What is going on in Japan these days?

In Japan, people live summer to the fullest. Each year hundreds of festivals, concerts and celebrations are held. However, this year's summer has not been characterized by time for relaxation and rest; at least not for those who have been in the center of controversy.

The upheaval has centered on political issues, because of the recent elections in the Upper House, and economic issues. These include stagnation and a steep drop in the mighty Nikkei.

The political earthquake

Twelve days after a earthquake of 6.8 on the Richter scale devastated Niigata, the ruling Japanese party experienced one of its worst periods in modern times.

On July 28, 2007 Upper House elections were held and the Liberal Democratic Party (LDP) suffered a crushing defeat, one of the worst in its history.

There is no doubt that the defeat represents a major disappointment for Prime Minister Shinzo Abe. He is leading only the second PDL government in history to have lost the Senate; the first time in over 50 years, and a terrible blow. However, unlike what his predecessor during a similar situation, the PM has not resigned. Instead, he reaffirmed that would deliver on his promises.

This has produced an atmosphere of excitement, especially around one of the most important objectives of the government of Abe. His main platform issue was constitutional reform; a change to Article No. 9 that currently prevents the State from maintaining armed forces for military purposes.

However, the greatest challenge to reform is that, for the first time in many years, support in the Upper House has failed to reach the two-thirds required for a Constitutional amendment.

Democratic Party of Japan opposition leader (PDJ), Ichirō Ozawa, has turned this issue into his main weapon in a confrontation with the government in the wake of the election victory. He even told the U.S. Ambassador to Japan, Thomas Schieffer, that he had no intention of supporting Japan’s antiterrorism legislation. This law is the basis for sending troops from the Japanese Maritime Self-Defense Forces to support the U.S. mission in Afghanistan. The expiration of this law occurs in November and need to be approved in the House, which is now led by Ozawa.

"The war in Afghanistan is a war that US President George W. Bush began without the consent of the international community," Ozawa told the ambassador.

The mission of the Japanese Maritime Self Defense Force is very important to the US, as it provides fuel to coalition ships in the Indian Ocean.

It has been a long time since Japan has had any real political confrontation. Ozawa, however, has shown that he has every intention of fulfilling his role as opposition leader, taking as much control as possible over the Upper House.

Furthermore, as a direct consequence of the defeat of the July 29, the Prime Minister performed a massive overhaul of his cabinet. Experience was rewarded in his allocation of the vacancies. One of the main objectives of these changes was improve cohesion within the LDP itself.

The Nikkei drop

Although there is no direct explanation, the Nikkei drop in mid-August may be the result of the Niigata earthquake and all the political controversy. It was the worst decline since 2000.

The market dropped despite four injections of cash by the Bank of Japan totaling 3.2 trillion yen in an attempt to stabilize markets in the aftermath of the U.S. mortgage crisis.

Stability is a characteristic of the Japanese market. Thus, the last nine months included a gradual but very efficient growth cycle. Its economy has been described as "recovering, despite weaknesses in the industrial production of some sectors."

The only positive changes have occurred in manufacturing and exports, which have been a source of economic growth during the past four years. One of its major products is steel, in the hands of Nippon and JFE, which are two of the largest steel producers in the world.

With an aging population and a decrease in the labor force the priority is to increase labor productivity among the existing workforce. At least that is what the Minister of Finance of Japan, Hiroko Ota, thinks. One reason for this viewpoint is that birthrates continue to decline.

Summertime

In spite of all the controversy and economic problems, and even natural disasters, during less than two months, the Japanese continue to honor their special summer traditions and environment.

In Japan it is traditional to put a special emphasis on the passing of the seasons. The big annual activities are scheduled to coincide with seasonal changes. So summertime is synonymous with the biggest religious festivals, called matsuri. Each of the local temples brings out their dances, costumes and gods for summer. In addition, clear skies give way to thousands of flashing Hanabi fireworks and festivals, which no Japanese person can afford to miss.

Moreover, in these months there are many rock festivals, outdoor concerts that take place in parks and all types of meetings-related organizations, movements, etc..

It is also a time for Tokyo’s most important festivals. The Asakusa Samba Carnival, which emulates, down to the smallest detail, the Rio carnival. There is even samba dancing in the streets in true Brazilian style.

The summer is also used for the realization of many of the sports competitions, such as the World Athletics Championships, which take place between August 25 and September 2 in Osaka.

Another event is the Grand Sumo Tournament, which is one of the most important in the area. It is held at the mecca of sumo, the Ryogoku Kokugikan in Tokyo. This year the huge men will battle from Sept 9 to Sept 23.

In an issue that has particular relevance involves the Mongolian Asashoryu, the only Supreme who currently holds the title of yakozuna, which is the highest slot in the sumo hierarchy. On August 1 he was severely reprimanded for missing an important event. It is speculated that he will announce his retirement soon.

Thus, summer, mostly during August and September, is one of the most festive seasons in Japan. It is the choice for many outdoor activities, such as climbing Mount Fuji to take a bath or spa under the stars. Despite all that has happened, we do not believe that this year will be any different.