December 7, 2023

A participant chants slogans while holding a bottle of alcohol during Seijinshiki (coming-of-age ceremony) in Yokohama Arena.
Living in Tokyo for more than a decade, you become inured to the “weird Japan” stories that tantalize the global media from time to time. Rent a family! The suicide forest! Generation Z has no interest in sex! We’re used to such tropes.
Every now and then, though, a report comes along that has even we battle-tested Tokyoites uttering aloud: “No way!” Such was the collective reaction to reports Tokyo wants to get young Japanese to drink more booze.
This one’s true, as bizarre as it sounds. You’d think any government would count its lucky stars if twentysomethings weren’t getting smashed too often. Fewer barroom brawls. Less drunk or cycling. Quieter neighborhoods. Drops in domestic violence. Less alcoholism and improved health outlines. Pick your improved-quality-of-life metric.
Yet young Japanese aren’t hitting the pubs and bottle shops the way their fathers’ generation did. Covid-19 hasn’t helped, driving an even sharper demographic divide. Having enjoyed not drinking with the boss after work these last two-plus years, few young workers want a return to obligatory pre-Covid office culture norms.
Japan’s new “Sake Viva!” campaign shows the government wants to get young Japanese to get back in the, well, spirit. The national tax authority wants “to appeal to the younger generation…and to revitalize the industry.”
It plans to invite Japanese in their 20s and 30s to enter a brainstorming contest. The objective: devise strategies to “stimulate demand among young people” for alcohol. They can take the form of news and promotional campaigns, innovative products and even ideas that employ artificial intelligence and the metaverse.
So, Japan is serious. But let’s be honest about the real driver here: weak public finances. The reason Japan is still a puffer’s paradise, years after the developed world turned on cigarettes, is a public addiction to tax revenues. Japan Tobacco Inc. makes Tokyo way too much money.
Crowds of smokers gather in narrow alleys during lunch break in Nihombashi.
Ditto for Big Booze, which explains why this bizarre story is the National Tax Agency’s baby. In 2021, duties on liquor added more than $8 billion. Granted, this amount is hardly make or break for a $5 trillion economy. But it sure does help defray my $75,000 tab a bit.
The reference here is to a grim fiscal milestone. Data released this week showed that Japan’s government debt per capita has for the first time surpassed 10 million yen, or about $75,000. Adding to the financial drama, Japan just posted a record drop in population at the same time its debt has historians revising details about Asia’s No. 2 economy.
In 2021, this nation of 125.5 million residents bled some 644,000 people—the biggest declines since such statistics began to be tabulated in 1950. It’s a sobering reminder of how little, if any, progress Japan made over the last decade narrowing the divergence between debt and workers.
In the 12 months until July 1, total outstanding bonds and borrowing hit a record 1,255.19 trillion yen, or around $9.3 trillion. That means a roughly 14 trillion yen drop from the previous quarter alone. In just three months, Tokyo added the rough equivalent of Ecuador’s annual gross domestic product or two Uzbekistans.
Now, the kind way to characterize this borrowing binge is that Covid-19 has been hard on Japan’s economy. It’s a reminder, too, that Prime Minister Fumio Kishida’s party is finally getting the 2% inflation it’s wanted for a decade now, it’s not happy about it.
Yet Japan’s debt was surging in the seven to eight years before most folks in Asia had heard of Wuhan. From 2012 to 2019, the Liberal Democratic Party’s leader, the late Shinzo Abe, pledged to hasten GDP as a means of paying down the developed world’s worst debt load.
It was easier just to issue more public debt and prod the Bank of Japan to increase asset purchases. A steadily worsening debt-to-GDP ratio left Japan with quite a preexisting condition once the pandemic hit. Surely, Covid-19 didn’t help, but Tokyo had been on an indefinite debt bender for many years.
So, here we are with Tokyo looking to drum up tax revenues any way it can. If that means encouraging young folks to order extra rounds at the pub, then so be it. This, at least, seems to be the mindset of authorities desperate to keep Moody’s Investors Service, S&P Global and Fitch Ratings from noticing all that red ink. And how to cover the $75,000 worth of debt each of us here represent—nearly double the per capita amount in 2003.
The irony, of course, is that Japanese tax revenues reached a record last fiscal year amid buoyant corporate earnings. Thanks to ultralow interest rates, and the BOJ’s aggressive buying, Tokyo’s debt-financing burden has appeared less severe.
Now that the Federal Reserve is tightening, inflation is rising and corporate profits are drying up, Japan’s government is resorting to some truly weird tactics to pay its bills. What else can one say about a government pushing youngsters to hit the bottle? Another round, anyone?


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