The Journal The Authority on Global Business in Japan

Financial Services Agency
Vexed report helped assets

When the Financial Services Agency (FSA) issued a controversial report in June saying that a married couple living to age 95 would require savings of ¥20 million, something rarely observed in politics was heard: nume­rous voices expressed sympathy for the agency. The opposition parties reacted furiously and FSA head Taro Aso refused to accept the report, setting off another flurry of political conflict.

One problem with the report was that portions did not provide enough detail. For example, based on the assumption that an elderly couple’s assets would decline at the rate of about ¥50,000 per month, the report’s authors predicted a ¥13–20 million post-retirement shortfall. With pension and savings, however, the actual deficit would likely be less. Aso pushed for revisions and thought a considerate explanation would be sufficient to allay anxieties among the public.

Essentially, the message of the report was straightforward: in an era when lifespans approach or surpass the century mark, “people are going to need more funds than before.” But this sounded an alarm. Today, about half the population has assets in the form of bank deposits.

Worry over insufficient assets is a global problem. The issue was raised—and a lively and wide-ranging discussion ensued—at a symposium in June attended by G20 finance ministers and central bank directors.

Of particular interest is the strong emphasis on the importance of “the female perspective,” which was raised by many experts from around the world. In many countries, fewer women than men hold jobs and women’s wages are lower than those of men. But women tend to live longer, so the risk is greater for them if retirement funds fall short.

That particular perspective was not touched on in the “problematic” report, and the point was also not raised by any of the opposition parties. Rather than examining the true state of the matter, debate developed into an unruly squabble, exposing the intolerably low level of many politicians, who appear to harbor no concern other than how they appear to their constituents.

Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
JR, Shizuoka clash over high-speed train

Controversy has arisen over the Chuo Linear Express, the new high-speed train utilizing maglev technology that will connect Tokyo and Nagoya. Shizuoka Prefecture and JR Tokai Railway Company have been at odds over construction of the Minami Alps Tunnel, which has been running behind schedule and threatening the 2027 completion target.

Another disagreement arose recently over insufficient measures by Shizuoka Prefecture to reduce the volume in the Oikawa River channel. MLIT has adopted a hands-off posture up to now, but may be drawn into the conflict.

A MLIT supervisor said, “From the perso­nality and character of Shizuoka’s governor, we should have anticipated these sorts of problems.” His view was that to resolve the matter, JR Tokai should make at least some concessions.

But JR Tokai seems to be showing no such inclination, leading to further friction. President Shin Kaneko, voiced his con­cerns over the impact of the delay at a press conference at the end of May. One month later, he said, “We are proceeding in accordance with national policy,” indicating that his hardline stance would continue.

MLIT conceded that JR Tokai’s remarks are factual and that the ministry has no problem with them, but said that they were ill-timed and failed to consider the other party’s feelings, thereby risking to aggravate the problem.

Many are said to share the view that MLIT’s intervention cannot be avoided if the standoff is to be overcome.