Every year, Japanese vote for a single Chinese character to sum up the past 12 months. This year, that was “bear” (熊), after ursine attacks dominated the headlines.
There was a much better option: the character 高, pronounced kou or taka — as in Japanese Prime Minister Sanae Takaichi. She made history as the first woman to become the country’s top leader, but that is not all — as the character means “high,” it was used in all kinds of phrases that defined this year.
There are high prices, the biggest gripe of the electorate, or US President Donald Trump’s excessive tariffs. How about the new highs reached by the Nikkei 225, with the index hitting 50,000 for the first time. After a Bank of Japan rate hike, rates are at their highest in three decades. Tensions with China can certainly be described as elevated after Beijing’s backlash against Takaichi’s comments on Taiwan.
It is much too early to predict a character for next year, but here are five themes I am watching:
First, the prime minister has been a one-woman headline-generating machine since taking office, in everything from her stance on nuclear weapons and immigration to her handbags and sleeping habits. Forbes declared her the third-most powerful woman in the world.
Next year’s task would be to solidify that position. Her predecessor, Shigeru Ishiba, had little chance of longevity in office. Takaichi has a generational opportunity to cash in on her popularity and secure her grip on power.
That means a snap election. It is a risk, with polls showing most voters see little need. She would need a big enough issue, as well as a window in a busy calendar. More important is for inflation-hit consumers to feel a difference in their wallets — a price cut for gasoline is working, but other sops, like coupons to buy rice, have bombed. The reward of a public mandate would be a far stronger position to negotiate with other parties, and to start tackling more ambitious goals. Timing would be everything.
Second, Japanese athletes provided some of baseball’s most stunning moments this year, from Shohei Ohtani’s “greatest ever” performance in Game 4 of Major League Baseball’s National League Championship Series to Yoshinobu Yamamoto’s pitching that clinched the World Series for the Los Angeles Dodgers.
Both men would aim to be part of Samurai Japan, the squad for March’s World Baseball Classic. Defending champions Japan take the international tournament very seriously, with some estimating that the final three years ago against the US was history’s most-watched baseball game. Netflix Inc has secured exclusive local rights, hoping to boost market share.
You would get longer odds on Samurai Blue, as the soccer team is known, in this summer’s FIFA World Cup in North America. Japan was the first team to qualify, and secured a maiden win over Brazil. It overcame Spain and Germany four years ago. Samurai Blue would be expected to break a longstanding run of premature exits and make it to at least the quarter-finals.
Third, Japanese markets at the end of this year have been fascinating. The yen has become completely divorced from fundamentals, with rate hikes debunked as the cure to strengthen the currency. Bond yields have risen to levels that could finally be described as normal.
Ignore the online cries that Japan is on the brink of a debt crisis — those predictions would be as wrong next year as they have been for the past three decades.
Nevertheless, there would be changes in a world with interest. Households would start to see strain on mortgages, even if still low by international standards. Pressure would increase to beat inflation through investing, with Takaichi planning tax-free savings accounts for minors. Businesses that cannot raise prices would go under.
With the yen still weak, despite the Bank of Japan’s actions, and intervention likely only a short-term fix, could the prime minister come up with a new narrative to reverse direction — or does she even want to?
Fourth, this year was a watershed year for Japanese soft power, with an anime movie in the worldwide box office Top 10, outearning Marvel movies and Superman. Investors took notice and are increasingly focused on the booming content sector.
With no date for the next Demon Slayer offering, what would be the new soft-power hit? It is time for Mario to reclaim his crown: Nintendo’s The Super Mario Galaxy Movie is to premiere in April, looking to repeat 2023’s US$1.36 billion box office — and add further juice to sales of the Switch 2.
After the year of the Labubu, keep an eye on Chiikawa. The viral character created by illustrator Nagano has been a domestic sensation and has a movie hitting next summer. Could international fame be next? Before that, watch to see if Kokuho, the kabuki epic that became Japan’s highest-ever grossing live-action movie, can take home an Oscar.
Fifth, Thursday marks the start of the Year of the Horse in Japan. It is one demographers have been awaiting for decades — the return of the hinoe-uma, the Fire Horse.
Last time, it caused a visible dent in the birthrate due to a superstition that girls born in this year would have fiery personalities — and go on to kill their future husbands.
That was in 1966; needless to say, much has changed and a major impact on the birthrate is not expected. Nonetheless, the Fire Horse is a timely reminder for a country on the front lines of demographic change.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas. He previously led the breaking news team in North Asia, and was the Tokyo deputy bureau chief. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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