From the Tideline｜Vol.6

Aug 19, 2026

From the Tideline Newsletter

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
This newsletter is a weekly report from Takahiro Mitsui, delivered every Wednesday (JST) from his ongoing research of Japan. It brings you a perspective and a point of view you will not find elsewhere, as soon as they take shape.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Vol.6
Aug 19, 2026
■□■□■□■□■□■□■□■□■□■□■□■□■□■□■□■□
1｜LIVING QUESTIONS
2｜JAPANESE THOUGHT
■□■□■□■□■□■□■□■□■□■□■□■□■□■□■□■□

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

1｜ LIVING QUESTIONS

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
To keep asking in a world with no answers. Takahiro Mitsui has made asking his way of life, crossing at speed between the turbulence of the outer world and the sharpening reflection of the inner. Each week begins here, with what he is seeing now and how he sees it.
…………………………………………………………………………………………………

Last week President Putin of Russia set foot in the Northern Territories for the first time in an official capacity. The Takaichi government, the Western media, and the Japanese press under their influence have raised an outsized clamor over it. I read the visit as an entirely rational piece of strategy and as the extension of an important current that almost everyone has missed. The Russian side read that current and chose this moment deliberately.

So what is that current? It is a sequence of events through which the fact that Japan has no sovereignty has at last become visible to the world. The decisive exposure came with the coordinated Japan-US currency intervention at the end of July.

The dollar touched 163.99 yen on July 23 and reached a level not seen since November 1986, roughly forty years. Japan had already carried out yen-buying intervention alone from late April into May on a scale of 11.7 trillion yen, and still the slide did not stop. On July 31, US Eastern time, the monetary authorities of the two countries moved together into yen-buying intervention. The two countries had not intervened together for fifteen years, not since the Great East Japan Earthquake of 2011. Intervention to buy yen had not happened for twenty-eight years, not since 1998.

At first glance this may look like two authorities cooperating. The fact lies elsewhere. Japan of course has its own need to deal with a situation in which the medicine of a weak yen no longer works. Standing beside that need is a strange fact.

Japan is the largest foreign holder of US Treasuries, and the amount exceeds 1.1 trillion dollars. Yet Japan cannot sell those Treasuries on its own judgment. On August 1 the Ministry of Finance itself explained that a mechanism exists for raising dollar funds from the US authorities against Treasuries as collateral. The explanation is that intervention can continue without selling. It also means that the option of selling is not in Japanese hands. I take this as the moment the world finally saw the structure in which Japan holds no fiscal sovereignty.

This should not be read as a mere movement in financial markets. I take it as the sign that the distorted structure of postwar Japan-US relations has finally begun to move toward its end.

The evidence is Scott Bessent. The US Treasury Secretary has come to Japan three times in the past year. At the Davos conference in January this year he was reported to have shouted down Finance Minister Katayama at a moment when a sharp fall in Japanese government bonds threatened to spill into the US Treasury market. The finance minister of the United States treats the finance minister of Japan as something close to a slave. That this is done without hesitation on the international stage of Davos is a symbol of how far both governments have been driven by panic.

On his visit in May this year he met Prime Minister Takaichi, Finance Minister Katayama, and other principal cabinet members in succession. He demanded that the weak yen be corrected through rate hikes by the Bank of Japan rather than through currency intervention. Behind that demand lay concern that Japanese sales of US Treasuries would push up American interest rates and destabilize the market. This was not a request. It was effectively an order.

That Japan holds no fiscal sovereignty is only one face of what these events have exposed. If a country holds no sovereignty over its own national finances, it is reasonable to conclude that it holds no other sovereignty either, and this is gradually being revealed as the case. I see these events as the decisive point of departure for the end of postwar Japan-US relations.

Russia did not miss the exposure.

What is worth recalling here is the condition the Soviet and Russian side has raised again and again as the price of a transfer of the islands. In the Japan-Soviet Joint Declaration of 1956 the Soviet Union agreed to hand over the Habomai Islands and Shikotan after the conclusion of a peace treaty. In 1960 the Soviet Union reacted against the revision of the Japan-US Security Treaty by the Kishi Nobusuke cabinet. It then demanded the complete withdrawal of foreign forces from Japan including the US military as a new condition for any transfer.

President Putin himself has repeatedly voiced concern about the possibility of American bases being placed on the islands after a transfer, and he has lately kept a close watch on NATO movements in East Asia. In November 2018 Prime Minister Abe was reported to have told the Russian side that no US base would be placed on Habomai or Shikotan. Abe was the grandson of that same Kishi Nobusuke. Kishi had been released from custody as a Class A war criminal and installed in the prime minister’s chair in exchange for serving as America’s dog for the CIA. There is no reason whatever to trust the assurance.

The core of the negotiation therefore lay not in the islands of the Northern Territories but in who would enter the islands once returned. Put differently, the Russian side judges that the Japanese government has no power of its own to refuse a deployment of the US military. Because Russia has given up on the idea that Japan holds sovereignty, President Putin went to Etorofu himself and issued the message “take back your sovereignty” to the Japanese people rather than to the Japanese government. The message was aimed past the governments of Japan, the United States, and Europe, and at the Japanese people. That is how I read it.

At his press conference last week Prime Minister Takaichi stated firmly that the Northern Territories are inherent Japanese territory and protested that the visit was utterly unacceptable. The US State Department has also declared its position that sovereignty over the Northern Territories rests with Japan, and a great many Western outlets have criticized the Russian action. The crucial thing is missing from the coverage.

Japan does not possess that sovereignty in the first place.

What is called Japanese sovereignty rests in American hands. Japanese sovereignty is proclaimed while the fact that Japan holds none hangs suspended in the air. This strange world is the inconvenient truth that has recently been laid bare.

I read President Putin’s visit to Etorofu as operating at the level of a warning to the Japanese people not to become a second Ukraine. Postwar Japan-US relations are abnormal even by world standards. The mutual interest is real. Japan achieved its economic recovery while depending on American military power. Seen from the American side, Japanese sales of Treasuries would send US interest rates leaping and would break the world envisioned by the Trump administration and its successors, and by a Democratic administration after them. Both governments are already chained together, and the structure is such that if one falls both fall.

As if to prove this whole current, a large anomaly appeared on the Japanese side on August 7 this month. The senior personnel list announced by the Ministry of Finance moved Budget Bureau Deputy Director-General Hitotsumatsu Jun out to the post of Director-General of Tokyo Customs. He was a leading figure inside the ministry and the substantive head of fiscal affairs. That man was suddenly demoted.

As the ripples of the appointment spread, Prime Minister Takaichi remarked that he does not listen. The reason was that the Japanese government acting on American intent had tried to draw up a fiscal plan and the Budget Bureau deputy director-general had blocked it. Prime Minister Takaichi acting on American intent removed an obstruction by transfer. What lies at the heart of this is not Japanese. It is the dynamics of factions on the American side of the government. Finance Minister Katayama opposed the demotion to the last, but once a word came down from someone the matter was decided in an instant. All of these events are born within the same relation.

Within that structure, the relation of victor and defeated still holds force. The world is not a pretty story. It is far too cruel for that. However impoverished the lives of the defeated Japanese become, the Japanese government must go on delivering large tributes to sustain the government and the finances of the victorious United States. The bill is charged back to the Japanese people through tax increases and similar measures. The mass media cannot report freely because the rights to the broadcast spectrum are held by the US military at Yokota Air Base, and criticism of the United States is never permitted. The public sees only the news convenient to the interests of the US forces stationed in Japan rather than to the United States as such, and rises and falls in mood accordingly.

The Northern Territories could have been settled within the twentieth century. In thinking about what becomes of them from here, the matter must not be seen through the relation between Japan and Russia. The Taiwan question likewise must not be seen through the relation between Taiwan and China. What has to be seen is the relation between Japan and the United States. Russia understands this, and that is why President Putin timed his descent onto Etorofu for the period immediately following the coordinated Japan-US intervention. Against a Japan and a West in extreme confusion, it was a superb piece of tactics.

For now the event can be buried under the media scrum, but the time will come when the Japanese take it up as a problem. Kishi Nobusuke and Abe Shinzo. Postwar Japanese history placed incompetent prime ministers at its apex, and from here it will meet its collapse over nearly twenty years. At that point will Japan part from the United States and hold sovereignty of its own? Will it follow the United States and destroy itself? Or will it choose a third path?

Against my own hopes, this has been a week in which the sense that Japan’s future is heading toward collapse leaves me torn.

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

2｜JAPANESE THOUGHT

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
Much of what the world says about Japan misses its essence. This section ranges across Japanese history, culture, myth, belief, folklore, and philosophy to offer one seed of its wisdom.
…………………………………………………………………………………………………