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Letter from Minato-machi July 1, 2025 (Reiwa 7) No. 168 Sakai Keiji Certified Tax Accountant Office

Today marks the beginning of July, and exactly half of 2025 has passed. Looking back, whatkind of year is this shaping up to be for you?

On June 27, it was officially announced that the rainy season (tsuyu) had ended in the Shikokuregion, along with the northern and southern parts of Kyushu, the Chugoku region, and theKinki region. Except for southern Kyushu, this was the earliest end to the rainy season onrecord for these areas. In Shikoku, it ended 20 days earlier than average and also 20 daysearlier than last year. While clear, sunny skies certainly lift our spirits more than the damp,muggy rainy season, the rain during tsuyu plays an important role in securing water and isbeneficial to crops. Also, the sound of rain can have a calming effect (though too much of itcan become depressing), and it also helps prevent skin dryness. The early end of the rainyseason is already affecting rice and vegetable farming, and prolonged high temperatures maylead to physical fatigue and health issues. As this summer looks to be a long one, we all needto be extra careful about heatstroke and managing our health.

Personally, my seasonal sense is this: after a night of booming thunderstorms in the latter partof the rainy season, the morning clears, and as I look up at the blue sky, I suddenly hearcicadas chirping—“Summer is here!” To me, cicadas = summer. Because the rainy seasonended so suddenly this year, the cicadas may not have been ready. It was a littledisappointing.

This is an example of a fixed idea about summer. In life and business, holding on to fixed ideasor clinging to something is often not a good thing. For instance, sticking too long to aonce-successful business model may make it hard to make necessary changes—or even shutdown the business—leading to financial deterioration and, in the worst case, closure. Thestrong desire to protect a company built by the previous generation can also fall into this trap.Sensing change, forecasting it, and responding accordingly are key elements of goodmanagement. Bold decisions, even if criticized at the time, often lead to success and are laterpraised. For a business owner, the timing of decisions is crucial.

However, today’s economic environment is incredibly complex and challenging for managers.Japan’s declining birthrate and aging population show no signs of improvement. Productivityincreases through IT adoption remain sluggish. On top of this, U.S. tariff policies are makingexports to the U.S. increasingly difficult. Although the U.S. has overwhelming economic powerglobally, its unpredictability—fueled by the strong influence of its top leadership—creates asense of instability. These developments will likely affect Japan’s economy and, by extension,even small and medium-sized businesses here.

So, how should business leaders sense signs of change? One answer is to obtain accurateinformation. Platforms like the Nikkei Online Edition provide the latest insights and nowinclude audio content such as videos and podcasts, offering information not available in printor on TV. Unlike social media, these sources are highly reliable. It’s important not just to skimthem but to read carefully and thoroughly.