Japan Sets Investment Strategy

Jul 21, 2026 | News On Japan

Prime Minister Sanae Takaichi's government approved its first annual basic economic and fiscal policy on Tuesday, pledging "responsible and proactive fiscal policy" and envisioning about 370 trillion yen in public- and private-sector investment in strategic industries through fiscal 2040.

"The Takaichi Cabinet will break away from excessive fiscal restraint and the chronic lack of investment in the future, and will thoroughly strengthen domestic investment," Takaichi said.

The policy, known as the Basic Policy on Economic and Fiscal Management and Reform, designates the current fiscal year as the starting point for responsible and proactive fiscal policy.

The government expects investment totaling about 370 trillion yen to flow into strategic sectors including artificial intelligence and semiconductors by fiscal 2040.

It also aims to achieve a strong economy with real growth exceeding 1% and nominal growth above 3% as soon as possible.

On fiscal management, the policy removes the term "fiscal consolidation," which had appeared in previous versions, and instead places stable reductions in the ratio of outstanding government debt to gross domestic product at the center of its approach.

Source: TBS

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