In February, Prime Minister Sanae Takaichi convened the year’s second Council on Economic and Fiscal Policy, outlining a decisive shift in Japan’s economic strategy—from fiscal restraint toward proactive, innovation-driven growth.

While discussions covered macroeconomic management, inflation, and monetary policy, the core message centered on bold investment in future industries. The Prime Minister emphasized moving beyond years of underinvestment and prioritizing both “crisis-management investment” and “growth investment” through coordinated public–private collaboration.

For startups and investors, the significance lies in concrete policy reinforcement. The government reaffirmed its commitment to strengthening the “Five-Year Startup Development Plan” and accelerating the social implementation of advanced and dual-use technologies. It also signaled its intention to achieve—and potentially exceed—a 3% procurement target for startups within public purchasing frameworks.

Additional measures discussed include evaluating and refining the angel tax system, removing bottlenecks in startup financing, attracting greater venture capital inflows, securing stable funding for basic research, and advancing university reforms. By clarifying long-term R&D commitments, the government aims to enhance predictability for private-sector investment.

Importantly, Japan also indicated a shift away from reliance on supplementary budgets, moving strategic investments into the initial national budget.

Together, these measures position Japan to reinforce its standing as a technology-driven nation, while offering global entrepreneurs and investors a more structured and sustainable growth environment.

‍