Japan-China tensions dominate as Takaichi calls situation 'severe'; BOJ rate hike looks likely
Diplomatic friction between Tokyo and Beijing remained the central story, with reports that Chinese leader Xi Jinping singled out PM Sanae Takaichi for criticism around a recent Trump-Xi summit, where Washington reportedly backed Japan. Takaichi publicly acknowledged the situation is 'very severe.' On the economy, fresh data showed Japan's real wages rose 1.9% year-on-year in April — a fourth straight monthly gain and the longest streak since late 2021 — strengthening the case for a Bank of Japan rate hike at its June 15-16 meeting, with markets expecting a 0.25-point increase. Russian foreign ministry spokeswoman Maria Zakharova, meanwhile, framed Japan's deeper NATO cooperation and defense expansion as a return to 'militarism,' reflecting Moscow's narrative pushback. Minor seismic activity (M4.7 near Noda, M4.6 off Tateyama) and tropical cyclone Jangmi-26 registered only as low-level green alerts.
Why it matters
Takaichi, a hawkish conservative, has overseen a sharper Japanese posture toward China and closer alignment with the US and NATO, deepening a rift that has spilled into tourism and economic coercion. A BOJ rate hike would mark continued normalization away from decades of ultra-loose policy, with global implications for the yen and capital flows. Russia's 'militarism' framing echoes both Moscow's and Beijing's effort to delegitimize Japan's rearmament as it sheds postwar constraints.
🔎 Ground signal
Anti-CCP and Falun Gong-linked outlets are amplifying a narrative that Beijing's anti-Japan campaign has backfired by hardening Japanese resolve; note also a local data point that tourist arrivals to Hakodate hit record highs for a second year even as Chinese visitor numbers fell sharply.