like to present a new piece of evidence. Please look at this panel. The first picture is one you see often of the two towers that were hit by hijacked airplanes. I could understand if this happened right after the airplanes hit but here we can see large piece of material flying a large distance through the air. Some flew 150 meters. You can objects flying in this picture as if there was an explosion. Here is a picture I took from a book. This lets you see how far the objects flew. The third picture is of a fireman who was involved in the rescue talking about a series of explosions in the building that sounded like a professional demolition. We cannot present video today so I have written a translation of what the fireman said. Here his is saying "it went boom boom boom like explosions were going off."

Here is something said by a Japanese research team of officials from the fire department and the construction ministry. The interviewed a Japanese survivor who said that while she was fleeing there were explosions. This testimony appears in a report prepared with the aid of the construction ministry and the fire department. Now I would like you to see the following picture. Normally it is said that the twin towers collapsed because they were hit by airplanes. However, one block away from the twin towers is building number 7. It can be seen in the following map a block away from the WTC. This building collapsed 7 hours after the WTC buildings were attacked. If I could show you a video it would be easy to understand but take a look at this photograph. This is a 47 story building that fell in this manner (He drops and object to demonstrate). The building falls in five or six seconds. It is about the same speed as an object would fall in a vacuum. This building falls like something you would see in a Kabuki show. Also if falls while keeping its shape. Remember it was not hit by an airplane. You have to ask yourself if a building could fall in that manner due to a fire after 7 hours. Here we have a copy of the 911 commission report. This is a report put out by the U.S. government in July of 2004 but this report does not mention the collapse of the building I just described. It is not mentioned at all in here (he waves the book). FEMA also issued a report but they also fail to mention this building. Many people believe, especially after seeing the story about building number 7, that something is strange. Since this is an incident where many people died people think is should be investigated.

We are running out of time but I would also like to mention the put options. Just before the 911 attacks, ie on September 6th, 7th and 8th there were put options put out on the stocks of the two airlines United and American that were hit by hijackers. There were also put options on Merril Lynch, one of the biggest WTC tenants. In other words somebody had insider information and made a fortune selling put options of these stocks. The head of Germany's Bundesbank at the time, who is equivalent to the Governor of the Bank of Japan, said there are lots of facts to prove the people involved in the terror attacks profited from insider information. He said there was lots of suspicious trading involving financial companies etc prior to the attacks. The had of the Bundesbank was willing to say this much. I would like to ask the Finance Minster about these put options. Did the government of Japan know about this, and what do you think about this? I would like to ask Finance Minister Nukaga about this.

Finance Minister Fukushiro Nukaga:

I was in Burkina Fasso in Africa when I heard about this incident. I decided to fly immediately to the U.S. but when I got to Paris I was told there were no flights to America. So I only heard what was reported later about the facts. I know there have been reports about the points you raise. So we made it obligatory that people provide ID for securities transactions and for suspicious transactions to be reported and we made it a crime to provide money to terrorist organizations. We believe the international financial system should not be abused. In any case, terrorism is a horrible thing and must be condemned. This type of terrorism cannot be stopped by one country but needs to be stopped by international society.

Mr. Fujita:

I would like to ask finance specialist Mr. Asao to tell me about put options. A group of people with large amounts of money, clear insider information and financial expertise would have been necessary for such a thing to take place. Could a few terrorists in Afghanistand and Pakistan carry out such a sophisticated and large scale set of transactions? I would like to ask Mr. Asao to respond.

Keiichiro Asao:

I understand put options are a deal to sell stocks at a fixed price. In this case somebody must have had insider information to carry out such transactions because nobody could normally predict these airlines would have their planes hijacked. So, I believe this was certainly a case of insider trading.

Mr. Fujita:

Prime Minister, you were Chief Cabinet Secretary at the time and as somebody has already noted, this was an incident of the sort that humanity had never previously experienced. Also, there appears to be a lot more information about this incident coming out now than came out in the months after the attacks. Now that we are an internet and visual society, this information is being made public so if we look at the situation now, the whole starting point for these two laws , the start of the war on terror itself, as you have seen from the information I have presented, has not been properly investigated or analyzed. So I do not believe the government has acted properly by investigating this incident or asking the U.S. government for an explanation. So far we have not started refueling U.S. ships yet so I think we need to go back to the beginning and not just simply and blindly trust the U.S. government explanation and indirect information provided by them. There were too many victims so I think we need to start again from the beginning. We need to ask who the real victims of this war on terrorism are. I think the citizens of the world are its victims. Here in Japan we have disappearing pensions and disappearing records about victims of Hepatitis C contaminated blood but everything I have presented on facts and confirmable evidence. Let us talk about the vanishing black boxes, vanishing airplanes and vanishing remains. Also lots of the remains of these buildings have disappeared. Even FEMA says that prevented it from carrying out a proper investigation. We need to look at this evidence and ask ourselves what the war on terrorism really is. I can see the ministers nodding in agreement but I would like to ask Prime Minister Fukuda. Please look at me. I have heard that when you were Chief Cabinet Minister at the time you felt many strange things about these attacks. Do you not think it was strange?

Prime Minister Fukuda:

I never said I thought it was strange.

Mr. Fujita:

Prime Minister what about the origin of the war on terror and the idea of whether it is right or wrong to participate in it? Is there really a reason to participate in this war on terror? Do we really need to participate? I would also like to ask about how to really stop terrorism.

Prime Minister Fukuda:

We believe based on evidence provided to us by the U.S. government that the attacks of 911 were carried out by Al Qaeda. We need to put an end to Al Qaeda terrorism. That is why international society is united in the fight against terrorism. Here, concerning a law passed by the Democratic Party last year and based on UN resolution 16595. This is a resolution passed in response to the terrorist attacks on the U.S. So you passed the law agreeing with the UN didn't you?

Mr Fujita:

Did you confirm about the bodies and the facts behind the resolution because that is why you claim to be participating in this war on terrorism. So I believe to end terrorism we need to pass a law that actually helps the people of Afghanistan. I would like Mr. Inuzuka to talk about the law and about the fight against terrorism.

Tadashi Inuzuka:

Among the many problems raised by MP Fujita the thing we need to worry most about is that the people in Afghanistan can live in peace and without worries. That is the core of the issue of ending terrorism. Without discussing this but just operating behind the back lines by supplying oil and not thinking about the entire situation or the people involved it is nonsense to debate this law. This law should be made for peace and security in Afghanistan. Our country needs to pass a real anti-terror law.


Political Overview

System of Government

Japan is a democratic, constitutional monarchy which maintains an Imperial Family, headed by the Emperor, currently Emperor Heisei, and operates under a cabinet system headed by a Prime Minister. Executive power is vested in the Cabinet. The Prime Minister is selected from among members of parliament by a vote by both houses of the Diet (parliament). The Prime Minister submits bills to the Diet, reports to the Diet on domestic and foreign issues, and supervises and controls administration. The Japanese Constitution specifies that the majority of Cabinet members must be elected members of parliament. In addition, however, the Prime Minister can appoint non-politicians to the Cabinet and as Special Ministers of State. A recent, example of a high-level, non-political appointment was university academic Hiroko Ota who was appointed initially as Minister of State for Economic and Fiscal Policy by former Prime Minister Abe and reappointed to the position by Prime Minister Fukuda. There is no term limit for prime ministers, although under the rules of the Liberal Democratic Party (LDP), party presidents (who have also been the Prime Minister when the LDP has held government) are limited to two terms of three years each.

Government Structure

Japan’s governmental structure has three tiers: national, prefectural and local. Beneath the Tokyo-based national government there are 47 prefectures and beneath these, 1,788 local municipalities. Each tier is governed by elected assemblies. The implementation of “Trinity Reforms” promoting decentralisation during the Koizumi era aimed to give prefectural and local governments more autonomy, particularly in terms of operational finances, but these still have some way to go. The two lower tiers of government remain to a large extent fiscally dependent on the national government.

At the national level, the conservative Liberal Democratic Party has been in power almost continuously since the mid-1950s. At the lower levels of government, however, voters have regularly voted in governments of different political leanings. Recent years have seen rapid progression in the merger of many local municipalities, primarily in pursuit of improved governance and greater economic efficiency.

Political Parties

The post-war history of political parties in Japan shows frequent splits and mergers, a trend which has continued until the present. But for most of the post-war period the Liberal Democratic Party (LDP), the New Komeito (formerly the Komeito), the Social Democratic Party (formerly the Japan Socialist Party), the Japan Communist Party and some other smaller groupings of politicians have consistently maintained themselves as political entities. The Democratic Party of Japan (DPJ), currently the largest opposition party, was formed through the merger of a number of smaller opposition parties in 1998, and strengthened by a further merger with the Liberal Party (led by current DPJ-leader Ozawa) in 2003.

Representation by female parliamentarians at the national level stands at about ten per cent. Although not common, naturalised foreigners and ethnic minority representatives have been elected as politicians, a notable recent example being the 2002 election of the Finnish-born naturalised Japanese citizen Mr Marutei Tsurunen who was elected to the House of Councillors as a member of the Democratic Party of Japan (and re-elected at the July 2007 Upper House election). Universal suffrage is limited to citizens of Japan aged 20 years or older; voting is voluntary and actual voting rates vary widely.

As of late 2007, in the Lower House, or House of Representatives (Shuugi-in), there were eight political parties and groupings. Of the 480 seats in the Lower House, 300 members represent single-seat constituencies and 180 members represent proportional seats in 11 regional bloc districts. In this system, voters vote once for a candidate in their local constituency, and once for a party. Local constituencies are decided by plurality, and the block seats are then handed out to the parties proportionally (by the D'Hondt method). The table below shows the relative strengths of the political parties in the Lower House, and the numbers of female members of parliament.

The electoral term for the Lower House is four years, although political conditions frequently see the House dissolved earlier. The most recent election for the House of Representative was held in September 2005, which means that the next election must be held by September 2009.

Political Parties – House of Representatives (Lower)

Number of MPs

(Female MPs)

Liberal Democratic Party & Affiliated

Independents Group

305 (27)

Democratic Party of Japan & Affiliated

Independents Club

113 (10)

New Komeito

31 (4)

Japan Communist Party

9 (2)

Social Democratic Party

9 (2)

People’s New Party, Sōzō, Independents Group

6 (0)

Unaffiliated Independents

9 (0)


480 (45)

(Source: House of Representatives, October 2007)

The Upper House, or House of Councillors (Sangi-in), has 242 members, who are each elected for a six-year term. Of this number, 146 members are elected in prefecture-based constituencies, mostly multi-seat, and 96 by proportional representation at the national level. One half of the Upper House is automatically dissolved for election every three years. Since the most recent half-Upper House election was held in July 2007, the next must be held in June or July 2010. The table below shows the relative strengths of the political parties in the Upper House, and the numbers of female members of parliament.

Political Parties – House of Councillors (Upper)

Number of MPs

(Female MPs)

Democratic Party of Japan, Shin-Ryokufukai, Nippon Shinto, People’s New Party

119 (22)

Liberal Democratic Party & Independents Group

84 (12)

New Komeito

21 (5)

Japan Communist Party

7 (1)

Social Democratic Party & Goken Rengo (Protect the Constitution League)

5 (1)

Unaffiliated Independents

6 (2)


242 (43)

(Source: House of Councillors, October 2007)

Government Policy Making

In terms of government policy making Japan’s bureaucracy takes a comparatively forward role and has a high degree of discretionary authority. The majority of government policy originates within government ministries which have jurisdiction over the area in question. Once policy proposals have been developed within the ministry, the ministry then further refines it through consultations with other concerned ministries and agencies.

From an early stage, ministries consult with the relevant policy committees of the ruling party. During this process, bureaucrats take into account the findings of deliberative councils and advisory councils, which consider the views of distinguished academics, experts and the leaders of major businesses and interest groups. On occasion, senior representatives of foreign companies based in Japan have been asked to give advice to these councils.

In the actual drafting of legislation, parliamentary committees typically play a more prominent role than do plenary sessions, where the Diet’s entire Upper or Lower house will sit to debate a bill. The normal procedure is for Cabinet or private members to submit for debate bills to standing and specialist committees. The memberships of the committees are allotted according to the strength of each party in the chamber.

Once a committee has passed a bill, which it may have amended, it sends it to its respective chamber for voting. If it passes, the bill will then be passed to the other chamber for voting. A bill voted down in the Upper House, or debated in the Upper House for 60 days without vote, can be passed by reintroducing it to the Lower House and passing it again with a two-thirds majority of votes. This practice of “ramming through” legislation, however, is not nearly common as would be expected, largely because its use attracts strong public and media criticism.

As in other industrialised liberal democracies, the Japanese government consistently attempts to satisfy many of the demands of the business sector and to provide an environment that maintains business confidence. Similarly, there is also a strong tradition of political activity by civil organisations and interest groups, which exert power through lobby activities, participation on government deliberative councils, and voting. Japan’s media is frequently outspoken on political issues and it also exerts a significant influence on policy making.

The office of the Prime Minister has been relatively weak compared with that in other industrialised countries owing to the collective nature of Japanese politics and the strong tradition of personality-based party factionalism, although the latter waned significantly over the period of the Koizumi government, during which policy-making power became much more focused on the Prime Minister’s Office. Liberal Democratic Party politicians who have developed a special relationship with a particular sector, such as the construction lobby, also contribute to drafting policy (usually to promote the interests of that particular sector) through the Party’s influential Policy Affairs Research Council.

Recent Political Developments

Recent developments in politics include the landslide victory of the DPJ in the July 2007 Upper House election, the subsequent resignation of former Prime Minister Shinzo Abe and inauguration of Yasuo Fukuda as Japan’s 92nd Prime Minister, the coming into force of the privatisation of Japan Post (Japan’s largest financial institution), the lapsing of the Anti-Terrorism Special Measures Law which allows Japanese support of coalition operations in Afghanistan (and the subsequent cessation on 1 November of Japan’s Maritime Self-Defence forces refuelling operations in the Indian Ocean), a series of “money politics” allegations involving senior politicians and government bureaucrats, debate over amendment of the post-war Japanese Constitution, and the government’s misplacing of millions of pension account records.

The DPJ’s Upper House election win has had significant consequences for national politics since the ruling coalition has now lost its control of the Upper House – a situation which may continue until 2010. This means that legislation passed in the Lower House by the ruling coalition is no longer readily passed by the Upper House. This has resulted in a shift in the government’s policy making process that formerly was solely an intra-ruling coalition process to seek to include negotiation with the Opposition.

Other themes that appear regularly in Japan’s political agenda include the management of pension funding commitments, protection of the environment, freedom of information, immigration policy, energy security and industrial pollution, local autonomy and taxation powers, education, the economic distribution of wealth, government spending priorities and regional economic stimulation, limits to military spending, use of symbols of Japanese nationhood such as the Japanese flag and anthem, deregulation of highly-regulated industries, tax reform including raising the consumption tax, protectionism and agriculture, the internationalisation of Japanese industry, education, foreign relations, territorial disputes, and commitments to and expectations of the United Nations, including Japan’s quest for permanent membership of the UN Security Council.

Economic Overview


In 2006, Japan was the world’s second-largest economy measured in US dollars and the fourth-largest economy measured in purchasing power parity (PPP) terms. Japan increased its prominence in the global economy during the post-war period. Historically, the primary drivers of Japan’s strong economic growth have been high rates of investment in productive plant and equipment, the application of efficient industrial techniques, a high standard of education, good relations between labour and management, ready access to leading technologies and significant investment in research and development, an increasingly open world trade framework, and a large domestic market of discerning consumers, which has given Japanese businesses an advantage in scale of operations. Many of these attributes remain relevant to Japan’s economic growth.

Manufacturing has been the most remarkable, and internationally renowned, feature of Japan’s economic growth. Today, Japan is a world leader in the manufacture of electrical appliances and electronics, automobiles, ships, machine tools, optical and precision equipment, machinery, chemicals, and iron and steel. However, in recent years Japan’s economic advantage in manufacturing has somewhat ceded to Korea, China and other low-wage manufacturing economies. Japanese firms have countered this to a degree by transferring manufacturing production to those countries. Japan’s services sector, including financial services, now plays a far more prominent role in the economy and accounts for about 70 per cent of GDP. The Tokyo stock exchange has become one of the world’s foremost centres of finance.

International trade contributes significantly to the Japanese economy. Japan has consistently run trade surpluses since 1981. Exports are a large contributor to GDP. In 2006 key exports were transportation equipment (24.2%), electrical machinery (21.4%), non-electrical machinery (19.7%) and chemicals (9%). In the same year, the major export destinations were the United States (23%), China (14%), South Korea (8%) and Taiwan (7%). Japan’s imports in 2006 were dominated by mineral fuels (28%), electrical machinery (13%), non-electrical machinery (9%) and food (9%). Its leading suppliers were China (21%), the United States (12%), Saudi Arabia (6.4%) and the United Arab Emirates (6%). Recent trends in Japanese trade and foreign investment have reflected a much greater engagement with China. Australia was Japan’s fifth largest import source country.

In some respects, Japanese consumers have been regarded as being among the most discerning in the world. Until recently, they have also been among those most inclined to save their wealth, mainly in the form of low-interest bearing deposits.

Current Performance

In 2006 Japan’s GDP was US$4,155 billion, accounting for around 6.2 per cent of total world GDP, while per-capita income was approximately US$32,529, both measured in PPP terms (US$4,368 billion and US$34,200 at current exchange rates). In the same year, real GDP growth was 2.2 per cent, consumer price index growth was 0.2 per cent, unemployment was 4.1 per cent, and the current account surplus was 3.9 per cent of GDP.

The Japanese economy began to emerge from a prolonged period of recession and deflation in 2003. In July 2006 the Bank of Japan raised the target interest rate from zero to 0.25 per cent. As the first interest rate increase for more than five years, this signalled a return to a more normalised monetary policy. Economic recovery has been balanced between external and domestic demand. The financial and corporate sectors continue to strengthen, and banks’ non-performing loans continue to fall, and business confidence has remained firm through 2007.

In 2006 total business investment continued to trend upwards with an annual gain of 7.6 per cent, and industrial production increased by 4.8 per cent. New car registrations dipped slightly to 3.1 million while housing starts increased incrementally to 1.29 million. Many of Japan’s world-class corporations are now performing well, but tens of thousands of large and small businesses continue to struggle, particularly in the retail, construction and financial sectors. This has had negative implications for employment and income in those sectors and is contributing to a growing ‘dualism’ in the labour market. But it may be also contributing to a growing appreciation among Japan’s economic managers that they must seek new ways of generating profits, such as affiliations and trading relationships with foreign firms.

Future Outlook

Looking ahead to 2008, the consensus of leading Japanese and foreign economic research institutes regarding the future outlook for the Japanese economy is for comparatively low but steady growth. The average value of forecasts of nineteen of Japan’s leading domestic and foreign economic research institutes of GDP growth in 2008 is 2.1 per cent, private consumption is 1.8 per cent, business investment is 4.3 per cent, and industrial production is 3.1 per cent. For the same year, the average forecast for the Japanese consumer price index (inflation) is 0.4 per cent. The 2008 estimates for new car registrations is 3.0 million and for housing starts is 1.27 million dwellings.

Major features of the outlook for regulatory changes and market conditions include: the commencement in October 2007 of the privatisation of Japan Post, one of the country’s largest financial institutions; and the continuation of the government’s five-year plan to increase flows of inward foreign direct investment (FDI) to ¥26.4 trillion (approximately US$264 billion) by 2011 (from ¥11.9 trillion at end-2005).

In the near future, the Japanese economy will also be affected by recent and significant revisions to corporate law and practices. These include the Company Law (2006) which has made it much easier to establish a business in Japan, the Design Law (2006) which has extended the protection of designs from 15 to 20 years, the Unfair Competition Law (2005) which has increased protection afforded to trademarks, and the Customs Tariff Law (2006) which has enhanced intellectual property rights.

In terms of the medium-term outlook, the main features, challenges and recommendations for the Japanese economy as assessed by the International Monetary Fund in August 2007 were as follows:

The outlook for Japan’s economic expansion, which has entered into its sixth year, remains favourable. Growth will be increasingly driven by domestic demand. While fiscal consolidation has proceeded faster than expected, the public debt ratio is still high. Japan, therefore, should consider a faster pace of fiscal consolidation which would buy it “policy insurance” against shocks and help cope with the cost of population aging. Among the possible measures to achieve this, raising the consumption tax could be more equitable and supportive of growth. Seeing few signs of inflation pressures or worrisome financial imbalances, the Bank of Japan has opted for a very gradual pace of tightening. Japan’s financial policies are focused on the challenges ahead. But a growing appetite for risky assets – both domestic and foreign – calls for continued vigilance and sound risk management. Japan continues to make progress in structural reforms, and initiatives are underway to streamline product regulation, reform the public sectors, improve labour utilisation, and foster competition and trade. Broader structural reforms, however, are needed to boost productivity and competitiveness. The reform priorities are to increase labour market flexibility and promote competition through greater market opening and further deregulation. (See the Executive Summary, Japan: 2007 Article IV Consultation – Staff Report, IMF Country Report No. 07/280, August 2007.)

Key Economic Indicators

The following key economic indicators are given for the years 2005 and 2006; the average (mean) estimates of nineteen leading Japanese and foreign economic research institutes have been given for 2007.

Average % Change on Previous Year / Annual Total



2007 (est)





Private Consumption




Business Investment




Industrial Production




Consumer Prices




New Car Registrations

3.4 million

3.1 million

2.9 million

Housing Starts

1.24 million

1.29 million

1.26 million

Source: Consensus Economics Inc. 2007

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