Japan Cabinet Passes Basic Policy Targeting Over 370 Trillion Yen Investment by 2040
Japan's cabinet on July 21 approved a basic policy on economic and fiscal management, designating this fiscal year as the start of "responsible proactive fiscal policy." The plan identifies 17 fields and 62 product and technology targets, spanning AI, semiconductors, defense, shipbuilding, and resources. It aims for cumulative public-private domestic investment exceeding 370 trillion yen by fiscal 2040, shifts from single-year to multi-year budgeting, and introduces a "crisis management investment" concept linking economic security with growth investment. It also outlines support for stable supply in energy, food, pharmaceuticals, and logistics, and plans to bolster defense production capacity based on peacetime civilian use.
On July 21, Japan's cabinet approved the "Basic Policy on Economic and Fiscal Management and Reform," explicitly positioning the current fiscal year as the "first year of responsible proactive fiscal policy." The policy designates 17 fields in its growth strategy, identifying 62 major product and technology targets covering AI and semiconductors, the defense industry, shipbuilding, and resources and energy, with a plan to achieve cumulative public-private domestic investment exceeding 370 trillion yen by fiscal 2040. This total encompassed joint public and private investment, including government spending and corporate investment.
The policy proposes changing the previous "single-year budget" approach, shifting to multi-year arrangements to enhance investment predictability. For the first time in a government document, it introduces the concept of "crisis management investment," treating economic security as an element interlinked with crisis management investment and growth investment. It also calls for systematic reviews in areas such as energy, food, pharmaceuticals, and logistics. Support measures will be provided for sectors unable to ensure stable supply through economic rationality alone.
In the area of defense production, the policy plans to enhance surge production capacity on the premise of civilian use in peacetime. These arrangements have been explicitly written into the official document as the basic framework for policy implementation.