Tepco to cut household electricity bills in July
Tokyo Electric Power Company Holdings is expected to lower its electricity rate for a standard household by ¥616 from the previous month to ¥8,236 in July, people familiar with the matter said Wednesday.
The reduction is largely as a result of subsidies that the Japanese government plans to provide for three months starting next month to lower electricity and city gas bills in an effort to mitigate the impact of higher prices on households.
Nine other major power suppliers and four major city gas providers in Japan are also likely to considerably reduce their rates.
The government will pay subsidies of ¥2 per kilowatt-hour of electricity in July and September, and ¥2.4 in August, when power consumption usually grows because of more people using air conditioners.
For city gas, the government will spend ¥8 per cubic meter in July and September and ¥10 in August.
Tepco assumes that a standard household consumes 260 kilowatt-hours of electricity a month.
The company expects the subsidies to lower the bill for a standard household by ¥520 in July. Its July rates will also reflect lower costs for coal and liquefied natural gas that are used for power generation.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
an hour ago
- Japan Times
Japan scraps ‘two-plus-two' meeting with U.S. over defense spending demand, report says
Japan has canceled a high-level meeting with the U.S. set for July following a demand that Tokyo spend even more on defense, according to a media report. Tokyo abruptly scrapped annual 'two-plus-two' security talks involving the allies' top diplomats and defense chiefs less than two weeks before the meeting after the U.S. asked Japan to hike its defense budget to 3.5% of gross domestic product, the Financial Times reported Friday, citing unidentified sources. Defense Minister Gen Nakatani and Foreign Minister Takeshi Iwaya had been scheduled to meet U.S. Secretary of State Marco Rubio and Defense Secretary Pete Hegseth in Washington on July 1 for the talks. Asked about the report at a news conference Friday, U.S. State Department spokesperson Tammy Bruce said the U.S. had 'no comment on that at this point.' The Pentagon did not immediately respond to requests for comment. The report said that the U.S. had initially asked Japan to spend 3% of GDP on defense, though Pentagon officials told The Japan Times earlier that it had set a 'global standard' for Tokyo and other U.S. allies to spend 5% of GDP on defense, in the first official confirmation that Washington is asking Tokyo to pump up its defense budget even further. The reason for the discrepancy was not immediately clear, though the Pentagon has been gripped by upheaval, including high-level dismissals and scandals in recent months under Hegseth. The Financial Times said the new, higher demand was made in recent weeks by Elbridge Colby, the Defense Department's No. 3 official, sparking anger in Tokyo. Colby said during his confirmation hearing in March that Japan 'should be spending at least 3% of GDP on defense as soon as possible,' citing the growing military threat from China and North Korea. Ostensibly pacifist Japan has in recent years undertaken a dramatic transformation of its security policy, including a five-year plan to ramp up defense spending to 2% of GDP by 2027. But pouring even more cash into defense coffers would come with significant political costs as the government focuses on domestic economic priorities and amid growing uncertainty over how to secure funds. Japan is currently getting far less bang for its buck as inflation and the yen's diminishing value erode its plans for the country's largest military buildup since World War II. The Financial Times report, citing a senior Japanese official, said the decision to cancel the meeting was also related to the July 20 Upper House election in which the ruling Liberal Democratic Party is expected to lose seats. In a statement given to The Japan Times on Friday, Chief Pentagon Spokesman Sean Parnell pointed to a majority of NATO nations that have signed on to U.S. requests to boost defense spending to the 5% level, saying that 'European allies are now setting the global standard for our alliances, especially in Asia, which is 5% of GDP spending on defense.' Asked whether Parnell's remarks apply specifically to Japan, a U.S. defense official said it 'is inclusive for all of our allies across the Asia-Pacific region, including Japan.' Nakatani said in April that defense spending was within striking distance of the 2% target, at 1.8% of GDP. A Defense Ministry panel of experts, meanwhile, is reportedly set to recommend that the government consider hiking defense spending beyond 2%, and Prime Minister Shigeru Ishiba has said that future budgets "may top 2%, if needed,' depending on the security environment. Ishiba and senior Japanese officials, however, have said that Japan will not be told how much to spend, reiterating that what is most important is the substance of strengthened defense capabilities — not arbitrary figures. The issue of defense spending among U.S. allies and partners will be at the top of the agenda at next week's NATO leaders' summit in The Hague, which Ishiba is also set to attend. Tensions over security issues and trade have grown since Trump took office, with the U.S. president railing against his county's alliance with Japan, calling the partnership — which turns 65 this year — unfair and 'one-sided,' while threatening Tokyo and other allies and partners with onerous tariffs on key sectors such as automobiles and steel.
NHK
7 hours ago
- NHK
Middle East tensions force Japan into tariff-talk rethink
Tensions in the Middle East are forcing Japan to rethink its strategy in tariff talks with the United States. Government sources point to concerns about the Trump administration being too busy with the conflict between Israel and Iran. Officials in Tokyo are looking at when the next round of tariff negotiations should be. They are also assessing the recent summit between Prime Minister Ishiba Shigeru and US President Donald Trump in Canada. Japan's chief tariff negotiator Akazawa Ryosei admitted to feeling a great deal of uncertainty about future negotiations. The two sides still need to narrow their differences on tariffs for automobiles and other items. Ishiba is scheduled to visit the Netherlands next week for a summit with NATO. Sources say he is not planning to meet Trump on the sidelines.
Japan Times
13 hours ago
- Japan Times
Japan surprises with plan for bigger cut to superlong bond issuance
Japan is planning to cut the issuance of superlong bonds this year by more than earlier reported as it tries to restore calm to a market spooked by recent record highs in yields. The Finance Ministry proposed reducing the issuance of 20-, 30- and 40-year bonds by a total of ¥3.2 trillion ($22 billion) through the end of March 2026, according to a plan presented by the ministry during a meeting with primary dealers on Friday. The latest plan from the ministry showed a reduction to 20-year bond issuance that is twice the size suggested in draft documents, underscoring the level of concern among policymakers over rising borrowing costs. A poorly received auction of 20-year bonds by Japan last month rippled through global markets that are on edge over the risks posed by rising government debt levels. To compensate for the cuts in superlongs, the ministry is considering boosting the issuance of shorter-term debt, particularly six-month U.S. Treasury bills, the plan showed. The extra reduction for the 20-year bond issuance is "positive for the bond market,' said Mari Iwashita, executive rates strategist at Nomura Securities. "Still, whether the decline in liquidity and high volatility in superlong bonds will improve will depend on if there is solid demand in the upcoming 20- and 30-year bond auctions.' The yen curve flattened, led by a drop in long-end rates after the release of the updated plan. The planned revision to the ministry's bond issuance plan this year is the second move by policymakers this week to respond to an imbalance between supply and demand that has emerged in Japan's bond market. Earlier this week, the Bank of Japan said it would slow down its withdrawal from the market from next year in a move aimed at ensuring stability. The BOJ still has a massive footprint in Japan's bond market, with ownership of around half the nation's outstanding central government debt and would still be buying around ¥2.1 trillion of bonds per month in early 2027 under its new plan. Still, the void created by the smaller BOJ purchases is ruffling bond market dynamics as it hasn't been filled by renewed buying from private-sector banks and life insurers. That gap has fueled much of the choppy downward pressure on bond prices and pushed up yields. The problems are particularly acute in the superlong end of the market due partly to separate changes to regulations that have limited the appeal of those bonds for banks while reducing the need for life insurers to buy them. Growing concerns over Japan's fiscal trajectory and expanding deficits globally including in the U.S. are also feeding into reluctance to pick up debt of 20 years or more. "The ministry publicized its revised plan sooner than anticipated to ward off the risk of a failed 20-year bond auction on June 24 and to avert the market volatility seen in May,' said Shoki Omori, chief strategist at Mizuho Securities. "In light of these announcements, superlong-term auctions are poised to regain a measure of stability.' Under the latest plan, total issuance of 20-year bonds will decrease by ¥1.8 trillion to ¥10.2 trillion over the fiscal year. Meanwhile, the supply of 30- and 40-year bonds is expected to be reduced by ¥900 billion and ¥500 billion, respectively. The ministry is also planning to cut offerings in liquidity-enhancing auctions for 15.5- to 39-year maturities by ¥100 billion per auction. A Finance Ministry official briefing reporters Friday said that the plan will likely become officially approved on Monday or Tuesday. He added that the last time the bond issuance plan was changed during the fiscal year for a reason unrelated to budgets was in 2009. On buybacks, the official said that some market participants had asked for purchases of superlong bonds while others said buybacks would hurt the autonomy of the market. The ministry isn't working on implementing buybacks for now, and it's not something that can be implemented soon. Even if the planned adjustments go ahead, the Finance Ministry will still face the challenge of finding alternative investors to absorb the slack as the central bank continues its tapering. Japan remains heavily reliant on bond issuance to finance spending. Japan's projected debt-to-gross domestic product ratio of 232.7% this year is still the highest among developed economies, feeding into concerns about the nation's fiscal stability. About a quarter of the initial budget for fiscal 2025 was allocated to debt-servicing costs alone, underscoring the country's vulnerability to rising yields. The concerns have been fanned by policy measures floated by political parties ahead of a national election in July. Parties are preparing to unveil costly proposals aimed at securing voter support. The ruling Liberal Democratic Party is planning yet another round of cash handouts to households. The Democratic Party for the People, a key opposition force, has called for cutting the national sales tax to 5% across the board, a more expensive choice, with additional bond issuance floated as a possible funding source. Against this backdrop, investors are in need of reassurance that the balance of supply and demand in the JGB market will be restored without yields rocketing.
