Japanese Prime Minister Sanae Takaichi’s first major policy blueprint, Japan’s Growth Strategy, arrived on 24 June 2026. It seeks to deploy long-term investment of 370 trillion yen (US$2.3 trillion) to boost the country’s productive capacity and technological competitiveness, providing an alternative to those who advocate selling assets to reduce Japan’s debt overhang. Yet much like Abenomics, it relies on investment and industrial policy without providing a corresponding commitment to structural reforms.
The strategy rests upon large-scale public and private investment across 17 strategic sectors, including semiconductors, AI, quantum technologies, biotechnology and defence-related industries. The Takaichi administration has also taken measures to raise wages and provide subsidies for households, support regional revitalisation and infrastructure renewal, and strengthen economic security through supply chain resilience and technological self-sufficiency. The government argues that these investments will raise productivity, expand Japan’s growth potential and place public finances on a more sustainable trajectory.
Japan’s economic challenges stem from rigid labour practices, barriers to labour mobility, regulatory obstacles and weak support for entrepreneurship. These challenges, which Abenomics was intended to address, are hardly new and continue to hold back productivity growth.
