Japan: Growth strategy and longer-term fiscal projections

Research evidence excerpt

Japan: Growth strategy and longer-term fiscal projections

Japan: Growth strategy and Global Markets25 JuneResearch2026

longer-term fiscal projections

Economics - Japan

Research Analysts

Question marks over whether high growth can be Japan Economics

realized Kengo Tanahashi - NSC

kengo.tanahashi@nomura.com

+81 3 6703 1295

Establishment of "strong and prosperous Japan" investment framework, Masaki Kuwahara - NSCmainly to be handled in initial budget masaki.kuwahara@nomura.com

+81 3 6703 3876

• The first growth strategy under the Takaichi administration has now been unveiled. Kyohei Morita - NSC

The strategy is aiming for public and private investment of over ¥370trn through FY40. kyohei.morita@nomura.com

It is focusing on crisis management investment and growth investment, and has +81 3 6703 1395

particularly high targets for high-tech items such as AI and semiconductors. Some

uncertainties remain, however, such as the breakdown of public-sector and private-

sector investments.

• The government also presented its Economic and Fiscal Projections for Medium to

Long Term Analysis under the new growth strategy. In the scenario presented in

which private-sector investment picks up, nominal GDP rises to nearly ¥1,100trn in

FY40, but we think the government will need to provide convincing explanations for

how this will be achieved.

• Prime Minister Sanae Takaichi also intends to change the way the budget is drawn up.

She plans to set no caps for the "strong and prosperous Japan" investment

framework, which will include measures that span multiple years.

Growth strategy assumes public–private investment of over ¥370trn through FY40,

with particular focus on AI and semiconductors

At a meeting of the Council on Economic and Fiscal Policy and the Japan Growth Strategy