Group 1 - The ruling coalition needs to secure at least 50 seats in the upcoming Senate election to maintain a majority, which requires exceeding 124 seats out of 248 total [1][6] - The election will involve competition for 125 seats, including 124 regular seats and 1 supplementary seat due to a vacancy in Tokyo, with over 520 candidates expected to participate [1][3] - The results of this election are seen as a test of Prime Minister Kishida's governance, especially after the ruling coalition lost its majority in the previous House of Representatives election [1][6] Group 2 - Foreign labor management has emerged as a key issue in the election, with the number of foreign residents in Japan reaching approximately 3.769 million, a 10.5% increase year-on-year [3][4] - The tourism sector has become a significant contributor to Japan's economic growth, with a target to surpass the record of 31.88 million foreign visitors set in 2019 by 2025 [3][4] - The ruling coalition has announced the establishment of a new interdepartmental agency to address issues related to illegal residency and crime among foreign nationals [4] Group 3 - Rising inflation in Japan has led to discussions about lowering the consumption tax to alleviate public financial pressure, with the core consumer price index (CPI) rising by 3.7% year-on-year as of May [5][6] - The price of rice, a staple food, has seen fluctuations, with average prices still above last year's levels despite a recent decline [5] - The ongoing tariff negotiations with the U.S. under the Trump administration are a contentious topic, with potential implications for the ruling coalition's governance and public perception [5][6] Group 4 - Analysts predict a high likelihood that the ruling coalition will fail to secure the necessary 50 seats, which could lead to increased internal dissent within the Liberal Democratic Party (LDP) [6][7] - If the coalition loses, it may not necessarily lead to Kishida's resignation due to a lack of strong alternatives within the party [7] - Market reactions to the election uncertainty have led traders to short the yen, with a significant increase in bullish options for USD/JPY observed [7]

Core Viewpoint - Japanese Prime Minister Shigeru Ishiba stated that utilizing surplus funds from various funds would provide sufficient resources to lower the consumption tax [1] Group 1 - The proposal to lower the consumption tax is linked to the availability of surplus funds [1] - The government is exploring financial strategies to manage tax rates effectively [1] - This initiative reflects ongoing discussions about fiscal policy in Japan [1]

Core Viewpoint - Japan's Finance Minister, Kato Katsunobu, stated that lowering the consumption tax is not appropriate and that the government is not considering new economic measures [1] Group 1 - The Japanese government is currently not planning any new economic measures [1] - The stance on consumption tax indicates a cautious approach to fiscal policy [1]

Core Viewpoint - Japan's Finance Minister, Kato Katsunobu, stated that lowering the consumption tax is not appropriate [1] Group 1 - The Japanese government is currently evaluating its fiscal policies, and the consumption tax remains a critical topic of discussion [1] - Kato emphasized the importance of maintaining stable revenue sources for the government, which could be compromised by a tax reduction [1] - The statement reflects the government's cautious approach towards fiscal management amid economic uncertainties [1]