Yoshihiro Sakai
Yoshihiro Sakai
Yoshihiro Sakai is adviser to the Office of the President at the University of Tokyo. He is a former market operation officer at the Bank of Japan and a senior economist.

Japan is paying the price of its tough stance against Russia as it faces a weakening yen and rising tensions with Moscow over the disputed Northern Territories. Add to this a yawning trade deficit and reluctance to tighten monetary policy, and Japan could see the yen lose value even further.

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Kishida wants to focus on post-pandemic growth and sustainability, and that may mean more dealings with China. He cannot afford to fuel tensions with Beijing by taking sides with Washington and is treading a fine line on issues such as Taiwan, Xinjiang and the Olympics.

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Expect Fumio Kishida to take a more progressive approach to issues around Japan’s sluggish economy and foreign affairs. Enacting his policies will require greater trade and investment, and he is likely to look to China for both once his election victory is secured.

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Vehicle exports keep Japan’s economy afloat, but new regulations could put a million jobs and Japan’s trade surplus at risk. Calculating the environmental impact of a car’s entire life could cripple carmakers unless the government changes Japan’s energy mix.

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As calls mount for the Tokyo Olympics to be cancelled or postponed, the Japanese government’s mishandling of the coronavirus crisis has come into sharp focus.

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Political watchers are expecting Yoshihide Suga to choose between the US and China amid heightened US-China rivalry. But Japan’s new leader is a realist who has what it takes to continue the country’s strategy of dual diplomacy.

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