Russia’s Japan Tobacco seizure is risk for Takaichi’s spending plan

Russia’s seizure of Japan Tobacco Inc.’s local assets risks reducing the Japanese government’s pool of spending money just as Prime Minister Sanae Takaichi pushes a costly policy agenda, Bloomberg reports.

That’s because as Japan Tobacco’s biggest shareholder, the Ministry of Finance receives dividend payments — amounting to an estimated ¥103.5 billion ($655 million) in the fiscal year ended March, according to government data. While that’s only about 0.1% of the tax revenue Japan collected that year, and only a portion comes from the Russian business, the payments represented about 44% of the dividend income expected by a fund that underpins industrial and innovation projects.

Japan Tobacco has said it’s still reviewing the impact of the seizures in Russia, where the maker of Winston and Camel cigarettes is the market leader in sales volumes. It had about ¥1.5 trillion of Russia-related assets as of Sept. 30.

Japan Tobacco shares plunged again after more of its assets were seized in Russia, taking its two-day drop to more than 30% — a record slump. S&P Global Ratings said the company will still have ample financial capacity after the seizure, and rising geopolitical risks are already incorporated into its credit rating.

...Japan is one of the Western countries that have imposed numerous sanctions — more than 30,000 in total — against Russia. Consequently, trade and economic relations have become a component of the collective West’s hybrid war against Moscow.

Mais, à la guerre, comme à la guerre. In response to these sanctions, Russia has begun striking at the most sensitive spot for both Europe and Japan: their pockets, which are currently shrinking due to a lack of funds. Moreover, in nearly all of these nations, the national debt exceeds 100% of their GDP; effectively, they are on the verge of default.

Against this backdrop, Putin dealt a significant blow: Japanese State is a co-owner of Japan Tobacco and derives substantial revenue from it. It indicates that the move was well-calculated and highly effective.

À la guerre, comme à la guerre!

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