TOKYO — Japan’s government on Tuesday approved a long-term growth strategy aimed at expanding domestic investment and strengthening economic growth through coordinated public and private sector spending, with a focus on strategic industries and technology development.
The strategy, adopted by the Cabinet under Prime Minister Sanae Takaichi’s administration, sets out a framework for promoting investment in priority sectors and includes a target for more than 370 trillion yen ($2.28 trillion) in cumulative public and private investment through fiscal 2040, according to government documents.
The government’s Japan Growth Strategy identifies 17 strategic fields where it plans to encourage investment, including advanced technologies, healthcare-related industries, and infrastructure. Officials said the strategy is intended to strengthen Japan’s industrial capacity and raise long-term growth potential through collaboration between the public and private sectors.
The Cabinet also approved related economic and fiscal policy guidelines that call for a shift toward more active investment policies while maintaining fiscal management objectives. The guidelines include a medium- to long-term economic framework extending to fiscal 2040 and set out measures intended to increase productivity and expand economic output.
Prime Minister Takaichi has emphasized increasing investment in Japan’s domestic economy, including encouraging greater participation by households and institutional investors in domestic financial assets. The government has also discussed the role of the Government Pension Investment Fund, one of the world’s largest pension funds, while officials have said investment decisions must continue to follow existing rules and prioritize beneficiaries’ interests.
The growth strategy comes as Japan seeks to accelerate investment after years of weak economic growth and demographic challenges. Government officials have argued that stronger investment in strategic industries can help improve productivity and support future economic expansion.
The plan also faces scrutiny over fiscal sustainability and market concerns about the impact of expanded government spending. Investors have closely monitored the government’s economic direction, including its approach to fiscal policy and coordination with the Bank of Japan on monetary issues.
The government said the newly approved strategy will guide future policy measures and budget planning, with further implementation details to be developed through upcoming government processes.
