Visit to the United States: Second Day
Cabinet Secretariat, Wednesday, April 18, 2018
[Provisional Translation]
On April 18, 2018 (local time), Prime Minister Shinzo Abe, who is visiting Palm Beach, Florida in the United States of America, played golf with the Honorable Donald J. Trump, President of the United States. Afterwards, Prime Minister Abe held talks and a joint press conference with President Trump.
In the evening, Prime Minister Abe attended a dinner with President Trump and the First Lady.
Visit to the United States: First Day
Cabinet Secretariat, Tuesday, April 17, 2018
[Provisional Translation]
On April 17, 2018 (local time), Prime Minister Shinzo Abe visited Palm Beach, Florida in the United States of America.
Prime Minister Abe visited Male-A-Lago, which is the estate owned by the Honorable Donald J. Trump, President of the United States, and held talks with the President. Following that, the Prime Minister attended a dinner with President Trump and the First Lady.
Press Occasion on the Visit to the United States
Cabinet Secretariat, Tuesday, April 17, 2018
[Provisional Translation]
On April 17, 2018, Prime Minister Shinzo Abe held a press occasion at the Prime Minister’s Office.
Regarding his visit to the United States, the Prime Minister said,
“Various issues have been pointed out concerning government affairs. The government cannot do without the trust of the public. To gain the confidence of the public, I, as the head of the government, am determined to responsibly ensure that the whole truth is uncovered for each and every issue and to clean out the stables.
I am heading to the United States today and will hold a Japan-U.S. summit meeting with President Trump over the course of two days. I intend to confirm our bilateral cooperation on the North Korean issue as well as the economic issues, and to convey the robust ties of the Japan-U.S. Alliance.
I would also like to confirm that we will continue to apply maximum pressure on North Korea towards its abandonment of nuclear weapons and missiles in a complete, verifiable and irreversible manner. In addition, with respect to the abduction issue, which is our greatest priority, the first U.S.-North Korea summit meeting will be convened; prior to this summit meeting, I will do my utmost to ensure that progress is made towards the resolution of the abduction issue and coordinate our efforts with President Trump.
With regard to the economic issues, I hope to exchange views based on our common understanding that Japan and the U.S. will play leading roles in the economic growth of the Indo-Pacific region through free and fair trade and investment.
There will be various opportunities for discussion over the two days, and I hope to engage in extensive and candid dialogue with President Trump on issues relating to North Korea and the economy.”
Courtesy Call from the State Councilor and Foreign Minister for China
Cabinet Secretariat, Monday, April 16, 2018
[Provisional Translation]
On April 16, 2018, Prime Minister Shinzo Abe received a courtesy call from H.E. Mr. Wang Yi, State Councilor and Foreign Minister for the People’s Republic of China, at the Prime Minister’s Office.
G7 Leaders’ Statement on Syria
Foreign Affiars, Tuesday, April 17, 2018
We, the G7 Leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States of America and the European Union, are united in condemning, in the strongest possible terms, the use of chemical weapons in the April 7 attack in Eastern Ghouta, Syria.
We fully support all efforts made by the United States, the United Kingdom and France to degrade the Assad regime’s ability to use chemical weapons and to deter any future use, demonstrated by their action taken on April 13. This response was limited, proportionate and necessary - and taken only after exhausting every possible diplomatic option to uphold the international norm against the use of chemical weapons.
Use of chemical weapons is a breach of the Chemical Weapons Convention and constitutes a threat to international peace and security. The repeated and morally reprehensible use of chemical weapons by the Assad regime in the past has been confirmed by independent international investigators. We condemn this deliberate strategy of terrorizing local populations and forcing them into submission. Syria’s possession of chemical weapons and their means of delivery are illegal under UN Security Council Resolution 2118 and the Chemical Weapons Convention. We stand together against impunity for those who develop or use these weapons, anywhere, anytime, under any circumstances.
We remain committed to a diplomatic solution to the conflict in Syria. We commend and support UN Special Envoy de Mistura’s efforts towards an inclusive and credible political transition in accordance with UN Security Council Resolution 2254 and the Geneva Communiqué.
G7 Foreign Ministers’ Statement
Foreign Affiars, Tuesday, April 17, 2018
“We, the G7 foreign ministers, of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America and the High Representative of the European Union, are united in condemning, in the strongest possible terms, the attack that took place against Sergei and Yulia Skripal, using a nerve agent in Salisbury, United Kingdom, on March 4, 2018. A British police officer and numerous civilians were exposed in the attack and required hospital treatment, and the lives of many more innocent British civilians have been threatened. We express our deepest sympathies to them all and our admiration and support for the U.K. emergency services for their courageous response.
“The United Kingdom has thoroughly briefed G7 partners. We share, and agree with, the U.K.’s assessment that it is highly likely that the Russian Federation was responsible for the attack and that there is no plausible alternative explanation. We condemn Russia’s continued failure to address legitimate requests from the U.K. government, which further underlines its responsibility. We call on Russia to urgently address all questions related to the incident in Salisbury. The Organisation for the Prohibition of Chemical Weapons (OPCW) has now independently confirmed the findings of the United Kingdom relating to the identity of the toxic chemical that was used in Salisbury. Russia should provide full and complete disclosure of its previously undeclared Novichok program to the OPCW in line with its international obligations.
“This use of a military-grade nerve agent, of a type developed by Russia, constitutes the first offensive use of a nerve agent in Europe since the Second World War and is a grave challenge not only to the security of the United Kingdom but to our shared security. It is an assault on U.K. sovereignty. Any use of chemical weapons by a state party, under any circumstances, is a clear breach of international law and a violation of the Chemical Weapons Convention. It is a threat to us all. Their use is abhorrent, completely unacceptable and must be systematically and rigorously condemned. We, participating states of the International Partnership Against Impunity for the Use of Chemical Weapons, stand together against impunity for those who develop or use these weapons, anywhere, any time, under any circumstances.
“The G7 is committed to protecting and promoting the rules-based international system. We stand in unqualified solidarity with the United Kingdom. Our concerns are also heightened against the background of a pattern of earlier irresponsible and destabilizing Russian behaviour, including interference in countries’ democratic systems. We call on Russia to live up to its Chemical Weapons Convention obligations, as well as its responsibilities as a permanent member of the UN Security Council, to uphold international peace and security. In order to bring Russia back into the rules-based international system, we will continue to engage with Russia, as appropriate, on addressing regional crises and global challenges.
“The G7 will continue to bolster its capabilities to address hybrid threats, including in the areas of cybersecurity, strategic communication and counter-intelligence. We welcome national action taken to constrain Russian hostile-intelligence activity and to enhance our collective security. The G7 will remain closely focused on this issue and its implications.”
Press Occasion on the Attack on Syria by the United States, the United Kingdom, and France (1)
Cabinet Secretariat, Saturday, April 14, 2018
[Provisional Translation]
On April 14, 2018, Prime Minister Shinzo Abe held a press occasion in Osaka City.
Regarding the attack on Syria by the United States, the United Kingdom, and France, the Prime Minister said,
“The use of chemical weapons is extremely inhumane and Japan cannot tolerate it.
The Government of Japan supports the determination of the United States, the United Kingdom, and France to never allow the proliferation and use of chemical weapons. We understand that the countries took the action in order to avoid further aggravation of the situation.
Later, in the evening, I will convene a meeting of the National Security Council (NSC) and we will analyze the situation and discuss our response moving forward.”
Press Occasion on the Attack on Syria by the United States, the United Kingdom, and France (2)
Cabinet Secretariat, Saturday, April 14, 2018
[Provisional Translation]
On April 14, 2018, Prime Minister Shinzo Abe held a press occasion at the Prime Minister’s Office.
Regarding the attack on Syria by the United States, the United Kingdom, and France, the Prime Minister said,
“We just held a meeting among four ministers and analyzed the situation in Syria.
The use of chemical weapons is extremely inhumane and Japan cannot tolerate it. The Government of Japan supports the determination of the United States, the United Kingdom, and France to never allow the proliferation and use of chemical weapons. On this basis, we understand that the countries took the action in order to avoid further aggravation of the situation.
In East Asia as well, weapons of mass destruction such as nuclear, biological, and chemical weapons pose an increasingly serious threat. Under the robust Japan-U.S. Alliance, Japan will continue to fulfill its role for the maintenance of peace and stability in the region while collaborating and cooperating with the international community.”
“I have issued instructions to continue to analyze information thoroughly, and to work closely with the United States as well as the United Kingdom and France. I have no plans to hold summit telephone talks anytime soon.
In any event, I will visit the United States and hold a Japan-U.S. summit meeting next week. On that occasion, I hope to discuss issues of the Middle East, including the issue of Syria and other matters.”
G-7 Finance Ministers Joint Statement on North Korea, April 18, 2018
Ministry of Finance, Wednesday, April 18, 2018
North Korea’s continued development of weapons of mass destruction (WMD) and ballistic missile programs pose a grave threat to international peace and security. We remain committed to the complete, verifiable, and irreversible denuclearization of the Korean peninsula and dismantlement of North Korea’s WMD and ballistic missile programs, but North Korea must match its words with concrete actions. To support this goal, we will continue to take action to impose maximum economic pressure on North Korea, in keeping with relevant United Nations Security Council Resolutions (UNSCRs).
We are concerned by North Korea’s evasion of international sanctions and its continued ability to access the international financial system. North Korea does little business in its own true name and uses a network of agents, front and shell companies, and complex ownership structures to access the international financial system.
As the UN Panel of Experts (PoE) noted in its March 2018 report, in 2017, more than 30 representatives of North Korean banks have been operating outside of North Korea, in contravention of UNSCRs. The PoE also noted that DPRK trade representatives continue to play a role in the country’s prohibited programs, including by acting as fronts for designated entities and individuals, as well as engaging in commercial activities that violate the UNSCRs. We call on all countries to fully and effectively implement their UNSCR obligations with respect to North Korea and, in this regard, to expeditiously expel these bank and trade representatives in accordance with their UN obligations.
Financial institutions in G-7 countries also play an important role in the fight against North Korea’s illicit global financial activity, and we will engage and share information with them, as appropriate, to expose North Korea’s deceptive financial practices and thereby protect the integrity of the international financial system. We call on countries to similarly engage their financial institutions so they will be on alert and take steps to implement necessary additional scrutiny to ensure that they are not processing transactions on behalf of sanctioned North Korean entities.
Regulatory Reform Promotion Council
Cabinet Secretariat, Monday, April 16, 2018
[Provisional Translation]
On April 16, 2018, Prime Minister Shinzo Abe attended the 28th meeting of the Regulatory Reform Promotion Council at the Prime Minister’s Office.
During the meeting, there was a discussion on regulatory reform related to broadcasting.
Based on the discussion, the Prime Minister said,
“Radio frequencies are a common public asset and an important infrastructure in the Society 5.0 era. It is crucial that we promote the effective use of radio frequencies with our sights set on the changing times.
Currently, rapid technological innovation is steadily eroding barriers in the broadcasting and communications fields. There are no longer national borders in the world of content creation, and we are entering into an era of global competition. It is anticipated that the changes we are seeing will accelerate even further in the future.
This should not be thought of as a challenge. We cannot be giving up from the start, believing that Japanese content will not be accepted in the global world. We must consider this as also being a major opportunity to further boost Japan’s content industry. The time has come for a discussion on measures toward reforming the nature of broadcasting that takes into account these significant environmental changes.
Regarding the items for discussion that have been presented for today, I would like to ask the members of this Council to engage in extensive discussions on how broadcasting should be by taking the future into consideration, based on multifaceted and broad perspectives, including the innovation and global viewpoints, and above all, the perspective of broadcasting users.”
Ministerial Council on the Monthly Economic Report and Other Relative Issues
Cabinet Secretariat, Monday, April 16, 2018
[Provisional Translation]
On April 16, 2018, Prime Minister Shinzo Abe attended a meeting of the Ministerial Council on the Monthly Economic Report and Other Relative Issues at the Prime Minister's Office.
Regarding the assessment of the current state of the Japanese economy, the April Monthly Economic Report states, “The Japanese economy is recovering at a moderate pace.”
Furthermore, in regard to short-term prospects, the Report states, “The economy is expected to continue recovering, supported by the effects of the policies, while the employment and income situation is improving. However, attention should be given to the uncertainty in overseas economies and the effects of fluctuations in the financial and capital markets.”
Joint Meeting of the Intellectual Property Strategy Headquarters and the Ministerial Meeting Concerning Measures Against Crime
Cabinet Secretariat, Friday, April 13, 2018
[Provisional Translation]
On April 13, 2018, Prime Minister Shinzo Abe held a joint meeting of the Intellectual Property Strategy Headquarters and the Ministerial Meeting Concerning Measures Against Crime at the Prime Minister's Office.
In the beginning of the meeting, the Prime Minister said,
“The damages caused by pirated content websites illegally posting the manga, anime, and other content produced in Japan have grown rapidly over the past few months. The profits that should be going to manga artists and creators are being taken away from them by pirated content websites, which could lead to a situation that threatens the future of Japan’s content industry.
Paying respect to these works, which are the products of the immense effort put into them by their creators, and giving them legitimate compensation for their works, provide encouragement to creators, give rise to their next works, and support Japan as a nation of culture. The Government must implement swift measures on this issue, with the expectation that everyone who enjoys manga, anime, and other creations, from children to adults, will come to share our understanding of this.
As such, under the leadership of the ministries and agencies concerned with the copyright system, content industry, electronic communications business, and other relevant areas, I would like to ask that Government-wide efforts be undertaken to immediately compile response measures, including mid- to long-term initiatives, and implement them as early as possible, starting from what is currently possible.”
Based on this statement, the meeting discussed the issues related to pirated content websites and approved the emergency measures.
Visit to Osaka Prefecture
Cabinet Secretariat, Friday, April 13, 2018
[Provisional Translation]
On April 13, 2018, Prime Minister Shinzo Abe visited Osaka Prefecture.
Prime Minister Abe visited Hanazono Rugby Stadium in Higashiosaka City. Afterwards, he visited a company crafting tools for precision machinery, and then visited a company manufacturing industrial-use thermometers.
After the visit, in response to questions from reporters about a document created by Ehime Prefecture related to the establishment of a new veterinary school by Kake Educational Institution, and in regard to his thoughts on the site visits, the Prime Minister said,
“Firstly, the Government has been working to confirm the facts related to the document of Ehime Prefecture, and there was an announcement related to this issue from the Ministry of Agriculture, Forestry and Fisheries earlier today. This issue has shaken the confidence of the public in the Government. We will first thoroughly investigate this issue, uncover the whole truth, and clean out the stables, and beyond that, fully rebuild our organization to obtain the confidence of the public. I will do everything in my power to that end.
The government cannot do without the trust of the public. This is fundamental to politics, and I am determined to do my utmost to restore the confidence of the public.
Today I am visiting Osaka. I saw Hanazono Rugby Stadium, one of the venues where the Rugby World Cup will be held next year. In addition, the G20 Summit will also be held in Osaka. Taking these opportunities, we would like to convey our message to Japan and to the world, here from Osaka.
Today, I also visited a medium-sized enterprise and a small scale enterprise in Higashiosaka City. I could truly feel their passion for manufacturing. These companies value their employees and are working to raise their motivation. In the process of eliminating overtime work they are increasing productivity. I felt that they are materializing everything we are promoting related to the revolution in productivity, including human resources development, and the work style reform. In this context, they are doing outstanding manufacturing, creating exceptional products, and exporting them to the world. Seventy percent of the Japanese economy is supported by these small- and medium sized enterprises (SMEs). For that reason, I will promote the work style reform at SMEs and steadily advance the productivity revolution. In the course of that, the wages of the people working at SMEs will rise, leading to increases in consumption and the growth of the economy. I seek to create such a virtuous economic cycle.
I would like to reiterate that next year the G20 Summit will be held in Osaka, and I will ensure that this will provide a major boost to our bid to host the World Expo in Osaka in 2025.”
Council on Investments for the Future
Cabinet Secretariat, Thursday, April 12, 2018
[Provisional Translation]
On April 12, 2018, Prime Minister Shinzo Abe held the 15th meeting of the Council on Investments for the Future at the Prime Minister’s Office.
At the meeting, there was discussion on the utilization of technologies related to Society 5.0 in the regions as well as its global promotion.
Based on the discussion, the Prime Minister said,
“Advancement of the fourth industrial revolution holds great potential for the resolution of various social issues, including the declining birthrate and ageing society, personnel shortages, and disasters. We must not fail to keep up with this revolutionary movement.
Meanwhile, with rapid advancements in technological innovation, various institutions and social systems are not catching up with changes. Overcoming the “governance gap” was a major topic of discussion at this year’s World Economic Forum in Davos, and Japan is playing a leading role in the world to tackle this issue.
As Society 5.0, where new ideas are boldly tackled, is becoming a reality, there is no other time in history that has so strongly demanded a frontier spirit in the government than today.
The initiative for open innovation in the maintenance and management of rivers has precisely responded to the needs of this new era.
In addition, on-site implementation of technologies from the fourth industrial revolution, which offer much greater precision than ever before, was realized in just around one year.
With the ageing of infrastructure becoming a major issue, I would like the relevant ministers, including the Minister of Land, Infrastructure, Transport and Tourism, to further accelerate on-site installment of new innovations by rolling out these success stories in all fields of infrastructure, including roads, airports, ports, and sewerage, and advancing the formulation and visualization of work schedules and KPIs toward implementation.
I would like to thank Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), and Mr. Murat Sönmez, Head of Center for the 4th Industrial Revolution & Global Network of the WEF , for joining us today.
I am convinced that the initiatives of Japan, a developed country facing challenges, will greatly contribute to the resolution of universal issues worldwide and the achievement of the SDGs.
I ask that relevant ministers swiftly crystallize Japan-based flagship projects towards the global promotion of Society 5.0 and promote collaboration with the projects of the Center for the 4th Industrial Revolution of the WEF.”
Extraordinary Press Conference by Foreign Minister Taro Kono
Foreign Affairs, Monday, April 16, 2018
Opening Remarks
Today, the Fourth Japan-China High-Level Economic Dialogue was held. This was the first holding of this dialogue for eight years. I served as the chair from Japan, while State Councilor Wang Yi served as the chair from China, and the major ministers related to the economy from both countries participated. In the dialogue, we discussed the promotion of further cooperation between Japan and China going forward from broad and big-picture perspectives, and based on the perception that Japan and China are important partners for each other for cooperation in economic areas and that their mutual economic development is an opportunity, we reached agreement to expand and enhance cooperation and exchanges at various levels. Furthermore, we agreed to play a responsible role in the development of the global economy and solution of global issues from a broad perspective. We agreed that going forward we would continue to hold this dialogue and that we would hold the fifth meeting in China at an appropriate time convenient for both parties. At yesterday’s Japan-China Foreign Ministers’ Meeting I confirmed with State Councilor Wang Yi that we would comprehensively improve the Japan-China relations and build stable ties this year, which is the 40th anniversary of the conclusion of the Treaty of Peace and Friendship between Japan and China. The holding of this high-level economic dialogue is a major step toward the improvement of Japan-China relations, and I intend to use it as an opportunity to make Japan-China economic relations even stronger going forward.
Question-and-Answer Session
Reporter: Currently the United States and China are imposing economic sanctions on each other. Did you have any exchanges about that in the dialogue?
Mr. Taro Kono, Minister for Foreign Affairs: All countries share the perception that causing trade wars will have an extremely large impact on the prosperity of the global economy. Japan raised the problem of intellectual property rights and proposed that we should enable fair and free technology transfers and exchanges of intellectual property.
Reporter: What did China say about your proposal?
Minister Kono: They said a variety of things, but I will refrain from commenting on the statements of the other party.
Reporter: Regarding relations between the United States and China, please tell us what you said regarding the import restrictions on steel.
Minister Kono: Regarding the matters related to steel too, the Japanese participants raised the issues. Japan stated that dealing with the excess supply capacity was necessary.
Reporter: In regard to trade between Japan and China, China has the Belt and Road economic zone and Japan has the Free and Open Indo-Pacific Strategy. What kinds of exchanges of views did you have about these two strategies?
Minister Kono: The One Belt and One Road and the Free and Open Indo-Pacific Strategy were discussed a little at yesterday’s Foreign Ministers’ Meeting. Japan talked about the fact that it was sufficiently feasible to cooperate case-by-case on a variety of projects in a form in line with international standards, and that we would strongly advance cooperation between Japan and China in third countries. Japan also stated that the Free and Open Indo-Pacific based on the rule of law would also contribute to China’s Belt and Road.
Reporter: Regarding the Belt and Road, do you mean that Japan communicated the fact that Japan would be able to cooperate case-by-case?
Minister Kono: I stated that Japan could consider cooperation case-by-case for projects that firmly match the standards that are being established internationally, namely taking into consideration international standards and transparency, openness, the soundness of the project and the fiscal soundness of the country accepting the financing, and environmental and social factors.
Reporter: Do you perceive that China has called for cooperation regarding the One Belt and One Road?
Minister Kono: I received a quite detailed explanation from China about the One Belt and One Road as a part of one of the items on the agenda.
Reporter: Specifically what do you mean by global issues?
Minister Kono: Even now Japan and China are the second and third largest economies in the world, so I stated that it was important for the two countries to not only address bilateral issues between the two countires, but also to work together side by side to solve global issues such as the SDGs and climate change, and I intend to have brief discussions on a variety of specific issues going forward and cooperate together with China while tackling them.
Reporter: In relation to the Belt and Road you said there were discussions about international standards. Did this discussion occur in the context of Japan and China playing the responsible role in the international community that you mentioned in your opening remarks?
Minister Kono: Naturally a part of international responsibility is to firmly maintain the free trade system, and naturally this includes that Japan and China will lead in tackling global issues.
Reporter: What kind of discussions did you have about the FTA and RCEP between Japan and China?
Minister Kono: We shared the perception that it was necessary to speed up the FTA between Japan and China and RCEP in order to integrate the East Asia economic zone now.
Reporter: You said you would hold the fifth meeting in China at an appropriate time. I think that as a general rule it has been held once every year to date. Are we to understand this holding of the meeting once every year will not change?
Minister Kono: Japan would like to hold it both next year and the year after next so if possible I intend to hold this high-level economic dialogue every year to hold broad and big-picture discussions, and follow-up on specific matters. Next time we intend to hold it in China. We reached mutual agreement on holding the next meeting in China. I think that perhaps we share the view that the earliest possible appropriate time will be next year for both of us.
Reporter: In the first place, are we to understand that you agreed to firmly maintain the free trade system?
Minister Kono: Japan and China have the shared perception that both countries have received enormous economic benefits under free trade.
Reporter: Did China seek any cooperation from Japan regarding the import restrictions on steel and aluminum?
Minister Kono: None in particular.
Extraordinary Press Conference by Foreign Minister Taro Kono
Foreign Affairs, Sunday, April 15, 2018
Opening Remarks
Mr. Taro Kono, Minister for Foreign Affairs: Today, from 4:30 p.m. for just under four hours, I held a Japan-China Foreign Ministers’ Meeting and working dinner with State Councilor and Foreign Minister Wang Yi.
I believe that in an extremely positive overall atmosphere, we were able to have fruitful exchanges of views about the promotion of the Japan-China relations on the 40th anniversary of the conclusion of the Treaty of Peace and Friendship between Japan and China. In particular, we agreed to implement a wide range of practical cooperation and comprehensively improve the Japan-China relations through visits by leaders from both sides, with the visit to Japan of Premier Li Keqiang in conjunction with the Japan-China-ROK Trilateral Summit as the first step.
Furthermore, we confirmed the importance of working together on a wide range of global issues based on the concept of a “Mutually Beneficial Relationship Based on Common Strategic Interests.”
Regarding the East China Sea, I emphasized that there will be no genuine improvement in the Japan-China relations without stability in the East China Sea, and we confirmed the importance of making the East China Sea a “Sea of Peace, Cooperation, and Friendship.”
As for the North Korea issue, we held candid and in-depth discussions based on the current situation. We confirmed that we would continue to fully implement the related Security Council resolutions and cooperate closely in order to ensure that North Korea abandons all nuclear and ballistic missile programs in a complete, irreversible, and verifiable manner. Furthermore, I once again called for the understanding and cooperation of China toward resolving the abductions issue as quickly as possible.
We also held discussions about practical cooperation for the economy. Tomorrow we will hold the first Japan-China High-Level Economic Dialogue in eight years, and I and State Councilor Wang Yi will serve as the co-chairs. We will hold discussions about a wide range of Japan-China cooperation for the economy with the ministers from the related ministries and agencies. I intend to work hard to make it a fruitful meeting.
Question-and-Answer Session
Reporter: Firstly I would like to ask about the mutual visits of the leaders. What kinds of exchanges were held about the visit of Prime Minister Abe to China and the visit of President Xi Jinping to Japan?
Minister: Firstly we have agreed to firmly proceed with high-level visits such as the visit to Japan of Premier Li Keqiang in conjunction with the Japan-China-ROK Trilateral Summit, followed by the visit to China of Prime Minister Abe, and the visit to Japan of President Xi Jinping.
Reporter: There was a China-North Korea summit meeting recently. Have you heard anything about the exchanges that took place on that occasion?
Minister: We held a variety of in-depth exchanges in the context of the situation in North Korea. I will refrain from commenting on the content of the exchanges as a courtesy.
Reporter: Regarding the North Korea issue, on the issue of how to proceed with negotiations with North Korea Prime Minister Abe has made a statement to the effect that there is no point to negotiations for the sake of negotiations. I think an exchange of views was held regarding this point today as well. What do you think about negotiations going forward regarding the framework of the Six-Party Talks with North Korea after today’s discussions?
Minister: We did not discuss the Six-Party Talks today. I was able to confirm that the perceptions of Japan, the United States, the ROK, and China are in alignment regarding the present inter-Korean summit meeting with North Korea and the United States-North Korea summit meeting, and about the fact that the economic sanctions based on the Security Council resolutions to date must be implemented properly.
Reporter: Please tell us if the attack on Syria carried out yesterday by the United States, the United Kingdom, and France was discussed in today’s foreign ministers’ meeting and, if it was, what kinds of exchanges you had on this topic.
Minister: We did not discuss Syria today. Today, we mainly discussed the Japan-China relations and then global issues, and at the working dinner, the main topic was the North Korea issue.
Reporter: Was the schedule for the Japan-China-ROK summit meeting finalized in the present meeting?
Minister: I think that the participating countries, including the ROK, will work out the details thoroughly going forward.
Reporter: In your four-hour meeting, what proportion of the time did you spend on the North Korea issue?
Minister: We thoroughly discussed the North Korea issue at the working dinner.
Reporter: Do you mean that you spent most of the dinner on the North Korea issue?
Minister: That’s right. We talked about the relations between United States and China a little, but we mostly talked about the North Korea issue.
Reporter: Earlier you said that you called for the understanding and cooperation of China regarding the abductions issue. Was a positive response or attitude seen from China?
Minister: I take every opportunity to make a variety of statements to China with respect to this abductions issue. We also talked today about China’s view of the matter and other matters.
Reporter: You made the statement that this was the first step in further advancing relations with China. On the other hand, support for Prime Minister Abe is falling partly due to the domestic Moritomo issue and the story about the Kake Educational Institution, and the Abe administration is becoming unsteady on its feet domestically. Do you think this kind of situation will have an effect on advancing the Japan-China relations going forward?
Minister: We did not discuss that today in particular.
Reporter: What do you think about this point?
Minister: I intend to conduct diplomacy in a firm manner, without being caught up in such matters in particular.
Reporter: You said that you agreed to make the East China Sea a sea of friendship. Was anything specific decided?
Minister: I received the opportunity to present the issue as seen by Japan. I will refrain from commenting on the details of the exchanges, but our perceptions were in alignment regarding the fact that stabilizing the East China Sea is necessary for the development of Japan-China relations.
Reporter: Were there any discussions about the issue of the Senkaku islands in the meeting? Furthermore, was there an exchange of views about the maritime and aerial communication mechanism?
Minister: We intend to work as hard as we can to speed up the maritime and aerial communication mechanism.
Reporter: Regarding the earlier matter of the abductions issue, you said that China had a view of the matter. What specifically did China say about this?
Minister: I will refrain from commenting on the statements made by the other party.
Signing of the Agreement between the Government of Japan and the Government of Malaysia concerning the Transfer of Defence Equipment and Technology
Foreign Affairs, Wednesday, April 18, 2018
1. On April 18 (local time) in Kuala Lumpur，Dr. Makio Miyagawa, Ambassador to Malaysia, and Dato' Sri Abdul Rahim bin Mohamad Radzi, Secretary General, Ministery of Defence of Malaysia, signed the Agreement between the Government of Japan and the Government of Malaysia concerning the Transfer of Defence Equipment and Technology.
2. This Agreement establishes a legal framework for the Governments of Japan and Malaysia regarding the transfer and handling of defence equipment and technology between the two governments in order to implement projects to be jointly determined including those contributing to international peace and stability. Specifically, it stipulates procedures to determine each specific transfer as well as basic rules on the use of the transferred defence equipment and technology.
3. The conclusion of this Agreement will ensure appropriate control over the defence equipment and technology transferred between Japan and Malaysia, especially regarding any subsequent transfer to a third party or any extra-purpose use. It is expected that this Agreement will contribute to closer cooperation between Japan and Malaysia for defence equipment and technology, and maintaining and improving the production and technological bases for Japan’s defence industry, thereby ensuring the security of Japan.
Congratulatory Message from Prime Minister Shinzo Abe to the President of Azerbaijan
Foreign Affairs, Wednesday, April 18, 2018
A presidential election of Azerbaijan was held on April 11, and on April 17, Azerbaijan’s Constitutional Court confirmed that incumbent President H. E. Mr. Ilham Aliyev was re-elected as a result of that election. Following the confirmation Mr. Shinzo Abe, Prime Minister of Japan, sent a congratulatory message to President Aliyev.
Financial System Report (April 2018)
Bank of Japan, Thursday, April 19, 2018
Features of and motivations behind the April 2018 issue of the Report
This April 2018 issue of the Report analyzes bank loan markets, which have been increasingly active in recent years, with particular focus on the relationship between interest rates and credit risk. Under the prolonged low interest rate environment worldwide, credit spreads on corporate bonds and other credit products have narrowed to historically low levels in many advanced economies, and concern over complacency in investors' risk perception and possible risk repricing has been pointed out. The motivation behind this issue of the Report is to examine whether similar developments and issues have been observed in bank loan markets.
Reflecting the prolonged economic expansion and the subsequent decline in firms' default rates, financial institutions' credit costs have been at historically low levels. However, when credit costs are calculated based on the past default rates, there is a possibility that the amount of credit risk potentially held by financial institutions could be underestimated, reflecting the persistently low economic volatility. In order to check whether financial institutions are sufficiently resilient against risks, it is important to examine how firms' financial condition will change in response to a possible deterioration of the macroeconomic environment and how it will subsequently affect financial institutions' loss-absorbing capacity. Credit risk varies significantly among individual firms, reflecting differences in their financial condition. Thus, financial institutions need to set loan interest rates at levels that match each firm's credit risk. This has become more important given the recent increase in the number of financial institutions that have boosted lending to middle-risk firms. This issue of the Report examines the financial condition and behavior of individual firms, particularly middle-risk firms, and provides in-depth analysis of financial institutions' lending stance toward these firms (including interest rate setting behavior) and their resilience to risks. Further, the potential vulnerabilities of the financial system are assessed, and tasks and challenges for financial institutions regarding credit risk management are outlined.
Executive summary
Assessment of financial intermediation and financial cycle
Financial intermediation has remained well-functioned on the back of the Bank of Japan's monetary easing, supporting the moderate expansion of Japan's economy. In the domestic loan market, the interest rates of both short-term and long-term loans have been hovering around historically low levels and loans outstanding have continued to grow at a year-on-year rate of around 2 percent. In particular, business fixed investment-related lending to small firms has been increasing in a wide range of industries as lending competition has been intensifying among regional financial institutions. In the CP and corporate bond market, large firms' funding has been growing at a faster pace as issuance rates have hovered at extremely low levels. Meanwhile, global financial markets have been stable on the whole, although stock prices in advanced economies dropped substantially in response to the rise in U.S. long-term interest rates, which reflected increased inflation expectations. With continued growth in overseas economies, overseas investment and lending activities by Japanese financial institutions have maintained upward momentum.
The funding conditions for the non-bank private sector have been highly accommodative, but no particular signs of overheating are observed in the current phase of the financial cycle. Stock prices, which increased somewhat sharply until early 2018, have been more or less in line with the expected improvement in corporate profits. Although financial institutions and firms have been expanding the size of their balance sheets, such size has not become excessive relative to GDP. While the outstanding amount of loans to the real estate industry has registered relatively higher growth, a growing number of financial institutions have turned cautious over the risks associated with adjustments in the real estate market and credit concentration in the real estate industry, thus making their stance on real estate-related lending more restrictive. Domestic investors have also become cautious in property acquisitions due to concern over the risk of entrenched real estate valuations. Due attention should be paid to the possibility that the vulnerabilities of the financial system could potentially increase if financial institutions do not receive an appropriate level of return relative to risk from their lending and securities investment, despite not excessively expanding the size of their balance sheets.
Stability of the financial system
Financial institutions have generally strong resilience in terms of both capital and liquidity in times of tail events such as the failure of Lehman Brothers (the Lehman shock). Thus, it can be judged that Japan's financial system has been maintaining stability on the whole. However, there is some heterogeneity in financial institutions' resilience against stress. Furthermore, the current sufficiency of their level of capital does not necessarily guarantee the future stability of the financial system, because financial institutions face chronic stress, such as the persistent decline in the population and the number of firms, which determine the secular demand for financial transactions. In other words, even if financial institutions currently have the capacity to absorb losses from acute stress such as the Lehman shock, their future capital may eventually be adversely affected if their core profitability continues to fall due to chronic stress. A significant number of regional financial institutions have realized gains on sales of securities in order to maintain net income levels and a higher dividend payout ratio despite a decline in their pre-provision net revenue (excluding trading income). Continuing to unreasonably realize gains on sales of securities will reduce interest and dividend income on securities holdings in the future. Furthermore, unrealized gains on securities do actually function as a capital buffer on an economic value basis. Therefore, it is important for financial institutions to consider desirable profit distribution, including how much to return to shareholders.
Vulnerabilities due to financial institutions' credit risk taking
Financial institutions have actively extended loans at low interest rates, particularly to so-called "middle-risk firms," against the backdrop of the effects of intensified lending competition under chronic stress and monetary easing. This reflects the fact that the potential loan demand by middle-risk firms will easily materialize in response to lower loan interest rates offered by financial institutions, as these firms hold a smaller amount of internal funds and are more sensitive to loan interest rates compared to financially sound firms. The increase in loans to middle-risk firms is generally observed in financial institutions with a higher capital adequacy ratio and higher risk-taking capacity. At the same time, such an increase tends to occur in financial institutions with lower core profitability and stronger risk-taking incentives. In fact, financial institutions tend to be complacent in their perception of credit risk amid the prolonged benign macroeconomic conditions, such as economic expansion and low interest rates. If financial institutions and firms act on the premise that such a favorable macroeconomic environment will continue in the future, their balance sheets could be impaired by unexpected losses in the event of a reversal in the macroeconomic environment. The ratio of financial institutions' loan-loss provisions for overall normal loans has remained at a historically low level that is below even that before the Lehman shock. However, in the event of negative shocks, such as an economic downturn or a rise in interest rates, firms -- especially middle-risk firms with low profitability and ability to repay their debt -- could be downgraded and credit costs could rise sharply.
Challenges from a macroprudential perspective
There is a possibility that financial imbalances could build up if financial institutions shift toward excessive risk taking in order to maintain profitability. There is also a possibility that the financial intermediation function could weaken if financial institutions lose their loss-absorbing capacity due to the continued decline in their core profitability. Thus, there exist both overheating and contraction risks. In order for the financial system to maintain its stability into the future, financial institutions should accelerate their efforts to ensure sustainable profitability and strengthen their capacity to address risks in the areas where they actively continue to take risks, such as domestic and overseas lending as well as investment in stocks and foreign bonds. In this regard, bearing in mind any future changes in the macroeconomic environment, financial institutions that have actively extended loans to middle-risk firms need to set appropriate interest rates reflecting the risks involved, and improve the effectiveness of credit risk management, including examining whether their loan-loss provisions are appropriate. In particular, when making loan-loss provisions, financial institutions need to appropriately smooth out cyclical fluctuations from a medium- to long-term perspective so that loan-loss provisions are not excessively affected by the current favorable macroeconomic environment. At the same time, they should deepen relationships with client firms and thereby actively support these firms' efforts to raise productivity. The Bank of Japan will support such efforts of financial institutions through, for example, its on-site examinations and off-site monitoring and will continue to closely monitor, from a macroprudential perspective, the impact on the financial system of financial institutions' various risk taking.
Notice
This Report basically uses data available as at end-March 2018.
Please contact the Financial System and Bank Examination Department at the e-mail address below to request permission in advance when reproducing or copying the contents of this Report for commercial purposes.
Please credit the source when quoting, reproducing, or copying the contents of this Report for non-commercial purposes.
For details of the stress scenario in the macro stress testing, please see the scenario table [XLSX 27KB] (from the linked page).
Inquiries
Financial System Research Division, Financial System and Bank Examination Department
E-mail : post.bsd1@boj.or.jp
JICA President Kitaoka Holds Talks With Prime Minister Tobgay of Bhutan
JICA, Thursday, April 19, 2018
JICA President Shinichi Kitaoka held talks with Prime Minister Tshering Tobgay of Bhutan on April 13 in Tokyo.
Mr. Kitaoka and Mr. Tobgay began by affirming the long friendship between Japan and Bhutan. Mr. Tobgay expressed gratitude that, in part because of Japan's continuous assistance, Bhutan is projected to graduate from the category of least developed country. He said he would like to continue deepening the partnership between the two countries. Mr. Kitaoka responded by saying JICA will continue its cooperation with Bhutan in accordance with the agency's new vision of "leading the world with trust."
In addition, the two men discussed the importance of training young workers, and Mr. Tobgay mentioned his hope that the people of Bhutan will acquire expertise from Japan through JICA’s scholarship programs.
JICA will continue its cooperation with Bhutan in diverse areas including human resource training, infrastructure and agriculture.
Bangladesh : Large-Scale Water Supply Assistance to a Camp for Evacuees From Myanmar
JICA, Thursday, April 19, 2018
Since August 2017, some 800,000 people reportedly have fled Rakhine State in Myanmar for Bangladesh.
JICA is cooperating with the government of Bangladesh and other international agencies to provide support for the evacuees and the host communities in the area.
Survey results have shown that in the camp where some 80 percent of evacuees live, urgently dug shallow tubewells are running dry, and the majority of the shallow tubewells are contaminated with E. coli. Under such circumstances, JICA decided to assist with supplying water in the camp by digging a deep tubewell for which a groundbreaking ceremony was held recently.
E. coli spreads in some 5,000 shallow tubewells that are running dry
The place where JICA is launching water-supply assistance is Kutupalong Camp in Ukhia, Cox's Bazar, southeastern Bangladesh. About 600,000 people, or about 80 percent of the evacuees from Rakhine State in Myanmar, live in this camp. To secure water for the evacuees, about 5,000 shallow wells (about 40 meters deep) were dug, but after excessive drawing of water, sources continue to dry up. Also, survey results have been released showing that more than 80 percent of the shallow tubewells have been contaminated with E. coli, and securing safe water is a major issue in the camp.
For the past 20 years, JICA has assisted with strengthening the capacity of the Department of Public Health Engineering (DPHE), the government agency responsible for the rural water supply. The Project for Improvement of Comprehensive Management Capacity of Department of Public Health Engineering on Water Supply, a technical cooperation project, and the Project for Ground Water Investigation and Development of Deep Ground Water Source in Urban and Rural Areas, a grant aid project, are underway.
As the water sanitation problem of the evacuees worsens ahead of the rainy season, which begins in May, the government of Bangladesh requested the construction of water supply facilities. In the past, the government of Japan provided DPHE a drilling rig for deep tubewells that can excavate up to 400 meters down. There are only a few such drilling rigs in Bangladesh other than DPHE's, so it was decided that JICA would use this drilling rig for its work in the camp.
Many international agencies and NGOs are working in the camp, so cooperation among aid agencies, and with the government of Bangladesh, is an important issue. A JICA expert dispatched to the Ministry of Disaster Management and Relief took the lead in consulting with various agencies and coordinated to provide rapid assistance based on local needs.
Combining a deep tubewell and equipment to supply safe water to 40,000 people
The water supply system JICA is assisting with will consist of a deep tubewell (400 meters), 5,190 meters of pipeline and 216 water taps. It will be among the largest water supply systems in the camp, supplying some 40,000 people.
JICA will drill the deep tubewell as a part of the grant aid project, and the will hand over to the International Organization for Migration (IOM) the building of the water supply facilities.
At the groundbreaking ceremony on April 8, representatives of the UNHCR, the U.N. refugee agency, and the IOM said they would like to expand initiatives that combine deep tubewells and water supply equipment and intensively monitor water quality to bring safe water to the evacuees in other sections of the camp.
DPHE pointed out that assistance from Japan had allowed the government of Bangladesh to begin addressing the major issue of soundly dealing with the large number of evacuees, and that it is important for aid agencies to cooperate with one another.
Assistance to local governments affected by the large influx of evacuees
Before undertaking this assistance, JICA provided pre-dispatch training in disaster nursing to nurses dispatched to the camp and provided equipment to prevent infectious diseases. JICA has also provided equipment for testing non-communicable diseases (such as cancer, diabetes, cardiovascular disease and respiratory diseases) to the district hospital used by both evacuees and local residents.
In addition, JICA is preparing assistance to local governments affected by the large influx of evacuees such as repairing local infrastructure and supplying machinery and materials for educational facilities.
In coordination with other aid agencies, JICA will continue to support initiatives in a variety of sectors by the government of Bangladesh to assist the evacuees and the host communities.
