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Hello, this is World Business Report from the BBC World Service.
I have to ask, do you feel better off now than you did four years ago?
That's the question an American political person once asked in japan at the moment people are feeling the effect of price rises and that might affect the way they vote in sunday's election we'll be taking a look at that in just a moment uh we're also finding out how donald trump's big beautiful bill could be felt far away from the us especially in africa and either they're having an affair or they're the viral moment that two colleagues were caught on camera at a coldplay concert It's created a lot of questions.
First though, to Japan.
And we're only a couple of days away from an election there which could prove to be significant.
The economy, the working population, international relations, they've all put pressure on the incumbent government led by Shigeru Ishiba.
Here's the BBC's correspondent in Tokyo, Shaima Khalil, on just why this election is so important.
This upper house election has had a lot more attention than usual, mainly because the LDP's coalition is in a vulnerable political spot.
It lost its ruling majority back in October's lower house elections.
And recent polls for Sunday's vote are not looking promising for Prime Minister Shigeru Ishiba's ruling coalition.
125 seats will be up for grabs.
Mr. Ishiba has said that the Liberal Democratic Party, LDP, and its junior partner, Kometo, will aim for a simple majority, which requires a combined 50 seats.
If they fail, they will no longer hold a majority in either house in Parliament, which could threaten Shigeru Ishiba's leadership and trigger more political uncertainty, likely to affect the stock market's volatility.
Tackling rising prices is the main concern for voters in this election.
The country's rice shortage was a prime example of everyday struggles here.
The price of a bag of rice, a staple food in Japan, is nearly double what it was a year ago.
The ruling coalition has promised a handout of $135 per person to address rising living costs.
The main opposition, the Constitutional Democratic Party of Japan, CDP, has made a similar pledge.
They've also promised the exemption of food from consumption tax.
But the prime minister ruled out consumption tax reduction.
The stalled trade talks with the United States have also hung over this government throughout the campaign.
Japan's top negotiator has been to Washington seven times already since April, with very little progress.
President Trump Trump is unhappy with the trade deficit and calls the trade relations between the U .S. and Japan unfair.
In his recent letter, he said Tokyo had until August 1 to reach a deal or face a 25 percent tax on all exports.
Japan's auto industry and auto parts are the main sticking point.
In 2024, they represented more than a quarter of the country's exports to the United States, which is more than $51 billion.
dollars. Tokyo wants all tariffs on the car industry to be lifted, but Washington has no reason to do that without a solid counteroffer and concessions from Tokyo.
So the economy is central to this, but why?
How and why have things changed so much in Japan that the government's popularity has plummeted?
I asked Tomohiko Taniguchi, a special advisor to the Fujitsu Future Studies Centre and a former special advisor to the late Prime Minister Shinzo Abe.
It is definitely by far the largest concern, largest issue for the voters because inflation has been more serious than many people thought, including the policy planners.
And in a country where there are lots and lots of pensioners who get only fixed income, inflation bites and that's become a big issue.
And this is an issue which previously in Japan wasn't something that people felt so strongly.
No, because of the other symptoms that Japan's economy had long had.
That is to do with deflation, not inflation.
This country underwent deflationary situation for as long as 25 years.
And in terms of how people in the street are feeling the effect of this, we've seen a lot of reports about things like the price of rice at the moment, which has become a big news story.
But how are people being affected by this on a day -to -day basis?
It's a big concern.
The rise of price of rice has been just an added assault to already rancid situations, despite the fact that not many people have been dependent so much on rice these days.
All kinds of daily materials, those you use for cooking and mostly something that you eat.
Now, we've talked about rice prices before on World Business Report.
It's not the only issue at play here, but it is a significant one and possibly the issue that's most visible in everyday life in Japan.
And what if rice is a key part of your business?
A couple of months ago, I spoke to Kyoko Nagara, who runs a company called Sake Lovers Inc., promoting and exporting Japan's iconic rice wine and also offering tours of sake breweries.
It's actually affecting the sake breweries a lot since, you know, the ingredients costs would be rising.
so of course they have to put that on the cost and the price of the sake will increase and as an exporter that's like a negative factor to export the sake to overseas because importer would not like it and most of the breweries use the special rice that is called the sake rice and it has always been the more pricier than the table rice but a lot of farmers have notified the sake give a raise that they want to switch to production of the table of rice because it's getting higher in the pricing.
Therefore they have to reduce the production of the sake itself.
Yeah, that's the reality right now that we're facing.
As she mentions, one of the reasons for the shortage of rice is production.
And this opens up another of the big issues.
There is a shortage of young workers because of a low birth rate in the country, causing an aging population.
Hiroshi Yoshida is a professor at Tohoku University's Research Centre for Aged Economy and Society, and he told me how this has affected industry.
Most serious industry is long -term nursing care, so that service is not available to import and export, so the number of caregivers is facing a very serious labour shortage.
And obviously there's no supply of young people coming into the industry.
Yes. No supply of young people in that industry.
It's an agricultural sector.
Most producers are so aged.
Obviously, people are going to ask the simple question, why is there such a declining fertility rate?
Yes. In Japan, many women will make children after marriage.
So marriage and making children is a very close relationship.
So government made the inquiry for young ladies, what is the advantage of getting married?
The most major answer is to have a family and children.
And other important increasing answer is the economic stability by getting married.
So that means that we need the policy or the work -life balance.
So that is the very crucial issues in Japan.
Given how important this is, how much is the government doing to try to reverse this?
The government, they give them their subsidy to receiving higher education.
But such monetary policy will not solve the low fertility immediately.
I think that we have to give them a time to take care of children.
So we should expand maternity leave for both women and men.
Obviously, you're looking very closely at the figures involved here and how it manifests itself in the Japanese economy.
What do you think the position is likely to be like based on what we're seeing at the moment in, say, 10 years time?
The situation becomes more seriously.
So a part of Japan's area, another part of Japan, the ageing ratio exceeds expected to reach 50 percent.
In such kind of society, it is so difficult to maintain the social systems and economy.
So within 10 years, we have to very strong impacting policy to cope with the low fertility.
But just serving the low fertility is not the final solution because it takes 20 to 30 years to the children to become workers.
So, very important Japanese feature is we have both facing low fertility and expanding longevity.
So, the elders retiring at 65 years old should keep their jobs as long as 17 years and more.
That will help much to solve the labour shortage in Japan.
Is it inevitable that Japan is going to have to look to abroad to bring in more workers?
I think it needs to invite more workers.
So the East Asian country is facing more serious low fertility.
I think that they will not come in the future because they have to take care of their elders in their country.
In terms of Japanese industry, Japan, possibly more so than any country across the world, seen tremendous economic growth in the last 70 years.
Is that under real threat because of the population imbalance?
Yes. With more low economic growth, there are two reasons.
One is the number of workers decreases rapidly within 10 years.
And to take care of our elders, that a younger person should pay more and more taxes and contributions for social security.
So the younger people will go abroad to escape heavy taxing Japan.
So that will accelerate the more worse case in Japan.
So Japan needs more workers.
The solution could be to bring people in from abroad, but that, as it is in a lot of countries at the moment, is a difficult topic politically.
Here's Tomohiko Taniguchi again, special advisor to the Fujitsu Future Studies Centre.
Folks in Japan have been wondering if this is a trend that they should accept or something else must be done to, let's say, make the trend more acceptable.
Is this trend of immigration not just from China, but in generally?
Is this meeting with a lot of opposition amongst Japanese people?
It's a new phenomenon that new political party emerged on a platform that more stable arrangement done to put the inflow of people from abroad, not just Chinese, but people from abroad under manageable control.
You mentioned some other parties gaining ground.
In fact, Shigeru Ishiba is quite, I understand, quite low in the polls at the moment.
What could the impact of some of these parties that are on the rise have?
have? Well, the ruling party, Liberal Democratic Party, has lost, it seems, quite a lot of traditional support base, namely a conservative base.
People who otherwise have voted for the ruling party seem to be choosing another yet unknown party.
And that was pretty much obvious when another election this time for the regional assembly tokyo a regional assembly there was a new party that gained a lot of votes so the ruling coalition is being divided into two the conservative wing which is leaving the party and more progressive socially progressive element of the ruling party i can't find any support base because it's those people who might support support the progressive element of the LDP may find the socialists and other traditional liberal party as their options.
Japan is a country where the Liberal Democratic Party has a long history in power.
The idea that they might lose a majority or they might face a challenge from these other parties, is the uncertainty of that going to be detrimental to business in the country?
Detrimental to business in the country, detrimental to Japanese national security, Benefits to those countries that are willing to exploit the weakness of the country, which is Russia, North Korea, China.
If I can ask as well, what the next government of Japan, what direction they could take to try and solve some of these problems?
Likelihood is the next government is going to be an extended coalition government, including some other parties.
in addition to the two parties that have formed the coalition.
So the decision -making process is going to be very much cumbersome, complex, and everything is going to be done in a key, poor fashion, less transparency, less determination, and less clear -cut direction.
So welcome to a new world where all those difficult issues could find no solution.
So potentially, if the Liberal Democratic Party perform poorly in the election, that could spell the end for Shigeru Ishiba?
Well, Ishiba may stick to where it is, but he is going to be very much powerless.
And chances are rank and file members from the same party may make a case that Ishiba should go.
And so there is going to be a severe intraparty confrontation, which is going to take place.
And what is likely, therefore, is that sometime going forward, the incumbent prime minister will call upon a snap election by dissolving.
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That's odoo .com. calm the lower house if that happens it's going to make the japanese political situation even more chaotic tomohiko taniguchi a special advisor to the fujitsu future study center and a former special advisor to the late japanese prime minister shinzo abe i'm david harper and you're with world business report from the bbc world service now we are joined by randeep somal fund fund manager for M &G Investments, just to have a little look at a few other things going on around the world.
And looking at the markets, we've heard some interesting news from the EU regarding Russian sanctions today.
Hi, David. Yes, we have. So they're going to put in place their 18th set of sanctions against Russia to try and slow down the Russian war machine.
Previously, they had put a price cap on what the EU were willing to pay for Russian oil at $60.
What they've done now, given the oil price has fallen and said we will pay market minus 15 % to make sure that there's a permanent discount on what they get on Russian oil.
And also they're banning a further 20 Russian banks from the international SWIFT payment system which will stop them from transacting globally.
I was going to say there are two questions that come out of this.
One is how much of an effect it will have on the war in Ukraine.
That's perhaps for other people to pick over.
But how much of an effect will it have on people in the oil market around the world?
I mean, presumably Russia has other places to sell other than just the EU.
It has, and it's been doing that.
The other thing that we've seen in these set of sanctions is that the EU are trying to target third party refiners of oil, specifically in India, which has been enjoying cheap oil, fueling their economic boom.
boom. So we now need third countries to play ball in this and adhere to EU sanctions in order for this to work.
If they don't, I think, unfortunately, it'll go the way of sanctions number 1 to 17 and not have a huge amount of impact on the Russian economy.
I just want to very quickly hear from Susan M.
Collins, who's President of the Boston Federal Reserve and sits on the committee, crucially, that decides US interest rates.
This is her talking about whether she thinks America's central bank should cut rates in two weeks?
I think with solid overall economic conditions, underlying inflation coming down, a labour market that has been stable, but concerns about higher inflation on the horizon as well as potentially slower growth, I think it's appropriate for us, for monetary policy's approach to continue to be what I call actively patient.
I think that that we will be well served to take at least some more time to assess how the economy is evolving before determining whether a change in stance is appropriate.
It's important to say members of the committee can't talk to the media until we get the decision on the 30th of July.
But Randeep, a lot of people are picking up on that phrase, actively patient.
It's an interesting use of words, isn't it?
It is. I mean, the U .S. economy still remains quite strong.
And this is why you've seen some trepidation from the federal reserve chair to lower interest rates we've had the results from american express today which is a good barometer for how the u .s consumer is doing their results are strong and it looks as if the u .s consumer too still remains quite strong inflation remains high unemployment remains low which is why the fed chair hasn't really done much much to the chagrin of the current president who wants him to cut rates very soon randeep thank you very much Randeep Somal, Fund Manager for M &G Investments.
Now, earlier this month, on the 4th of July to be precise, the US Congress passed the One Big Beautiful Bill Act, a far -reaching legislative package championed by President Trump.
The bill has made headlines for extending tax cuts and increasing defence spending, as well as bringing in some cuts to domestic and social spending, things like health care.
It isn't directly focused on Africa, but the bill does introduce several provisions with significant indirect implications for African economies.
And joining us live live now is Adjoa Adjei -Chum, who's the CEO of EBII Group Corporation, which is a global strategic company based in Washington, DC.
Thank you very much for being with us today.
You presumably looked at this with some interest. Why should Africa be concerned with some of the things in this bill?
Well, thank you very much for having me on your show this afternoon.
Yeah, Africa should be concerned because there are several sort of far -reaching implications for the continent.
And We recently published a report, a company published a report that highlights about seven of them.
And, you know, one of them is to do with the remittances.
So the U .S. will begin imposing a 1 % federal tax on all outbound money transfers starting January 2026.
And this will impact the continent because currently, I mean, in 2023, there was 27 billion remittances, dollar remittances equivalent that went to Africa.
Now, with this 1 % tax being applied, a federal tax on the continent, sorry, on the transactions, that will mean up to 270 million that will be taken into taxes, put it that way.
So that would affect household incomes, et cetera.
There is also the African Growth and Opportunities Act, Act, which is set to have been renewed by now.
It will be expiring in September.
Now, the bill doesn't expand it.
It doesn't introduce new trade or investment channels either.
We know that President Trump had hosted some African leaders last week here in Washington, D .C., but they were very mineral sort of heavy countries.
And a lot of the focus was on the critical minerals.
So So that's, we're still waiting to see what happens on that front.
Another thing I wanted to touch on is one of the most significant setbacks lies in the repeal of clean energy incentives, which originally was introduced under the Inflation Reduction Act.
And currently, several of the U .S. tax credits and programs that indirectly supported Africa's renewable sector have been eliminated, and some have also been cut short.
And I'll give you some of the examples, which is the EV charger credit.
There's also the solar tax credit and the residential clean energy incentives.
They will all end between end of 2025 and 2026.
I'm sorry to interrupt you because we're a little bit short on time, but I have to ask, is there anything really that African nations can do to try and manage this situation?
Is there any sort of negotiation possible here?
Yeah, so they can keep the conversation going.
I believe that Trump definitely and his team will come on board, hopefully after the US -America First agenda is a bit more stabilized.
fertilized um but but yes we also hosting the african leaders and partners summit uh which is in september we're bringing leaders from the continent um and also some of the government leaders from the current administration to to discuss uh looking at de -risking opportunities on the continent but i encourage the african leaders to continue to engage um on this on this front because aside from the from the leader level negotiations as you mentioned particularly relation to remittances there are a lot of people in the united states with links to africa who will have an interest in keeping a good
relationship? Absolutely, absolutely.
There is a diaspora community here.
And some of the issues that have come out of this deal is also the migration.
There's been a significant investment in that aspect in terms of detention of illegal immigrants, etc. But it's also restrictions of the five -year visa.
So initially, people could apply for visas up to five years.
They get up to five years with multiple entry.
Now that has been reduced to just one single entry for a three -month period for over 31 african countries currently yeah but yeah very good so i'm sorry to interrupt we are we are a little bit short on time but it is really interesting to look at some of the the wider implications of that bill uh adjoe adjoe choom uh from ebi group corporation uh thank you very much for being with us uh now there is something else that we would uh like to take a look at here on world business report because it's not often Often that the indie rock band Coldplay makes it into the programme, but a concert in Boston on Wednesday
night has raised a few eyebrows in the business community, and it's all because of this moment where a couple were caught on a camera capturing shots of the crowd.
Oh, look at these two.
All right, come on.
You OK? Uh -oh, what?
Either they're having an affair or they're just very shy.
I'm not quite sure what to do.
Now, despite what singer Chris Martin said there, We don't know exactly why the pair dived out of the camera shots so quickly, but the video clip went viral online and it made headlines, including with our US partner CBS News.
This is a KissCam catastrophe.
This couple was caught on the big screen at the Coldplay concert in Boston last night, and you heard the lead singer there, Chris Martin, calling the couple out after it seemed like they did not want to be seen.
Well, the two people appear to be the CEO of a software development firm and his head of HR.
Interesting. Whatever was going on there, a rather awkward situation at the very least. And it does raise the question, who is the HR for HR in a situation like this?
Kate Palmer is the Employment Services Director and Workplace Culture Expert at the HR consultancy firm Peninsula and joins us live now.
Kate, I mean, this clip has travelled right around the world.
Millions of people have seen it now.
Now, as an HR person sitting in front of your phone watching this, what was your reaction when you first saw it?
Yeah, good afternoon.
Yeah, I did actually see the clip last night.
So, yeah, obviously, you know, the world's a small place when it comes to social media.
Things go viral very quickly these days.
And look, people were seeing it as a bit of fun.
But it does have some serious ramifications on the workplace.
And the reality is there are lots of relationships at work.
So, you know, the business they work for this morning, I'm sure we're sent into urgent overdrive in terms of mitigating any risk and locking down any gossip.
But businesses should have controls, parameters, policies on how to handle relationships at work and the ramifications of where these can potentially go wrong.
What sort of policies do people put in place?
Because, I mean, you can't.
I was looking at some of the statistics.
A very large percentage of people meet their future life partner through work in some way or another.
other. So you can't really ban it completely.
How do you make sure it doesn't affect the culture in a bad way?
Yeah, absolutely. You couldn't ban it and nor should you because there can be some really healthy relationships that come into fruition in the workplace.
But the relationships at work policies within most organisations have information on where there is line management involved, for example, be it a boss with a more junior member of staff and potential redeployment.
So there can be clauses around that.
There can be clauses around where relationships do materialise, around making sure that there is no, should we say, exploitation of increasing pay rises, power dynamics.
So a lot of it is around making your business aware of the relationship.
The business will look at the context of that and then will make provisions around it, often involving redeployment.
Kate thank you so much it's such an interesting point to pick over Kate Palmer the Employment Services Director and workplace culture expert at the HR consultancy firm Peninsular joining us live on World Business Report thank you very much for being with us a reminder of course there's more available 24 hours a day online bbc .com slash news with a broad overview of some of the stories we've been talking about but thank you very much for being with us
